According to The Global and Mail, Apple is threatening to end its lease agreement with Mizrahi Developments to construct a flagship retail store in Sam Mizrahi’s new retail and condo project in downtown Tronto, Canada. Mizrahi is constructing Canada’s tallest 85-story residential skyscraper “The One” at Yonge and Bloor streets which includes space for Apple’s signature glass and wood flagship store.
Apple and Mizrahi Developement lock horns over the construction of new flagship store at “The One” in downtown Toronto, Canada
According to the report, an Apple retail store on the ground floor of the under-construction “The One” would have served been the selling point of the new skyscraper because “Apple stores are magnets for consumers and would have attracted throngs of people to the building and the neighborhood.”
However, the COVID-19 pandemic led to construction delays and now when the tech giant wants to exit its agreement, Mizrahi Development is seeking a court order to stop it from leaving.
Mizrahi said it exercised its right to delay the delivery of the space because of events out of its control, such as the pandemic and the plumber’s strike. In December, 2020, it told Apple that it would push out the delivery of the space to Oct. 31, 2021. Apple responded by saying it would exercise its rights to terminate the lease and provided a list of items it thought Mizrahi could not deliver.
In its court filing, the developer states that the new building is tailored around Apple’s,15,000 square feet plus, store with thirty-four glass panels. Furthermore, it also accuses Apple of looking for more concessions by threatening to leave.
Apple’s “position flies in the face of the commercial and practical realities of the construction process for a project,” such as The One, Mizrahi’s court filing said. The developer accused Apple of threatening an unlawful termination to extract more concessions. Mizrahi said the entire building has been designed and built to be specifically tailored to Apple’s store.
The tech company’s lease was for more than 15,000 square feet, including more than 9,000 square feet on the ground floor. As part of the agreement, Mizrahi agreed to pay Apple’s architect to cover the cost of designing the store, which as of mid-October amounted to $6.24-million, Mizrahi said in its court submissions.
The tech giant recently opened Apple Yas Mall in Abu Dhabi, UAE at a prime location. It is likely that the tech giant threatening to leave to create pressure on the developer to deliver on time. Having said that, Mizrahi says that even if the tech company pulls out of the agreement, it wil be able to find a tenant easily as “the location is prime real estate.”