Judge Rules For Simon Against Seritage In Lawsuit Over Former Boca Raton Sears
After more than three years of legal wrangling, Simon Property Group has prevailed in its lawsuit against the owner of the former Sears store connected to the mall giant's Town Center at Boca Raton.
Simon sued Seritage Growth Properties in 2019 over the latter's plan to redevelop the shuttered department store into restaurant and entertainment uses as well as a hotel. An agreement struck in 1985 with the mall's previous owner stated that the owner would have the right to purchase the Sears store if it were ever planned to be replaced with nonretail uses.
This month, Palm Beach County Circuit Court Judge Samantha Schosberg Feuer ruled that Seritage violated that agreement, and found that Simon could force an appraisal of the site and potentially acquire it, The Real Deal reports.
Seritage, the real estate holding company that was spun out of Sears in 2015, started looking to redevelop the store at 5900 Glade Road in 2016, even before it ultimately shuttered in 2018. As it moved forward with redevelopment plans, Simon sued in 2019 claiming Seritage violated the 1985 agreement by pursuing nonretail uses and not granting the mall owner's right to purchase.
Seritage filed a countersuit, alleging Simon wasn't negotiating in good faith over the property. Both parties asked Feuer to rule on the case via summary judgement, and the judge found in favor of Simon.
In a filing following Feuer's ruling, Seritage said it plans to seek a rehearing, adding that it can market the property to other buyers and allow Simon to match a market-determined price, TRD reported.
“After being delayed by Seritage, we look forward to finally being able to create a harmonious addition that is consistent with the high quality the community expects from Town Center,” Simon President of Retail Development Mark Silvestri told TRD in a statement.
Seritage has been fighting for the right to redevelop the property for more than three years, but recently it has been looking to exit stage left. In July, the REIT's board voted to seek a buyer for all of its assets and look to wind down operations. But in October, after no deal materialized, Seritage instead started selling off its assets individually.
Last year, Seritage sold more than 70 assets for a return of nearly $740M and has already sold 18 properties for $239M in 2023, according to a March 14 Securities and Exchange Commission filing. It had a further 22 properties under contract to be sold for an expected combined return north of $366M.
