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Started By
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The story of the Metairie K-Mart building
Posted on 12/14/21 at 9:56 am
Posted on 12/14/21 at 9:56 am
Nola.com paywall, so here's the story.
Kmart closed in 2019. It is currently abandoned. Kmart's owner Transformco continues to pay monthly rent on the lease to the landlord, who is a local car dealer (Matt Bowers). Because it is abandoned, there are junk cars left on site, overgrown weeds, etc, and it's accumulated tons of code violations.
The locals are not happy and neither is the car dealer who is getting only $1M a year in rent, and he believes market rent is higher. Transforcco has 8 more 5 year options at their exclusive use.
Transformco has basically said they will do one of the following: Allow the LANDLORD to buy out the lease for $10M, or try to bring in another tenant.
The other tenant option seems reasonable, but the car dealer doesn't want to do that because he wants market rent, not to have Transformco sublease it out.
So we basically have a millionaire fighting a hedge fund, meanwhile the parish gets no sales tax revenue and the locals have an empty derelict building.
The car dealer is suing now to basically break up the lease.
Kmart closed in 2019. It is currently abandoned. Kmart's owner Transformco continues to pay monthly rent on the lease to the landlord, who is a local car dealer (Matt Bowers). Because it is abandoned, there are junk cars left on site, overgrown weeds, etc, and it's accumulated tons of code violations.
The locals are not happy and neither is the car dealer who is getting only $1M a year in rent, and he believes market rent is higher. Transforcco has 8 more 5 year options at their exclusive use.
Transformco has basically said they will do one of the following: Allow the LANDLORD to buy out the lease for $10M, or try to bring in another tenant.
The other tenant option seems reasonable, but the car dealer doesn't want to do that because he wants market rent, not to have Transformco sublease it out.
So we basically have a millionaire fighting a hedge fund, meanwhile the parish gets no sales tax revenue and the locals have an empty derelict building.
The car dealer is suing now to basically break up the lease.
12
Posted on 12/14/21 at 9:57 am to LSUFanHouston
The lease doesn’t have use and upkeep contingencies?
Posted on 12/14/21 at 9:59 am to LSUFanHouston
Why is Transformco still paying rent of 1M/ year?
Do they have any type of long term plans?
Do they have any type of long term plans?
Posted on 12/14/21 at 10:00 am to LSUFanHouston
Sounds like a job for a crackhead.
Posted on 12/14/21 at 10:00 am to ell_13
quote:
The lease doesn’t have use and upkeep contingencies?
It was a K-Mart so it probably looks the same
Posted on 12/14/21 at 10:02 am to ell_13
quote:
The lease doesn’t have use and upkeep contingencies?
I'm sure it does and I'm sure Eddie Lampert's strategy is to ignore it and force someone to sue them.
Posted on 12/14/21 at 10:04 am to East Coast Band
quote:
Why is Transformco still paying rent of 1M/ year?
Do they have any type of long term plans?
I honestly don't see how they make it another year. They are down to less than 100 stores between Sears and Kmart and continuing to bleed money.
It seems like the landlord would let them out of the lease at no cost, so it seems crazy they are still paying rent. I guess they want to control who can go into that space... but why? They are not competing in the local market.
Nothing about Eddie Lampert and Sears/Kmart has ever made any sense.
Posted on 12/14/21 at 10:05 am to LSUFanHouston
quote:
Because it is abandoned, there are junk cars left on site
Can't say I've ever noticed abandoned cars at that lot
Posted on 12/14/21 at 10:06 am to LNCHBOX
quote:
Can't say I've ever noticed abandoned cars at that lot
Gotcha. That was from article. I don't go that way often.
Posted on 12/14/21 at 10:06 am to LSUFanHouston
Metairie is an out of control wasteland, glad i live in New Orleans (tongue in cheek sarcasm before i trigger anyone).
Posted on 12/14/21 at 10:07 am to LSUFanHouston
Not disputing it, just never noticed.
Posted on 12/14/21 at 10:09 am to LNCHBOX
ToysRus on Vets is probably a similar situation.
Posted on 12/14/21 at 10:12 am to LSUFanHouston
quote:
Transforcco has 8 more 5 year options at their exclusive use
Damn
Posted on 12/14/21 at 10:12 am to STEVED00
quote:
ToysRus on Vets is probably a similar situation.
They have gates up to block people from driving in there.
Posted on 12/14/21 at 10:16 am to LSUFanHouston
Anyone else ever check out that old chick with the brown hair and the glasses that worked there? She had a really attractive figure.
Posted on 12/14/21 at 10:26 am to LSUFanHouston
quote:
the parish gets no sales tax revenue and the locals have an empty derelict building.
Can't the parish step in at some point because of this?
Posted on 12/14/21 at 10:31 am to LSUFanHouston
split into 3 sections with a Tractor Supply in the middle and a Mexican restaurant on one side and a chinese buffet on the other.
Posted on 12/14/21 at 10:31 am to LSUFanHouston
quote:
It seems like the landlord would let them out of the lease at no cost
Have you ever dealt with a filthy rich property owner?
Posted on 12/14/21 at 10:33 am to East Coast Band
quote:
Why is Transformco still paying rent of 1M/ year?
Do they have any type of long term plans?
Might be cheaper than trying to buy out the lease.
I doubt they exercise any of their options, though.
Posted on 12/14/21 at 10:34 am to medtiger
quote:
Can't the parish step in at some point because of this?
They might try an Eminent Domain play, but I doubt it. The hedgefund paying rent to Bowers is parking money and shielding for taxes. The lease must have been poorly worded. Maybe intentionally poorly worded.
Bowers must be getting heat from the community and decided to go public. He is losing a ton of money with rents skyrocketing and lucrative land.
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