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John Hageman, Forum News Service, Published February 11 2014

Grand Forks' Columbia Mall responds to Gap lawsuit

GRAND FORKS - The owner of the Columbia Mall claims that an international clothing retailer owes it more than $131,000 for unpaid maintenance fees.

The claim came in GK Development’s response to a lawsuit from the Gap filed earlier this year in U.S. District Court. The California-based apparel retailer argued that GK, which owns and manages Columbia Mall, owes it at least $272,415 in “improperly collected” maintenance expenses over the past few years.

The dispute is rooted in the language of the lease agreement between the Gap and the mall. The Gap argues that its share of common area maintenance fees is included in its rent, as it says was agreed to by the former owner of the mall.

But in its response filed in mid-January, GK Development argues that it reviewed the lease in 2011, and determined that the Gap “was obligated to pay on an annualized basis the tenant’s share of center expenses which included the tenant’s share of the common area maintenance and (heating, ventilation and air conditioning) expenses.”

Common-area maintenance is generally the expenses a landlord incurs for the upkeep of a commercial property. Examples can include snow removal and outdoor lighting.

The Gap said GK required it to start paying maintenance fees in the summer of 2011, which the retailer began paying “out of an abundance of caution.” GK said the Gap has paid maintenance fees for 2010 through part of 2013, but argues that it has failed to pay maintenance fees for 2008 and 2009, and owes the mall $131,583.30.

The Gap filed an answer to GK’s counterclaim last week, denying that it owes the mall any fees, and again requested the $272,415 it says was improperly collected, as well as attorney fees.

A pretrial conference in the case is scheduled for Feb. 18 in Fargo.