City Square Property Holdings Inc. (CSPH) is suing tenant Canada Safeway for $2.25 million in unpaid lease payments following a dispute over how much the grocery chain has agreed to pay.
The owner of the City Square Shopping Centre, at 12th Avenue and Cambie Street, claims that the grocer agreed to an initial 20-year lease that ended August 31, 2009.
Rent was supposed to start at $7.50 for each of the 25,400 square feet that the grocer occupied. That rent would rise to $9 per square foot by the end of the 20-year term.
There was one catch. Safeway was supposed to pay a bonus payment equal to 1.25% of the amount, if any, by which its gross sales exceeded its annual rent.
When Safeway renewed its lease in 2009 for a five-year period, it agree to a modified arrangement where it would pay $9 per square foot plus a bonus payment equal to the average of percentage rent, if any, over the preceding three-year period.
Safeway has not provided CSPH with its gross sales for 2010 and 2011. Nor has it been paying its fair share of rent, CSPH alleges.
CSPH has made its own calculations showing Safeway's gross sales at $14.94 million in 2010 and $14.44 million in 2011.
CSPH wants a total of $2,249,181 in unpaid rent based on six years worth of insufficient payments.
Safeway has paid rents that range between $406,802 in 2006 and $442,920 in 2011, CSPH alleges. It also alleges that there are balances owing that are between $240,792 and $278,738 in the years between 2006 and 2009.
CSPH alleges that Safeway also owes $623,200 in back-rent in 2010 and $619,184 in back-rent in 2011.
None of the allegations has been proven in court.
