Amazon Grocery Store Backs Out of Lease Resulting in Lawsuit
According to news sources. plans for a new Amazon Fresh grocery store in the Seattle suburb of Renton have spoiled. Boston-based landlord The Landing has accused Amazon of breaching its contract with the company after the tech and e-commerce giant backed out of a lease for 40,000 square feet of retail space that was slated to house a grocery store in a Renton shopping center.
The Landing sued Amazon on Monday in King County. According to court documents, Amazon said it wasn’t able to get all the necessary permits and approvals, but The Landing has accused Amazon of breaking the lease as part of its bigger strategy to re-evaluate its brick-and-mortar grocery store presence.
“All of [Amazon’s] asserted grounds were false and contrived,” and used to move along its “publicly acknowledged strategy of slowing growth of its grocery operations,” attorneys for The Landing wrote in court documents.
In response to the litigation, Amazon spokesperson Jessica Martin said the company, “like any retailer,” periodically assesses its portfolio of stores and makes “optimization decisions that can lead to closing existing locations or choosing not to pursue building a planned location.”
As part of the deal, the landlord would also make a long list of improvements to the space, including providing structural support for the ceiling, installing two elevators and resurfacing the parking lots with charging stations for electric vehicles. The lease was originally set to last 15 years but Amazon terminated the contract in November 2022, roughly a year after signing, according to court documents.
Amazon said then that it could not get all the necessary permits and approvals and that The Landing had not upheld its end of the bargain, according to court documents. Specifically, Amazon accused The Landing of failing to get a waiver from the neighboring Marshalls store.
The Landing, on the other hand, said Amazon had not made “reasonable and good faith efforts” to get those permits and approvals. The landlord said it did fulfill its part of the deal and was facing $2.1 million in costs related to improving the space. The Landing accused Amazon of backing out of this lease in order to minimize its grocery footprint, part of its “publicly acknowledged business strategy,” attorneys wrote in court documents.
Amazon executives said earlier this year the company was pausing growth for its Amazon Go convenience stores and Amazon Fresh grocery stores as it works to refine the format. CEO Andy Jassy said in February that Amazon is “doing a fair bit of experimentation” to find the format that resonated with customers and “where we like the economics.”
Amazon announced in March it would close eight Go stores, including two in Seattle. The closing stores are located at Third Avenue and Pine Street, inside the former Macey’s building, and at Fourth Avenue and Pike Street.
In Renton, The Landing is asking the court to require Amazon to pay back money from lost rental income. The total amount will be decided at trial, according to court documents, but the landlord estimates it could be $14 million.
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