The Town Center mall in Boca Raton has filed a lawsuit against the owner of the shuttered Sears department store.
At issue: Whether the owner of the Sears property can develop the site into non-retail uses without complying with an agreement that gives the mall the right to buy the property first.
The Palm Beach County Circuit Court lawsuit, was filed on Oct. 31 by the Town Center at Boca Raton Trust against Seritage SRC Finance LLC.
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Seritage Growth Properties is a real estate investment trust spun out of the troubled Sears department store chain in 2015.
At Town Center, Sears leased its store from Seritage until the store closed in 2018.
According to the complaint, Town Center gained the right to buy the site when Seritage filed plans with the city of Boca Raton to transform the former Sears site into a complex featuring non-retail uses such as a hotel, entertainment and a fitness center.
At Sears’ stores throughout the country, the department store sometimes leased its department store space from a mall, and other times it owned the store and even the land around the department store.
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At the 39-year-old Town Center mall, Sears owned the land on which the 151,087-square-foot store sat. It also owned the 23,250-square-foot auto service center adjacent to the store, and the parking lot land east of the store, to St. Andrews Boulevard.
Simon Property Group of Indianapolis owns the rest of the Town Center mall.
According to the complaint, the mall and Sears struck a 1985 agreement that required the property to be used for retail.
If the property’s use changed to something other than retail, the agreement gave the mall the right to obtain an appraisal so the mall could buy the property.
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The agreement governed Sears and its successor, Seritage.
For the past several years, Seritage has been seeking to redevelop Sears’ stores it owns across the country.
In 2016, the Palm Beach Post disclosed Seritage wanted to redo the Sears property at Town Center and replace it with new shops, eateries and entertainment-oriented tenants.
In 2018, the same year Sears shut down its Town Center mall store, Seritage submitted formal plans to the city of Boca Raton to develop an outdoor mixed-use development on the site.
The complex would feature 239,000 square feet of retail, restaurant, fitness and entertainment, plus a 170-room hotel.
In the lawsuit, Town Center said the non-retail uses, such as the proposed hotel and fitness center, triggering the mall’s right to demand an appraisal and if it wished, buy the Seritage site.
But the lawsuit alleges Seritage not only has failed to name an appraiser, it also has tried to terminate the mall agreement that governs use of the property.
A Seritage spokeswoman could not be reached immediately for comment.
At malls where Sears leases space but does not own land, Sears has been trying to sublease its space to other retailers.
Sears tried to sublease its space at The Gardens Mall in Palm Beach Gardens to Dick’s Sporting Goods. But the effort was thwarted by mall owner The Forbes Co., resulting in years of litigation.
In 2017, Sears prevailed in the lawsuit but, so far, the space has not been subleased to any other retailer.
It’s not clear whether the Dick’s deal still is going forward or what, if anything, Sears plans to do with The Gardens store. Officials with Sears and Dick’s Sporting Goods have not responded to inquiries seeking comment.