Crossgates sues seven tenants for non-payment of rent

Crossgates Mall sign

The Enterprise — Marcello Iaia

Crossgates Mall is suing seven of its tenants for not paying rent.

Crossgates Mall is suing seven of its tenants — Banana Republic, Old Navy, The Gap, Athleta, Journeys, Underground by Journeys, and Journeys Kidz — for $872,000 in combined back rent.

Crossgates is the latest mall operator suing Gap for not paying its rent. 

In four lawsuits filed this week in Albany County Supreme Court, Crossgates Mall General Company Newco, LLC claims four of its retail tenants: Banana Republic, Old Navy, The Gap, and Athleta — all owned by Gap Inc. — have barely paid rent since February. 

The dereliction of lease payments has led to a collective past due amount through August totaling over $710,000. 

In an April Securities and Exchange Commission filing, Gap wrote that, in an attempt “to both preserve and provide additional liquidity,” it would stop paying the $115 million in rent the company paid every month on its North American “stores that have been closed because of the COVID-19 pandemic.”  

In June, Gap was sued by the country’s largest mall operator, the Simon Property Group, for nearly $66 million in back rent. Gap in July filed a separate lawsuit against Simon Malls in an attempt to terminate its leases with the property giant; this month, Simon counter-sued. 

Gap is embroiled in similar lawsuits with Brookfield Property Partners. 

Crossgates Mall did not return messages seeking comment.

The Enterprise received the following response from The Gap after this story had gone to press:

“The COVID-19 pandemic has had a profound effect on the retail industry, and like many retailers, Gap Inc. was forced to close its North American stores to our customers for months due to the pandemic, and upon the reopening of our stores, we are being subject to restrictions that no one foresaw before the closures, much less when the leases were entered. While we had hoped the infection rates would plateau and drop quickly all over the country, the reality is, infections are spiking, and regulations are evolving. 

“We remain committed to working with our landlords on mutually agreeable solutions and fair rent terms, just as our industry and government partners have sat with us in good faith to shape the post COVID business landscape. We are pleased with the progress we’ve made with hundreds of our landlords as we’ve reopened stores across the country, moving forward together towards growth.”

Also this week, Crossgates filed two lawsuits against Genesco Inc., the parent company of Journeys and Journeys Kidz, for non-payment of rent. The two shoe retailers together owe a past rent due amount through August of about $115,000.

On Aug. 24, the mall also filed suit against a third Genesco-owned shop in Crossgates — Underground by Journeys — claiming the store owes over $47,000 in back rent as of this month. 

A call to Genesco Inc. was not returned.


When it rains, it pours

Earlier this month, Le Tote Inc., the parent company of the Lord & Taylor department store, an anchor tenant of Crossgates Mall, filed for bankruptcy and closing sales are to be conducted at all 38 Lord & Taylor stores.

J.C. Penney, another Crossgates anchor tenant, also recently filed for chapter 11 protection and closed down some of its stores, although its Guilderland shop was not one of them. 

Pyramid Management Group, the owner of Crossgates, is currently three months delinquent on five Crossgates-related loans totaling approximately $262 million.

Seeking redress from its retail woes, Crossgates Mall is suing the town of Guilderland in an attempt to knock $139 million off its $282 million tax assessment — a near 50-percent drop in the assessed value.

Guilderland’s first town-wide revaluation since 2005 has led to over 60 challenges in Albany County Supreme Court.

Each of the lawsuits filed this week noted that the Gap-owned retailers were in default on their lease agreements and that “in or about February 27, 2020 (one was February 28) through July 28, 2020, the Tenant stopped paying rent.”



The court filings show that Athleta LLC and Crossgates Mall signed a 10-year lease agreement on 4,130 square-feet of space in May 2014, and that the monthly rent would be $25,547.

After Athleta stopped paying rent “in or about February 27,” Crossgates in early July sent the company a notice about the past due rent.

Later in July, Athleta sent Crossgates a partial rent payment of $17,638, which “did not cure the default,” according to the court documents.  Twice this month, the complaint states, on Aug. 4 and Aug. 10, Athleta paid Crossgates rent which totaled $30,738. 

 “As of the date of this Complaint [Aug. 17], the Tenant owes the Landlord the total sum of $110,509.57 in past due rent,” the court filing states. 


Banana Republic

According to court papers, Banana Republic and Crossgates entered into an “amended and restated” lease for 8,501 square feet for which the retailer was to pay $37,552 per month. 

The court filing states Banana Republic stopped paying rent sometime in February, and, as of this month, owed $195,363 in past due rent.


Old Navy

Crossgates and Old Navy signed a lease for 15,500 square feet in July 2010, and in 2019 that lease was modified and extended from January 2020 until January 2025. As of the start of this year, the monthly rent due under the new lease was $42,055 per month, according to court papers.

After Crossgates sent Old Navy a past-due notice in July, the company sent its landlord $32,120 in rent. Then, on Aug. 4, Old Navy paid another $11,631 in rent, and currently owes Crossgates $197,644 in past-due rent.


The Gap

In May 2001 and December 2011, Crossgates and The Gap signed leases and successor agreements for 19,303 square feet space and then 12,143 square feet. 

As of January, the rent due was $49,212 per month.

The Gap made a partial rent payment of $33,976 in July, and another $12,303 in August. 

The Gap was sent a notice of default at the end of July and informed that, unless its $172,153 default was taken care of in 10 days, Crossgates “would commence legal action,” the court filing states.

The retailer has $209,062 in past due rent as of this month.


Journeys and Journeys Kidz

Journeys Kidz and Crossgates signed an original 10-year lease agreement for 1,300 square feet of space in 2007, according to court papers. The two sides subsequently entered into multiple follow-up modified letter and lease agreements, and, as of January, rent was $5,199 per month.

In 2016, Journeys and Crossgates entered into a 10-year agreement for 3,000 square feet of space with a lease payment of $17,630 per month.

Underground by Journeys signed a five-year lease for 1,496 square feet with the mall in September 2016; rent is $9,061 per month.

All three tenants stopped paying rent in March, according to court papers.

This month, Journeys Kidz made a $3,938 rent payment, Journeys sent $9,390, while Underground by Journeys $5,645 paid, according to the filings.

As of Aug. 18, Journeys Kidz owes Crossgates $33,542 in past due rent, and Journeys owes $82,360, the court papers state, and, as of Aug. 24, Underground by Journeys owes $41,672.

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