Reply to RIP Johnson's -- Now let's move on

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Reply to "RIP Johnson's -- Now let's move on"

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[quote=Anonymous]Here's the letter from AU about Johnson's, copy-and-pasted from the Chevy Chase listserv. AU says it went well beyond what they needed to do to keep Johnson's there, and that the owners had been thinking of leaving Tenleytown (or at least changing locations) for a long time:

"AU Statement on the closure of Johnson’s Florist and Garden Centers’
Washington, DC location

"American University wants to correct and clarify statements that have
been made in connection with the tenancy of Johnson’s Florist and Garden
Centers at the University-owned property at 4200 Wisconsin Avenue, NW.
We also are sharing a timeline and some basic facts that led to
Johnson’s recent decision to close its Tenleytown location at the end of
its lease in January 2018. We have decided to share this information now
to accurately detail the University’s actions in this matter.

• Johnson’s has been a tenant of AU since the University purchased the
property located at 4200 Wisconsin Avenue, NW in 2000. It occupied
16,256 rentable square feet of Indoor Retail Space on the ground level
in the building and 27,108 square feet of Outdoor Space.

• In 2014, when Johnson’s and AU attempted to negotiate a ten-year lease
for a term to start in January 2015, Johnson’s first expressed concerns
about the viability of its Tenley location.

• As a result of Johnson’s desire to limit its financial exposure and to
postpone its decision whether to stay in Tenleytown for the long term,
Johnson’s requested, and the University granted, a short term (three-
year) extension, which is unusual in commercial leasing, so that
Johnson’s would have the opportunity to better evaluate the viability of
the location. Johnson’s asked for the extension specifically to (a) seek
DC Government approval to use property adjacent to the Outdoor Space for
commercial purposes; (b) consider the restructure of its business
operations at 4200; and (c) explore the relocation of its business at
4200 Wisconsin to another site in the Tenley neighborhood.

• During this three-year period, the University not only worked with
Johnson’s owners to create a sustainable business model for the unique
space it occupied at 4200 Wisconsin, but the University paid from its
own funds half the cost of consultants retained by Johnson’s to evaluate
the long-term viability of their Tenleytown operations.

• In the fall of 2016, anticipating the expiration of the short-term
extension, the University and Johnson’s agreed to begin negotiations on
a long-term (ten-year) lease. In February of 2017, both parties signed a
Letter of Intent (LOI). The University then sent a lease reflecting
those LOI terms to Johnson’s for its signature.

• As mutually agreed, the LOI reflected below-market rent and the full
amount of real property taxes for the Outdoor Space which the parties
had agreed was appropriate since Johnson’s would continue to have
exclusive use of the space for the greenhouse and customer parking.

• In the summer of 2017, Johnson’s requested significant material
changes to the LOI terms including additional financial concessions and
changes to operating agreements that would affect other building tenants
(exclusive use of a loading dock) or that were not within the
University’s power to grant (allowing parking in the fire access lane).
In sum, Johnson’s wanted about $2,000,000 more in financial concessions
over the term of the lease beyond what they had agreed to in the signed
LOI, as well as operational changes the University could not provide.

• The additional demands could not be met by the University. The
University renewed its offer to abide by the terms that the parties had
set forth in their signed LOI, but Johnson’s declined.

• In August of 2017, Johnsons notified the University that they would be
moving out at the end of the current lease (January 31, 2018). Johnson’s
waited until January 3, 2018 to publicly announce that they would
close their Washington, DC location on or before January 14, 2018.

"The University took significant and reasonable steps to try to
accommodate Johnson’s Florist and Garden Centers. It spent its own time
and money to try to work with Johnson’s on a financial arrangement that
would work mutually. While acknowledging that Johnson’s has been a
valued tenant and the neighboring community benefits from Johnson’s
services, our fiduciary responsibility to be good stewards of limited
University resources dictated that we could not agree to an arrangement
with terms substantially below market value for the location.

"We hope that this information is helpful in providing additional
perspective for the surrounding community on the good faith discussions
that took place regarding Johnson’s tenancy."[/quote]

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