By: James Wilcox
A single month’s rent is becoming a big deal in a deal for a retail property in Brooklyn worth an estimated $20 million.
The purchaser of the 7,100-square-foot property reportedly wants out of the deal because the April rent payment from tenant Crunch Fitness, has not yet been paid.
A lawsuit filed on Wednesday by the property’s owner, Millhouse Peck Properties, says the firm deserves to keep the down payment – in the amount of $1 million down – that had been placed in escrow. Also, legal fees.
LG Park Slope, slated to take control of the property on April 13, reportedly reneged on the deal because Millhouse failed to place Crunch Fitness in default of its lease. Millhouse is said to have bought the edifice in October of 2015 for the price of $5.25 million from the Beekman Estate. Beekman is currently owned by Lucius Palmer.
“The Crunch Fitness chain has 40 locations in New York state, and more than half of them are scattered around the city’s boroughs. They have been closed since March 16, under Gov. Andrew Cuomo’s executive order to close all movie theaters, gyms and casinos and to limit restaurants to only takeout,” Crain’s New York Business reported.
Across America, Crunch Fitness workout centers have been opening back up following pandemic shutdowns. The chain began modestly with a single workout club located in a basement studio in New York City’s Greenwich Village in 1989. “While we believe in the power of fitness to improve lives,” its web site explains, “we also know exercise is hard work and everyone can use a little more motivation. So we’ve fused fitness and entertainment so that we can make serious exercise fun.”
Millhouse “had no obligation to go after Crunch in the agreement, Millhouse’s attorneys claimed in the complaint, and LG had known since March 30 that Crunch was not going to be able to make rent the next month,” Crain’s reported. “According to the lawsuit, LG rejected a proposal by Crunch to defer its rent until 2021 and then pay it back in monthly installments; LG also rejected a suggestion by Millhouse to allow Crunch to pay half its rent in April and defer the other half until next year.”
According to the complaint, LG “is making up excuses to avoid paying the $1 million, but none of its shifting excuses hold water.”
According to the report, LG Park Slope had been handed Crunch Fitness’s estoppel letter. That letter summarized the firm’s financial position, the lawsuit said. However, according to LG Park Slope, the letter had credibility issues since it bore the names of individuals who were nowhere to be found on the lease.
