Matt Bowers, Owner of Abandoned Kmart on Veterans Blvd, in Legal Dispute with Hedge Fund Tenant | Economic news
The old abandoned Kmart house on Veterans Memorial Boulevard is at the center of a bitter legal fight between local businessman Matt Bowers and a company controlled by one of the largest retail investors in the United States
The building, which covers more than 100,000 square feet and sits on nearly seven acres of land at 2940 Veterans near Causeway Boulevard, has been vacant since the spring of 2019. It was then that billionaire hedge fund manager Eddie Lampert, which bought the Kmart and Sears chains in the early 2000s, bankrupted both groups of stores and closed most of their stores.
Since then, the site has racked up dozens of Jefferson Parish code violations including invasive weeds and foliage, unwanted cars left on the grounds, drainage issues, and litter and debris that s’ accumulate.
It has also been the subject of regular discussion on neighborhood social media sites, with residents concerned that the building could deteriorate and attract unlicensed food vendors, people sleeping in their cars and others falling into disuse. bringing together for illegal transactions.
Bowers, a regional auto dealer who owns the property, said he first worked with Lampert’s firm, Transformco Properties, which is headquartered in Chicago and still controls the lease, to try and keep the site running smoothly. state.
But since then, he has come to believe that they were not acting in good faith. He tried in September to take legal action to get the business evicted, but said a change of legal entity on the lease had delayed proceedings.
Now he has filed an eviction application in Jefferson Parish 24th District Court to try to force the company to give up the lease so he can find a new tenant, alleging that Transformco let the property fall. deteriorate and prevented it from finding a suitable new tenant to occupy the site.
“I understand that the deterioration of the property is really hurting people in the neighborhood and I think some people have ended up blaming it on me,” Bowers said. “But it really is I who am extorted by a hedge fund for millions of dollars.”
Although most Kmart and Sears stores have been closed, Transformco still controls decades-long leases on many properties that can be valuable if the owner wishes to buy them out.
The lease on veterans boulevard. The property was originally signed by Kmart in 1991 and gives the Lampert company the right to continue renewing every five years for an additional four decades, Bowers said.
Bowers continued to receive around $ 1.1 million in rent per year, even though the property remained inactive and fell into disuse. But he would earn more if the site generated sales and said the market rate for the property should be about 50% higher than what Lampert’s company is paying. Bowers said they offered to waive the lease if it paid them $ 10 million.
Kirk Williams, Transformco’s regional real estate manager, who runs the site, did not respond to requests for comment. Neither do local Transformco brokers at SRSA Commercial Real Estate.
Bowers acknowledged that Transformco executives offered him an offer to join At Home, the discount housewares retailer, as a new retail tenant.
“They said, ‘how would you like us to bring At Home as a tenant for the next 15 years paying the same rent,’ and I said, ‘Why (thank you) would I want to do this? Bowers said, alleging the offer was just a ploy to get him to buy out the lease so he wouldn’t be struggling with a relatively low-paying tenant for years.
Despite the deterioration of the building, the site is considered a prime commercial building given its proximity to the bustling Lakeside shopping center, the heavy traffic around the intersection of Causeway and Veterans, and the development in recent years of the “Tolmas nearby flyer that included retailers like Trader Joe’s.
Jefferson Parish valued the property at just over $ 25 million.
Jennifer Van Vrancken, a member of the Jefferson Parish Council who represents the area, agreed the abandoned site is a drag on the area. Restarting it would be “extremely important” because “these are such privileged areas” along Metairie’s main retail corridor, she said.
Jerry Bologna, head of JEDCO, the parish’s economic development commission, said the site “is probably one of the busiest intersections in the hallway,” adding that “any attempt (to bring in a new tenant) will be a net gain. “