Dick’s Sporting Goods has bailed on subleasing Sears’ space, and the department store chain is launching legal war The Gardens Mall and the city of Palm Beach Gardens.
Dick’s Sporting Goods has called it quits on trying to sublease space at the Sears store in The Gardens Mall.
Now Sears’ owner has launched an all-out war against the mall and the city of Palm Beach Gardens, claiming in a lawsuit they joined forces to block the Dick’s sublease, which cost Sears’ parent company “millions of dollar in rent.”
In an 85-page counterclaim filed in Palm Beach County Circuit Court on Tuesday, Transform Operating Stores, Sears’ parent company, said the mall and the city “have finally succeeded, albeit unlawfully, in their eight-year mission to prevent Sears … from implementing a sublease with Dick’s Sporting Goods.”
The lawsuit said Dick’s terminated the sublease effective Dec. 20.
The counterclaim signals a new, big-money battle between the department store and the city and The Gardens Mall, built in 1988 by the Forbes Company of Southfield Mich.
Since 2011, Sears has been trying to sublease its second floor space at The Gardens Mall, located east of Interstate 95 on PGA Boulevard.
In recent years, Sears, a troubled retailer, has tried to survive by subleasing its space at other mall locations. But Sears has said Forbes has blocked The Gardens Mall sublease because it really wants the valuable Sears property back even though Sears has a long lease on the site.
Transform claims the mall and the city repeatedly have joined forces to block the Dick’s sublease, most recently by blocking an application for changes to signs and entrances needed for Dick’s to sublease the Sears space.
Transform also singled out the city for violating Transform’s constitutional due process and retaliating against Transform for launching the 2014 lawsuit, which Transform said is a violation of its 1st Amendment rights.
Both entities deny the claims.
Palm Beach Gardens attorney R. Max Lohman said Transform is just trying to bully the city into caving to its wishes by dragging it into a nasty lawsuit, “with the spectre of damages and attorneys fees in pursuit of their specious claims.”
Lohman said the city has behaved correctly when it comes to Sears, now Transform.
All applicants have to follow the same process, Lohman said, and Transform isn’t being singled out.
Meanwhile, mall attorney Robert Carson said the mall did nothing wrong and “will end up being vindicated.”
The counterclaim names two mall entities, Forbes/Cohen Florida Properties and Gardens Venture LLC. It also names and seeks punitive damages from mall developer Sidney Forbes.
Transform claims Forbes interfered with the Dick’s sublease and has “undue influence” on the city because of the taxes generated by the mall.
Carson, the mall lawyer, said Forbes “didn’t do anything wrong and wouldn’t be liable anyway.”
The bad blood between the department store, and the city and the mall, goes back years. But it cranked up in 2014 when Sears sued Forbes for the right to sublease its second floor department store space to Dick’s, which does not have a store in north Palm Beach County.
Sears added the city of Palm Beach Gardens to the lawsuit the following year. That’s because in 2012, Forbes sought a resolution from the city of Palm Beach Gardens. The resolution said mall anchor tenants could not subdivide their space without the approval of both Forbes and the city.
In June 2017, the 4th District Court of Appeal found that the city resolution was unconstitutional because it impaired Sears’ contract rights.
As part of its decision, the 4th DCA granted Sears the right to subdivide its mall space. The court also ruled that Sears was owed attorneys’ fees because the city resolution “deprived Sears of substantive due process.”
The city ended up paying $625,000 in attorneys fees to Sears. The fees were paid by taxpayers and not covered by the city’s insurance company.
Last year, Transform, Sears parent company, tried to get the Dick’s deal moving again.
But Forbes wouldn’t sign documents needed to make exterior changes to the department store, and the city wouldn’t process the documents without Forbes’ signature.
Transform wants to move an entrance and a Sears sign, and add a sign for Dick’s Sporting Goods.
In the absence of Forbes’ cooperation, Transform urged the city to exercise its discretion and approve the application anyway.
Last month, Forbes filed a lawsuit against Transform, seeking a judge’s ruling on how to proceed. That same month, the city also filed a lawsuit, this time against both the mall and Transform, also seeking direction on the document issue.
Transform responded with the giant counterclaim against the mall and the city.
In addition to money damages, the lawsuit also seeks a judge’s declaration that the mall can’t frustrate future efforts by Transform to sublease the Sears space.