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The nation's largest electronics retailer on July 14 told Faison, a Charlotte developer, that it was terminating its lease for a 30,000-square-foot store nearing completion at the Alexander Place Crossing Shopping Center. It's at the intersection of U.S. 70 and Brier Creek Parkway.
City ordinances prevent signs as large as those detailed in an October 2007 lease. Best Buy deemed that a reason to end the landlord-tenant agreement.
Faison, which borrowed $18.7 million to build the shopping center, has sued to stop Best Buy from walking away.
The company's "actions threaten to collapse and cause waste to the entire Alexander Place Crossing project," Faison wrote in July 23 lawsuit filed in Wake County Superior Court.
The matter was later moved to U.S. District Court, and a federal judge Friday temporarily halted Best Buy from ending the lease.
Faison, through its attorney, declined to comment for this story. A spokeswoman for Best Buy did not return phone calls.
Best Buy, which has an initial 10-year lease, was supposed to have space for 700 square feet of signage. In February, after construction had begun, Faison said it learned that city rules prevented that much space. Signs that face the roadways could total only 300 square feet, according to court filings.
That's a problem because "the signage at this location is crucial due to the characteristics of the site," Best Buy attorney Albert B. Beety wrote in the July letter attempting to cancel the lease.
A tree conservation area, in part, obstructs views at the site.
Faison, which estimates the building is more than 80 percent complete, had to notify its lender when it received the Best Buy letter. Regions Bank, according to court records, has refused to release any more funds for the project. And without more money, Faison likely will have to stop work by Aug. 15, the records say.
The harm in halting a project of that size "is evident and significant," Judge Malcolm J. Howard wrote in his ruling. "The building would sit partially finished and useless. Contractors and subcontractors will move on to other jobs, attaching liens to the property for unpaid work. The cost and effort needed to restart a project of this size, once it is stopped, is greater than what is needed to continue an ongoing project."
The preliminary injunction Howard approved prevents Best Buy from ending or attempting to end its lease before Sept. 11. That's when, according to terms of the initial lease, Faison is supposed to turn the store over to Best Buy.
jonathan.cox@newsobserver.com or (919) 836-4948
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