Foley's plans to close its store by April 1 due to the condemnation form the Lakewood Reinvestment Authority.

In the letter, Vaughan says that Continuum wanted to increase Foley's rent to $450,000 a year from about $65,000 a year, which amounts to a 592% increase.

Foley's had a ground lease on the 130,000-sf store and built its own building.

''Continuum insists on taking our store for FREE (Vaughan's emphasis) requiring us to give them the money to which we are entitled in the condemnation action, and then complains that we're being 'subsidized' by paying lower than a 'market' rent,'' he writes.

Foley's was willing to double its rent, he says, and pay a percentage rent upon completion of the redevelopment, ''but no reasonable business person could justify Continuum's rent demands.''

Tom Gougeon, a principal of Continuum, says the company will not negotiate the lease in public.

Gougeon says Continuum at times came close to signing Foley's as an anchor tenant in the new, $560-million project, which will serve as a Downtown for Lakewood.

''It's unfortunate after nine months of negotiations we couldn't reach an agreement,'' Gougeon tells GlobeSt.com. ''We'd still like to have them as an anchor tenant. We don't need to have a department store, but Foley's does have a record there and people are familiar with it, so it would be a natural.''

Vaughan also claims that the city and Continuum violated Foley's due process through the condemnation.

''This circumvention of the intent of the condemnation law was compounded by a 'clever' use of the ownership structure of the mall in an attempt to further reduce the condemnation proceeds available to Foley's and other tenants,'' Vaughan writes. ''This was done NOT for a public purpose but simply too allow the city get control of a property, which it had no legitimate rights to do and to allow a private company to make a far greater profit than if the company had offered and paid a fair market value for our property.''

Mike Rock, Lakewood's city manager, says all of the issues raised in the letter from Vaughan have been raised in the past and have been dealt with in court proceedings. But he says the letter may represent the first time the city has received a communication in writing from May, other than a subpoena.

Instant Insights /

May's Chain Protests Condemnation, Rent Demand

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