Two recent court decisions confirm that retail tenants cannot ignore continuous operation covenants as both ruled the retailers’ stores must remain open for business.
Starbucks Blocked from Closing Teavana Stores
In an epic battle between mega-shopping center owner Simon Property Group and seemingly ubiquitous retail tenant Starbucks, Simon has won a crucial battle. Last summer, Starbucks announced publicly that it was closing hundreds of its Teavana stores, most of which are located in shopping malls around the country. Simon, reportedly the largest shopping center operator in the United States, responded by filing suit against Starbucks in Indiana to block the closure of Teavana stores located in Simon malls. With the battle lines drawn, an Indiana judge ruled in favor of Simon and issued a preliminary injunction prohibiting Starbucks from closing 77 of its stores in Simon malls.
Is a commercial lease for cannabis operations void as an illegal contract under federal law?
While a cannabis operation may be properly licensed and permitted under state marijuana laws, the federal Controlled Substances Act makes it unlawful to lease property knowing it will be used for the illegal production or distribution of controlled substances. An Arizona-based cannabis business was confronted with this very issue after an attempt by its landlord to revoke the operator's lease. Find out what the court decided in the latest post on GSB's Cannabis Business Blog.
We regularly update clients about changes in real estate law and on industry trends. This includes briefing clients on legislative proposals in the federal tax, housing and other legal areas affecting their businesses. Staying current enables you to anticipate and prevent legal problems as well as capitalize on new developments.