Last Saturday, July 27, Lingerie Lounge in the Village at Mammoth closed its doors — papering the windows and ceasing operation after 10 years. One of the first tenants in the Village, Lingerie Lounge owner Marlene Rheault rode the waves in that location over the years, but finally had enough.
In the past year, Rheault has been working with CNL — landlords at the Village — on a renewal of her lease.
According to its website, CNL is a real estate investment trust (REIT) that invests in income-producing properties with a focus on lifestyle-related industries.
“I had 10 years left on my lease, and when I executed an option they [CNL] emailed me a brand new lease and said sign it or get out,” Rheault said.
The process started in February 2012 when she contacted Intrawest, which works as the Village’s property manager for CNL, regarding her lease.
“I was under the impression my lease expired June 2012 in which I would have to execute my option 180 days prior to that,” she said. “The lease didn’t actually expire until December 2012 and at that time I was told that documents would be provided to extend the lease to May 31, 2013.”
However, by the end of the year, Rheault hadn’t heard much from Intrawest and every time she asked about completing the renewal process she was told she would be contacted.
“Frustrated, I made them get the document extending my lease until May 2013 which they provided in October which then gave me to January 31  to execute my option. They continued to stall into the new year.”
She finally had a meeting with Intrawest and CNL in late January 2013 where the details of her renewal were discussed. Following that meeting, Rheault said they continued to negotiate beyond the Jan. 31 date for a minor lease amendment as a condition of the lease renewal and came to an agreement on Feb. 8. She was told they would “send the documents” to her.
“Three weeks later a new lease showed up saying ‘we need 3 signed copies’ but no mention that it was a new lease. When I told them I had no obligation to sign a new lease and they needed to provide the correct documents, they told me those were the only documents I would be getting and if I didn’t sign them I would have to leave May 31, 2013.”
“I had asked for a renewal with a slight modification,” she said. Rather than a 2, five-year option, Rheault had asked to be allowed 3, three-year options.
To date, Rheault said that four tenants, including herself, in the Village have struggled with lease negotiations. One tenant is suing, one signed the new lease unknowingly, and another vacated as Rheault now has.
“A renewal is advantageous to the tenant,” Rheault explained of why the thought of a new lease was daunting. “It allows you to keep the same terms. With a new lease you have to start from scratch.”
Negotiating a new lease means hiring lawyers and expenses that Rheault wasn’t willing to pay. “I’d already negotiated, I had a lease,” she said.
Rheault said that since February she has not been given the renewal documents she has asked for, and she has never been told why she needed a new lease. She was expected to vacate her store by Wednesday, July 31 under a verbal agreement made with a representative of Intrawest.
“They keep accepting my rent, but they’ve threatened to file an unlawful detainer against me,” she said, in between packing up her store.
Rheault said that if you were to ask CNL its side of things, employees would say she wasn’t clear in her plans to renew, despite more than 20 emails sent titled “Lease Renewal.”
“They’ve created their own legal technicality by intentionally stalling and negotiating verbally past Jan. 31,” she said. “Their legal position is that I wasn’t clear.”
Rheault blames the breakdown in communication on two things. First, she said there is a new person negotiating the leases. “The new guy is ruining the relationships that the old guy had built up,” she said, not wanting to name, names.
According to Rheault the old negotiator was actually willing to work with tenants. When Rheault sent a letter to the CEOs of CNL and Intrawest asking if they were aware that the new negotiator was negotiating one thing and sending documents for another, she received an email telling her to vacate her store.
“Within 12 hours of sending the letter I was told to get out,” she said.
She also pointed to the fact that CNL is looking to sell the Village and perhaps would like all of the tenants wrapped up in the same lease to look better for potential buyers. She believed that the terms of the new lease were very advantageous to the landlord.
In May, the Denver Post reported that CNL had seven village properties on the market. The Village at Mammoth was listed as one of those seven.
Rheault also owned a Lingerie Lounge in San Diego, but closed that shop when the recession hit. The Mammoth Lingerie Lounge was the original store.
At this time Rheault had no plans to open her shop elsewhere in town.
“I’m over commercial landlords,” she said.