Consignment shop

Lush sues First Street Napa mall after leaving lease years earlier

Take a tour inside the First Street Napa mall. The center is almost entirely rented and includes more than 45 shops and restaurants.

In April 2018, Lush Fresh Handmade Cosmetics became the first national tenant to open in Napa’s newly redeveloped First Street Napa Mall.

It was also the first national tenant to vacate First Street Napa – less than 24 months later.

Four years after its debut, First Street Napa is now almost entirely occupied by national, regional and local retailers and office tenants. Lush is long gone, but his lease remains disputed.

On October 18, Lush filed a lawsuit in Napa County Superior Court, alleging damages for breach of contract by the center’s owner and operator, NTC Shops.

The company says NTC Shops owes Lush $268,721 for improvements Lush made to the space.

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Not much was said publicly when Lush left First Street Napa. But according to court documents, Lush was assured that other comparable retailers would also join them as the first tenants in a sprawling downtown project.

According to Lush’s 2016 lease, at least six out of a collection of 10 “luxury” retailers – Anthropologie, Lululemon, Cos Bar luxury cosmetics, Tommy Bahama, Kiehl’s, Rodd & Gunn clothing, Compline, Maris Collective, Williams-Sonoma and Paper Source – were promised to open by May 2017.

If that doesn’t happen, Lush could end its 10-year lease early.

As of May 2017, only Tommy Bahama, Compline, and Maris Collective had opened at First Street Napa. Yet Lush still forged ahead with its 2018 opening, likely anticipating that other national retailers would soon join the hub.

But at the end of 2019, Lush couldn’t wait any longer. Sales figures weren’t included in court documents, but in November 2019, Lush gave notice to terminate its lease. The soap factory has moved.

Today, Riza Plants, a store owned by Napan Alyssa Parras Piombo, occupies this space. Riza has just celebrated her second birthday.

A milestone at Lush

It was a big deal when Lush’s lease was announced.

First Street Napa called the commitment a “development milestone,” which the developer Todd Zapolski and his NTC Shops partners had purchased five years prior.

After rumors swirled about an Apple, Tiffany & Co. or Louis Vuitton store, Lush, which started in Poole, England in 1995 and operated 919 stores in 2021, was the first nationally known retailer to be publicly identified. .

The First Street Napa Mall, which opened in 1987 as Napa Town Center, had struggled financially for years before the sale. Zapolski partnered with Trademark Property Company to redevelop the center.

Zapolski Real Estate, LLC and Trademark Property Company recently secured $42 million to refinance First Street Napa.

Valued at more than $200 million, the First Street Napa redevelopment includes more than 40 shops and restaurants and the 183-room luxury Archer Hotel. The hotel was developed by LodgeWorks Partners.

The lease details for Lush at First Street Napa illustrated the caliber — and financial capabilities — of the desired tenants.

Rent for the 1,464 square foot Lush store started at $9,150 per month and would reach $11,938 per month in the 10th year. On top of that, Lush agreed to pay 6% of its gross sales to owner NTC Shops.

Under the lease, NTC Shops barred a variety of tenants from renting space in First Street Napa — including thrift or consignment stores, laundries or dry cleaners, bowling alleys or ice rinks, a morgue or funeral home, massage parlours, any store selling pornographic materials, or any vendor offering shows, rides, or carnival-type entertainment.

Signage, holiday closures, advertising and signage requirements have been carefully specified. Among other restrictions, tenants were not permitted to conduct “business outing” sales, install ATMs or coin-operated vending machines, use flashing or bright lights, use equipment not approved by Underwriters Laboratories or turn off display lights for up to one hour. after closing. The windows weren’t supposed to be painted for the holidays. Commercial tenants must be open seven days a week.

After Lush left, NTC Shops representatives initially seemed to agree that Lush was entitled to $268,721 in reimbursement for tenant improvements.

“The amount owed to the tenant… is $268,721,” wrote an attorney for Zapolski Real Estate on October 31, 2019. “The landlord will return this amount to the tenant after the termination date.”

However, after repeated demands, Lush was never paid, according to court documents.

According to Lush’s complaint, owner NTC Shops “now maintains, without explanation, that he owes Lush nothing at all.”

“Lush Cosmetics was one of our first tenants in 2016 when we were at the start of our downtown Napa development with few tenants,” said Zapolski, managing member of NTC Shops. “We had a good working relationship with Lush,” but the company “chose to vacate its lease…after 17 months of occupancy.”

“Unfortunately, we were unable to find a mutually acceptable solution to outstanding items related to a 2016 rental agreement, and continue to do our best to find a solution,” Zapolski said.

“This issue relates to issues from years ago and has nothing to do with the integrity of our current project.”

Biz Buzz: Lush opens in downtown Napa on Saturday, April 14.

Lush, the new tenant of First Street Napa, will open in downtown Napa on Saturday, April 14. Customers can receive a free luxury gift…

Indeed, today more than 45 other national, regional and other tenants have opened at First Street Napa including AnthropologyCalifornia Brandy House, Chateau Buena Vista + Earth & Sky Chocolates, The Copperfield Booksfree people, lululemonOverland Sheepskin Co., Compass, Silicon Valley Bank and The spaces.

Biz Buzz: lululemon Athletica is now open in downtown Napa

On Monday, Lululemon Athletica officially opened its new Napa location at First Street Napa.

Cos Bar luxury cosmetics, Kiehls clothing, Rodd & Gunn, Williams-Sonoma and Paper Source have never opened in First Street Napa. Anthropologie, Lululemon, Tommy Bahama, Compline and Maris Collective opened after Lush’s departure. The Tommy Bahama store has since closed.

Two new tenants on the mall’s east side are nearly ready to announce leases, a First Street Napa representative said. They include food and fitness.

You can reach reporter Jennifer Huffman at 707-256-2218 or [email protected]