Owner Could Terminate Lease to Redevelop Shopping Center

A shopping center owner wanted to demolish its center and replace it with a new one. The owner notified its tenants that it would terminate their leases to make way for the redevelopment. A shoe store tenant asked a court to issue an “injunction” to block the owner from terminating its lease, evicting the tenant, and demolishing the center.

A federal court in Louisiana refused to issue the injunction. The court said that the injunction was not appropriate, because the tenant could be adequately compensated by a money award. Calculating the money award would not be a problem, because the tenant had a substantial sales history at the center and it was easy to quantify the cost of relocating the tenant to another space, noted the court. Also, the injunction was not appropriate, because even with an injunction, the tenant would suffer financial harm. That is, the center would be mostly abandoned and would not generate much foot traffic or sales.

The evidence indicated that the owner and the city in which the center was located would suffer significant harm if the injunction were granted. The tenant was holding up a redevelopment project in which the city had invested $13 million. The city was expecting to get from the redeveloped center substantial tax revenue, more retail operations, and lots of new jobs for residents. Thus, “the economic harm to the community is a significant concern” that weighed in favor of denying the injunction, said the court.

• The Shoe Show of Rocky Mount, Inc. v. Palace Properties, LLC: No. 07-1315 Section “L”(5), 2007 U.S. Dist. LEXIS 24445 (E.D. La. 3/27/07).