US retailer A&P has reportedly stopped paying rent on nearly 2 million square feet of retail and industrial space in Detroit, triggering 24 lawsuits.
Crain’s Business Detroit reported that A&P is trying to walk away from nearly US$150m in unpaid rent in metro Detroit, nearly three years after the grocer’s Farmer Jack stores left the region.
According to the report, in 2007, A&P decided to leave the region, vacating 66 stores, with 20 bought or leased by Kroger. Several others have been leased or subleased.
There are still 27 stores under long-term leases, with some running beyond 2010. For three years, A&P had been paying rent and seeking sub-leases until June.
According to Crain’s, landlords received letters that say Bormans, the former owner of Farmer Jack, “has decided to return possession of the leased premises” to the owner and that the company will “cease paying rent”. The letter reportedly added: “Enclosed please find the keys to the front door of the locked premises.”
A&P has been facing spiralling losses, posting an operating loss of $22m in the year to 27 February as well as instability in senior management, appointing two chief executives this year.
A&P did not respond to calls for comment.
