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Holly Hill Mall sues tenant Dunham’s over unpaid rent; sports store could face eviction

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The Dunham’s sporting goods store at Holly Hill Mall is being sued by the mall’s owners for allegedly failing to pay the full amount of its monthly rent since the fall of 2020 – and could face eviction.

The lawsuit was filed Thursday in Alamance County civil superior court.

Several documents, to include a copy of the lease, were filed along with the complaint but marked “provisionally under seal.” And substantial portions of the complaint, such as the physical specs for the space that Dunham’s occupies at the mall, are also redacted (i.e., blocked from public view) from the complaint.

According to the suit, Dunham’s had initially opened in 2012 in a space on the southwest side of Holly Hill Mall, which was later demolished to make way for a free-standing Publix grocery store. The amount of the monthly rent and term of the lease are redacted from the complaint.

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The lease to Dunham’s was later amended in September 2019, for a term scheduled to run from February 1, 2020 until January 31, 2025 for an amount of “gross monthly rent” that’s also redacted from the suit.

Dunham’s asked for its monthly rent to be reduced, apparently due to the departure of Sears, an anchor tenant, in early 2020. Sears vacated its store at Holly Hill mall around February 2020, according to the suit.

Around April 2020, “Dunham’s Sports requested that Holly Hill Mall, ‘in that spirit of mutual beneficial agreement during these unique times,’ reduce the Amended Monthly Gross Rent,” the complaint states, adding that Holly Hill Mall honored the request for a reduction in Dunham’s rent.

Later, the mall’s owners “learned that Dunham’s Sports’ gross sales at the shopping center [redacted”; and later spent $65,207 on new HVAC units for “demised premises” that Dunham’s has been in possession of since July 2012, the suit alleges.

On August 25, 2020, Dunham Sports notified the mall’s owners by letter stating that the sporting goods retailer had wrongfully asserted its own right to reduce monthly rent payments due to Sears’ departure from Holly Hill Mall.

The mall’s owners informed Dunham’s of the pending arrival of a Publix – which Dunham’s allegedly knew about for at least two years – and insisted that Dunham’s pay the apparently higher “Amended Monthly Gross Rent” agreed upon as part of the 2019 lease amendment.
Publix opened at Holly Hill Mall in October 2021.

In January 2022, attorneys for Holly Hill Mall notified Dunham’s by letter that Publix “had opened for business in the space formally occupied by Sears and that such retail grocery represented value to Dunham’s Sports and the entire Shopping Center above that [amount] afforded by Sears,” the suit asserts.

The mall’s owners allege that Dunham Sports has failed to make full monthly rent payments since October 2020 and “is in arrears to Holly Hill Mall for payments of Amended Monthly Gross Rent in the amount of [redacted].”

Attorneys for Holly Hill Mall most recently notified Dunham’s Sports that it was delinquent on its rent on May 22, 2023, and demanded payment of all outstanding rent, plus interest, within five days, according to the lawsuit.

In addition to the alleged outstanding delinquent “Amended Monthly Gross Rent,” Holly Hill Mall is also seeking recovery of damages from Dunham’s for allegedly breaching the lease; interest; and attorney’s fees.

“Holly Hill Mall has a right, in addition to other remedies,” the complaint states, to terminate the premises and take possession of the premises; remove all persons and property; and take any other actions necessary to retake exclusive possession of the premises.

Holly Hill Mall, which is located off Huffman Mill Road in Burlington, is being represented by Craig Turner of the Vernon Law Firm in Burlington. (Turner is also an Alamance County commissioner.)

Dunham’s had not filed a response by press time Wednesday.

Founded in West Bloomfield, Michigan in 1937 as Dunham’s Bait & Tackle, the retailer currently operates more than 250 stores in 23 states, according to its website. Dunham’s opened 10 new stores last year and expanded two existing locations so far this year.

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