Pet Store Gulf Coast Town Center
With her electric bill regularly exceeding $500 per month, Adrian Church spent thousands of dollars on high-efficiency light bulbs and appliances at her Gulf Coast Town Center salon, hoping to cut costs.
Still, Church's bill didn't go down. And now, she suspects a reason: the former owners of Gulf Coast Town Center were overcharging her.
"CBL knew it was much bigger, and much better financed, than the thousands of small business owners who rented mall spaces from it, " Church's lawyers wrote in their complaint. "In exploiting this inequality, CBL used its vast resources and superior negotiating and bargaining power to actively victimize and defraud its tenants — simply to reap unfair, improper and illegal profits."
Stacey Keating, a spokeswoman for CBL & Associates, said the company "cannot comment on pending litigation." The company, based in Chattanooga, Tennessee, owns interests in about 130 malls, office buildings and other centers. It reported about $1.05 billion in revenues in 2015.
Efforts to reach Church and her Bonita Springs-based lawyer, Benjamin Yormak, were unsuccessful this week.
Church's lawyers say the excess charges became apparent in late 2015, when Wells Fargo filed a foreclosure action against CBL & Associates Properties on an unpaid loan of $190.9 million.
A receiver, McKinley Inc., took over management of the complex and started to review energy charges. In a January letter attached to the lawsuit, an assistant property manager for McKinley said a "usage evaluation completed on the property" would result in Salon Church's energy bill being reduced from $615 per month to $270 per month.
"Sometimes, CBL's fraudulent and illegal markups exceeded 100 percent of the tenant's actual electricity usage charges, " Church's lawyers wrote.
Church's lawyers are seeking a class-action status, claiming "hundreds, if not thousands" of CBL & Associates Properties tenants across Florida might have been overcharged. The lawsuit doesn't list any evidence that the issue is widespread, though court records show at least one other Gulf Coast Town Center tenant, Golf Galaxy, is contesting its energy bill.
In a January receiver report, McKinley officials wrote that the company's management "is continuing to research the electrical and water/sewer charges for Golf Galaxy" for the last five years. Golf Galaxy's representatives claim they have been overcharged by about $200, 000 during that time, according to the report.
A representative for Dick's Sporting Goods, which owns Golf Galaxy, didn't respond to a request for comment.
Lawyers for Church say CBL & Associates directly billed tenants for electricity, pledging to charge no more than the tenants would have paid if they bought power directly from the utility. In the contracts, tenants waived their right to an energy audit, making it difficult for them to know their true costs.
But at least one tenant, Jack Battaglia, said he's had no issues with his power bill at Gulf Coast Town Center. Battaglia, who opened the clothing store Giacomo Battaglia for Men about four years ago, said his utility costs appeared to be "perfectly fair."
"As far as any overcharges, I haven't heard, " Battaglia said. "I'm really happy with the development, to be perfectly frank with you. I think we have some new blood in here as far as owners, and they're really cleaning it up."
The foreclosure action against CBL & Associates Properties is still pending. In a February filing with the U.S. Securities and Exchange Commission, CBL & Associates Properties officials wrote that Gulf Coast Town Center "generates insufficient cash flow to cover the debt service on the mortgage."