Kimco Realty allegedly crushed a 27-year-old woman’s first brick-and-mortar business by doing massive construction and demolition work at the Fort Lauderdale retail plaza where she opened her coffee shop, according to a lawsuit.
Taylor Schear’s Sheer Hospitality sued Jericho, New York-based Kimco for $9 million in damages, alleging that the landlord started gutting the plaza days after she opened her Drip Coffee and, after she closed her café due to the disturbance, Kimco’s crews also expanded their work inside her retail unit. Sheer has continued to pay the $6,500 monthly rent for the unit and common area maintenance fees, but has been offered no alternative retail spaces at one of Kimco’s other South Florida holdings, according to the suit.
The complaint, filed in Broward County Circuit Court on Thursday, is against Kimco and its ownership entity for the plaza, Cypress Creek Associates Limited Partnership.
Schear, who also has talent and media agencies, had initially hoped to expand Drip Coffee around Broward County, as well as Miami and more suburban locations.
“Unfortunately, that wasn’t feasible because I am at a place where I am paying rent with no income,” Schear said, adding that she went in the unit last week to try to salvage some of her equipment, finding that the Fiberglas on Drip’s doors had shattered due to the work. “It’s fully a construction zone.”
A Kimco spokesperson said the firm disagrees “with the characterization of events and allegations,” declining to comment further.
Sheer Hospitality leased about 1,600 square feet at the Cypress Creek Station shopping plaza in March of last year, spending more than $450,000 to get the space ready. Kimco didn’t tell her it planned construction at the plaza before she signed the agreement and afterward, told her there will be some work, though Schear says she wasn’t advised how extensive it would be.
The demolition includes razing an LA Fitness, movie theater and other spaces to make way for a Target, the suit says.
Two days after she opened Drip in September, Kimco started the construction work and about 10 days later, its crews started demolishing spaces surrounding Drip’s unit, according to the complaint. Some of the work eventually turned an interior wall at Drip’s unit into an exterior wall, Schear said.
Kimco’s notice was “almost like, ‘There’s going to be a little bit of noise next door but we are going to handle it,’” Sheer’s attorney, Jordan Shaw, said. “If you see this construction, it’s not construction. It’s demolition.”
Aside from the noise, dust and vibrations, the area around Drip’s entrance was fenced off, and at least once, “pieces of the ceiling fell into or onto customers’ food and beverages,” the suit says.
In December, Schear decided to close Drip, at first advertising this as a short holiday break. But by January, she was still receiving notices that the property is fenced off and construction is ongoing and in March, a Kimco representative told her crews will enter Drip’s space to cut tile and partially demolish the unit, according to the complaint. Eventually, the locks for Drip’s space were changed.
Although Kimco made assurances to Schear, after she complained about the work, that it would try to minimize impacts on her unit, none of these promises were met. Kimco, which owns several plazas across South Florida, also didn’t move Drip elsewhere, according to the complaint and Schear. In fact, her Sheer firm was a “pawn” for Kimco, used as a rent-paying tenant in the short term until Target, which will pay much more in rent, opened, the suit says.
In the complaint and during the interview, Shaw, of Shaw Lewenz, several times framed the issue in the context of Schear being a young woman.
While most of Cypress Creek Station’s tenants received other accommodations, this wasn’t offered to Sheer, perhaps because she “was a new tenant or worse, because of the gender of its young owner,” according to the complaint.
This seems to be a “pattern and practice” by Kimco that “has affected dozens of female-owned and minority-owned businesses at shopping centers in Florida and New York,” the suit says, providing examples of other issues reported by Kimco tenants, including one by a woman who had to carry wheelchairs up two flights of stairs for disabled patrons because Kimco refused to make the space ADA accessible.
“You have a 27-year-old woman who took a dive into one of the most difficult businesses, food and beverage service, and she did it on her own with close friends and family,” Shaw said. “The reason for the destruction of her business was not the economy or for a lack of effort or lack of profitability. The reason was because somebody destroyed the physical space she spent half a million dollars to build.”
As shopping centers across South Florida are being redeveloped, this is poised to become a larger issue affecting small business owners, Shaw said.
The $9 million in damages consists of the more than $450,000 Schear spent on building out her space; $100,000 in property damage and equipment loss; paid rent and CAM expenses, including $25,000 after she left her space; reputational harm and lost profits. Drip was projected to earn $1.2 million annually.
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