Landlord raises fees for Classen Curve retailers
Tenants in the Classen Curve shopping center say their landlord has demanded unreasonable increases in fees they pay on things like landscaping and other maintenance fees.
Bob Benham, owner of Balliet's, Classen Curve's anchor clothing store, said he and other tenants have faced substantial fee increases over the past year.
"Both Balliet's and the other tenants are working toward a positive resolution," Benham said. "We think this a terrific location, and we want to get this resolved and be supportive of what they are doing with the center."
Classen Curve owner Washington Prime Group has also demanded tenants pay retroactive fee increases going back several years, Benham said.
Classen Curve's ownership has changed several times over the past few years, causing problems with communication between tenants and the shopping center, Benham said.
"There has been a breakdown in communication with the landlord," he said. "we want to resolve these issues amicably, but we also want them resolved fairly."
As part of the fee dispute with retailers, Washington Prime last week filed forcible entry and detainer lawsuits against two tenants at the upscale shopping center — the home furnishings store BD Home and Cafe 501.
Washington Prime Group declined to comment on the fee increases or its lawsuits against tenants.
Adam Branscum, co-owner of BD Home, said Washington Prime Group has raised fees on maintenance of common areas of the shopping center by about 80 percent over the last year, although Branscum said his lease with the shopping center has a cap on such fee increases.
While Washington Prime's lawsuit against the retailer claimed the store was no longer in business, BD Home remains open, Branscum said.
Branscum said the lawsuit contains many errors on the amount of rent BD Home owes. Classen Curve's ownership also did a poor job of notifying him about the large fee increases, he said.
"There's multiple tenants in this situation," Branscum said. "We took a different path because we started withholding some rent."
Branscum also said that changes in the shopping center's ownership over the past two years have led to poor record keeping and miscommunication between the shopping center management and tenants.
Chesapeake Energy Corp. and its late founder Aubrey McClendon developed Classen Curve Shopping Center as a recruitment tool for its corporate headquarters in northwest Oklahoma City.
"Mr. McClendon negotiated very fair leases for his tenants," Branscum said. "He was interested in making money, but there was also a more personal side to it. He cared about the community. The current landlord does not like those current leases because they think they could do better."
The property was sold to the Ohio-based real estate investment trust Glimcher Realty Trust in 2014. Glimcher also acquired the adjacent Nichols Hills Plaza shopping center and several acres of undeveloped land between the two shopping centers for a combined $51.8 million purchase price.
The real estate firm Simon Property Group then acquired Glimcher Realty Trust. Washington Prime Group was formed in May 2014 following a spin off from Simon and Glimcher.
Attorney Myrna Latham with the firm McAfee & Taft, who represents Classen Curve tenants Red Coyote Running and Balliet's, said the tenants reached out to her about their concerns about cost increases at the shopping center including common area maintenance fees, trash fees, insurance and property taxes.
The tenants are still working toward a positive resolution to the situation, Latham said.
"We are hopeful and optimistic we will be able get some additional information from the landlord," she said.