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Gap Settles Legal Skirmish With Midtown Landlord Over Unpaid Rent

1212 Sixth Ave.

After withholding hundreds of thousands of dollars from its landlord in rent, Gap and its landlord on Sixth Avenue have reached an agreement.

Gap had failed to pay more than $530K to its landlord, Stawski Partners, The Real Deal reports. The landlord sued the retailer in the Southern District of New York over outstanding funds, which included water and snow removal fees. Gap responded by saying the lease for its store at 1212 Sixth Ave. should be terminated and money refunded because of the coronavirus pandemic.

The retailer, which is battling lawsuits at multiple locations across the country, had used the “frustration of purpose” argument to try and get out its lease. Many retailers have used that tactic to try and get out of lease obligations, claiming the inability to operate a store because of the pandemic and the government-imposed shutdowns meant their contracts are no longer binding. Lawyers have previously told Bisnow it is a “Hail Mary” strategy that is unlikely to work in many cases.

The dispute between Gap and Stawski settled last week, per TRD, but the terms have not been made public.

Lawyers for Victoria’s Secret had tried to argue the store’s lease at SL Green’s 2 Herald Square — where it paid nearly $1M in rent per month — had been rendered “nonsensical” by the pandemic and its impacts. However, a judge dismissed the lawsuit last month, potentially signaling to other retailers that the government-enforced store closures will not provide a way to avoid paying rent or exit leases.