This timely news article by Lidia Dinkova was originally posted on “The Real Deal” on April 6, 2021.

Thank you NRTA Vice President Debbie Ravel for bringing it to our attention!

Terranova wins suit against Regal Cinemas over $807K in unpaid rent at Boca Raton shopping center

Theater occupies 44K sf at Shadowood Square

Regal Cinemas must pay $807,118 for unpaid rent at Terranova Corp.’s Shadowood Square retail complex near Boca Raton, a judge ruled.

Palm Beach County Circuit Judge G. Joseph Curley ordered Regal Cinemas to pay its April rent of $79,129 by Monday, and $807,118 of back rent for previous months by April 23.

Knoxville, Tennessee-based Regal Cinemas, through affiliate R.C. Cobb, leases 44,845 square feet at the shopping plaza at 9789 Glades Road. The movie theater conglomerate, a subsidiary of London-based Cineworld, has remained closed nationwide since October. Regal Cinemas said it will reopen 500 branches on Friday, CNBC reported.

Attorney Howard Camerik, shareholder at GrayRobinson who represents the theater affiliate, declined to say how the company plans to proceed after the judge’s ruling.

Miami Beach-based Terranova, led by Stephen Bittel, sued the theater affiliate in September over 10 months of unpaid rent, and sought eviction. Terranova owns the 220,426-square-foot Shadowood that spans 19 acres.

Shadowood attorney Mitchell Berger, a Berger Singerman partner, said the landlord hopes the movie theater will reopen at Shadowood.

Terranova and Regal Cinemas last year hammered out an amendment to the lease, allowing the movie theater to shave off 20 percent of past due rent for the months of April through July 2020, and then pay them in 14 installments. The Shadowood Regal Cinemas was closed during those months, under a state order to stop the spread of coronavirus.

Terranova, in its suit, alleged that Regal Cinemas also didn’t pay rent from September to February, and also failed to make several of the reduced payments for back rent.

Regal Cinemas in a court filing raised a force majeure defense, and said the Hollywood movie industry had suspended new releases, hindering the movie theater’s business.

“These premises are leased for the operation of a movie theater, and no business, including the restaurant business, has been more profoundly decimated than movie theaters,” Camerik wrote in the filing.

Terranova countered that force majeure can’t be used to protect from a change in economic circumstances, and that the lease allows for the Shadowood Regal space to be used for other events, such as concerts, projections of other production, fashion shows, meetings and exhibits.

In his order issued Thursday, Curley pointed out that Shadowood Regal Cinemas reopened temporarily from September until early October. Curley also pointed to testimony by Regal Cinemas Vice President and Senior U.S. counsel, Warren Sanger, at a March 24 hearing in which he explained the decision to close all Regal Cinemas.

“Mr. Sanger testified that part of the reason that Regal Cinemas closed all of its movie theaters nationwide, including in Florida, was to save money because New York and Los Angeles would not allow Regal to reopen in full in September 2020,” Curley said in his order.

Berger also said Sanger’s testimony was key to the case. “We are grateful that the court understood that the lack of first-run movies was not the exclusive reason that Regal did not pay rent,” he said.

Movie theaters nationwide have been struggling during the pandemic, which arrived on the heels of already dwindling patronage.

The Shadowood case is one of many landlord-tenant rent disputes that have ensued over the past year. In one of the bigger South Florida cases, Bal Harbour Shops sued to evict Saks Fifth Avenue for allegedly failing to pay more than $1.8 million in rent.