CANADA. Douglas Crossing Duty Free has been granted a temporary injunction to halt the attempted termination of its sub-lease for a duty free border shop on land owned by the Semiahmoo First Nation. Douglas Crossing is the main crossing point between Vancouver and Seattle.
The development is the latest in a long-running and sometimes bitter saga over the store. Late last month, Douglas Crossing owner Michael Beler finally received the signed ministerial duty free license to proceed with the duty free store.
At that point Beler told The Moodie Report that he was looking forward to having a temporary store operational soon and beginning construction on a permanent 25,000 sq ft (2,416 sq m) store by December-January. The Canada Customs and Revenue Agency (CCRA) awarded the tender to Douglas Crossing Duty Free earlier this year.
Documents filed in the British Columbia Supreme Court this week claim that if the sub-lease is terminated by the landlord, the latter will lose a minimum of C$40 million in rent over the term. The landlord claims that it is entitled to terminate the sub-lease because Douglas and Beler are late completing the temporary store.
Beler told The Moodie Report that the landlord had initiated the termination on 1 October, the date the shop was due to open. “The trial has been adjourned until 21 October and we have a temporary injunction (uncontested) until the 22nd,” he said.
“It doesn’t seem rational for them to insist on terminating our sub-lease, as then CCRA, who license duty free stores, may cancel our license,” Beler commented. “[They] will give up their opportunity to earn millions in rent from this operation, and we will lose what we’ve invested in the project, and the opportunity to operate what we believe will be a profitable store.”
Beler told The Moodie Report this morning: “I am hopeful that we can resolve all outstanding issues with our landlord. We may have gotten off to a rocky start, but there is no reason we can’t finish in a mutually beneficial way. The temporary shop will be finished shortly and then we can start planning for the permanent store.”
Last month, unsuccessful bidder, Peace Arch Duty Free president Peter Raju, announced he was contesting the award of the license, claiming that he had signed an agreement with Beler to purchase Douglas Crossing Duty Free and help the company secure the necessary land lease.
