JJD-HOV Elk Grove, LLC v. Jo-Ann Stores

facts.

1 The term is frequently spelled “cotenancy.” We spell it co-tenancy because that is how the parties spell it.

2 JJD owns a shopping center in Elk Grove. In June 2003, JJD and Jo-Ann entered into a lease agreement pursuant to which Jo-Ann leased approximately 35,000 square feet of space in the shopping center.2 The term of the lease was 10 years, commencing in September 2004, with four options to extend the term for five years each. “Fixed Minimum Rent” was initially $36,458 per month, and it increased every five years. At the time of the events giving rise to these lawsuits, Fixed Minimum Rent was $42,292 per month. As relevant here, the lease contains a co-tenancy provision that provides, “To induce Tenant to enter into this Lease . . . Landlord represents that it has entered into or shall enter into binding leases . . . for the use and occupancy of either: (x) [three so- called ‘anchor tenants’ or comparable substitutes] . . . or (y) sixty percent (60%) or more of the gross leasable area of the Shopping Center (excluding the Premises).” (Italics added.) The co-tenancy provision must be met by tenants that are open for business. If the co-tenancy provision is not met,…