The Gap faces civil lawsuit over unpaid lease
BURLINGTON — The landlord for The Gap Inc. in Manchester has filed a civil lawsuit claiming the store owes $80,755 in back rent and fees on its 4733 Main St. location.
Kleban Battenkill LLC filed the case in U.S. District Court in Burlington this month maintaining the outlet store in Battenkill Plaza, south of the main roundabout, has been in default on its lease since April, the lawsuit notes.
The Gap, which leases about 10,024 square feet, has not filed its written response with the court to the five-page lawsuit.
A manager at the store told the Manchester Journal on Tuesday afternoon she was unable to comment. She also said she could not give the name of a company spokesman who might be able to respond.
The lawsuit gives a peek inside the financial dealings of the rent paid by a major national retailer in the Manchester shopping world. The lease calls for an annual base rent of $260,624, a percentage of sales, and a share of the common area maintenance charges and taxes, according to the lawsuit.
The lawsuit localizes the world-wide impacts the
COVID-19 pandemic is having on retailers.
According to an article by Forbes, U.S. clothing retailers saw a nearly 90 percent slide in April retail sales from the previous year, which comes off a 50 percent decline in March.
Gap's San Francisco, California, based parent company reported in April a 43 percent decline in first-quarter sales and that it had stopped paying rent for stores that had been closed and warned that it was running out of money, according to a story in the San Francisco Chronicle, which also reported that Gap said "it's negotiating with landlords on lease terms, but may consider closing some stores permanently."
The lawsuit said the default rate on the lease is determined by the Wells Fargo prime rate for commercial loans, plus 4 percent.
The Gap leased the property in March 2005 and amended it in May 2011 and March 2013, court records show. The lease is due to expire Jan. 31, 2023.
The lawsuit also notes that after five days notice the landlord may file a lawsuit and seek to repossess the property.
The Gap was given notice April 15 that it was behind $26,918, the lawsuit notes. Kleban maintains no more payments have been made.
In addition to back rent, Kleban, which is based in Fairfield, Conn., also is seeking its costs and lawyers' fees for filing the lawsuit.
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