Discount and Hawkins Exercise: Confidential Instructions for Tenant Instructions
You represent a major retail chain engaged in a difficult negotiation with the developer of a proposed new shopping center. Although you have worked out most of the key provisions of a longterm lease, your company and the developer are currently at impasse over the clause that would govern the allowable use, assignment, and subletting of the premises.
Your assignment is to make one last effort to break this impasse. If the developer insists on its proposed terms, you will kill the deal and seek another shopping center in this region for your store. Before you abandon this project, however, you should try to craft a solution that would meet your interests but which you can also persuade the other side to accept.
General Background
Do
No
The Merrimack Works, once a thriving glass factory on the banks of the Merrimack River in the town of Northport, Massachusetts, is the site of a new shopping mall planned by Hawkins Development (œHawkins). Hawkins is a small but reputable development company founded in the early 1980s. Since then it has developed a number of successful office, commercial, and mixed-use projects, though the Merrimack Works Mall would be Hawkins’s largest venture to date. Hawkins recently approached Discount Marketplace (œDiscount), a leading national retailer of discount soft goods€clothing, shoes, accessories, housewares, gifts, etc.€as a possible anchor tenant for the mall. Well-known operations like Discount (which has more than 200 stores nationwide) draw customers to a mall and thus encourage smaller satellite tenants to locate there, as well. Developers typically need signed leases from one or more anchor tenants in order to get lenders to provide project financing. The Merrimack Works site is a good location, near the expressway that links Northport to metropolitan Boston. The local economy is reasonably strong though there is some concern
