LA CROSSE, Wis. -- The City of La Crosse and a Madison firm have resolved differences over rent payments for retail space at the downtown Grand River Station transit center.
Gorman & Company had skipped about $40,000 in rent payments for the retail space that has been empty since early 2010. Gorman & Company officials had been concerned about the parking situation in downtown La Crosse.
In a press release late Tuesday, city officials say Gorman & Company has paid the full lease amount.
"While we've been discussing this issue with the city throughout 2011, we've been working cooperatively," says Ted Matkom, Gorman & Company's Wisconsin Market President. "We have always complied with our obligations, and we have always intended to fully honor our commitments."
The city had offered the company a forbearance agreement, which means that no legal action will be taken against Gorman & Company as long as the company agrees to pay its debt by the end of 2012.
LA CROSSE, Wis. -- The developer of the retail space at the Grand River Station has skipped about $40,000 in rent payments to the city of La Crosse. The payments date from January to August.
Even though the company is technically in default, the two sides are trying to come to an agreement that would avoid legal action.
Madison-based Gorman & Company is in charge of leasing out about 12,000 square feet of retail space on the lower level of the multi-use site. The space has sat empty since going on the market in early 2010.
Ted Matkom, the company's president of Wisconsin operations, believes one of the main reasons why is that possible tenants have been scared off by the lack of parking spaces in the area. The nearby La Crosse Center parking ramp has been packed the last 8 months because of the reconstruction of another downtown parking area.
"The displaced parkers, as a result of that construction, went to our ramp and the ramp filled up on a daily basis which really made the retailers look at that ramp as not reliable for their customer base," said Matkom.
Company officials argue because of the parking situation, the city was not living up to the terms of the lease agreement.
In response, Gorman & Company decided to stop making its roughly $5,000 monthly rent payments. That adds up to more than $40,000 in unpaid rent.
"It's disappointing," said Keith Carlson, the director of La Crosse MTU.
"Gorman is a partner in this project with us. They have done a great job with the housing and they are making regular monthly rent payments for the parking they have with us here for their residents. So it's dissapointing. We hope they can make us whole on the rent they owe us," said Carlson.
As a possible compromise, the city of La Crosse is planning on offering the company what is known as a forbearance agreement. It basically means that no legal action will be taken against Gorman & Company as long as the company agrees to pay its debt by the end of 2012.
"I think the city has given them a grace period of almost a year of not paying rent. What we're asking from them is to make future rent payments with an additional amount added each month for the back rent they owe us," said Carlson.
Matkom says the company will consider the offer, but he doesn't think it's a fair deal.
"I don't think the full rent payment is justified because of the changed parking situation. So I think some sort of rent abatement is (appropriate)," said Matkom.
Matkom pointed out the company did pay its rent for the month of September. He says the reason why is the parking situation has been resolved.