- 21 -
consideration for the improvements made. At that point
in time, with the exception of the 6 months rent
credit, the lessor realized the full benefit of the
improvements, while the petitioners realized none.
After Michael testified that he could not “get a competitive
bid” for the Improvements because of the lack of a local
contractor who could do the work, he testified:
And it was important for us in the business to be
established before the Christmas rush, so we agreed to
go ahead and pay the amount over and above, knowing
that we were only going to get consideration for the
total of the $18,000 in rent credit.
The additional amount, the additional $92,000, we
just assumed that that was cost of obtaining the site
and possessing the retail space.
The above-quoted portions of petitioners’ opening and
answering briefs and Michael’s testimony show that petitioners
did not intend to treat the entire cost of the Improvements as a
rent substitute. The only consideration for the Improvements, in
petitioners’ own words, was a “credit equal to 6 months rent”.
Moreover, petitioners’ statement on brief that they “commenced
paying full rent, with no additional consideration for the
improvements made” (emphasis added) after the 6-month rent
holiday ended undercuts any contention that the cost of the
Improvements reduced their monthly rent obligations under the
Lease after the rent holiday. Based on the foregoing, we
conclude that petitioners did not intend to treat as a substitute
for rent the cost of the Improvements beyond the $18,739 as
stipulated.
Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 NextLast modified: May 25, 2011