Sears may have won the battle for the right to sublease its space at The Gardens Mall to Dick’s Sporting Goods, but it could still lose the war to bring the retailer to the mall.
Over a sign.
During the past few months, Sears has asked the city of Palm Beach Gardens to grant approval for a Dick’s sign on the exterior of a Sears store at the mall on PGA Boulevard east of Interstate 95.
The city says it can’t grant permission because the mall owner must approve the sign. And The Forbes/Cohen Florida Properties, owner of The Gardens Mall, hasn’t given the OK.
Without a sign, there’s no deal for Dick’s.
Sears is frustrated, especially since it just wrapped up four years of litigation against Forbes and the city, finally winning the right to subdivide its mall space and bring Dick’s to the second floor of its building.
Now it’s possible Sears might wade back into battle again.
In a July 18 letter to Palm Beach Gardens’ attorney, Sears lawyer Gerald Richman said the mall’s approval is not required for the sign, as the city has maintained.
But the city’s insistence that Forbes grant approval for any change to the building’s exterior “deprives Sears of its property rights,” Richman wrote. If a solution can’t be reached “Sears will have no choice but to again immediately sue the city for constitutional violations.”
Richman said Sears will seek to recoup its attorneys’ fees from city taxpayers. Already, Palm Beach Gardens taxpayers are on the hook for up to $2 million in attorneys’ fees for a prior lawsuit with Sears, which the city lost.
Sears’ beef isn’t just with the city, however.
In an interview, Richman said Forbes has approved every other tenant’s application for exterior signs, except the Dick’s sign. “And they won’t even talk to us,” Richman said.
Richman is expected to raise the issue at a city council meeting set for Thursday at 7 p.m.
Subdividing space at The Gardens Mall has been a seven-year effort by Illinois-based Sears, which is facing steep financial pressure on its stores.
While other malls have permitted Sears to sublease space, The Gardens Mall has blocked Sears’ bid to bring Dick’s.
In 2014, Sears sued Forbes, arguing its lease terms gave it the right to sublease its space without Forbes’ approval. Sears said Forbes blocked the Dick’s sublease because Forbes wants the valuable Sears property back.
Sears later added the city of Palm Beach Gardens to its lawsuit, based on a 2012 city resolution that forbade mall anchors from subleasing space without city approval.
Although a Palm Beach County Circuit Court judge ruled in the mall’s favor in 2016, the 4th District Court of Appeal reversed the ruling last year, finding that the resolution was unconstitutional because it impaired Sears’ contract rights.
Since the appellate court ruling, Sears and Dick’s have submitted changes to the Sears/Dick’s deal for the city’s review. Dick’s even agreed not to sell guns or ammunition at the mall store, as it does at other locations.
But nothing has happened on the proposed Dick’s store.
“All Sears and Dicks wish to do is move forward with this exciting addition to the Gardens,” Jane Borden, Sears president of real estate, wrote to members of the Palm Beach Gardens city council on Aug. 24.
Sears should not hold its breath, a city official said.
R. Max Lohman, attorney for the city of Palm Beach Gardens, said the city is bound by the rules that created the mall. Those rules require the consent of the property owner, in this case, Forbes, before any change can be made to the site. “And we’ve consistently required it since 2004 for anything at the mall,” Lohman said.
If Forbes doesn’t want to approve an exterior sign for Dick’s, the city can’t interfere in Forbes’ dealings with Sears, Lohman said.
Although an appellate court found the 2012 city resolution was done “at the behest of Forbes,” Lohman said the city is neutral.
“The city is neither on Forbes side nor the mall’s side,” Lohman said. “We are trying to do the right thing. We don’t want to be sued by anyone.”
But Lohman said the city won’t be swayed by lawsuit threats, which he called “counter-productive” in a Sept. 5 letter to Richman.