The Shopping Center Lawyer

Re-Imagining the Shopping Center Post-COVID: Zoning Changes Needed to Accommodate Store Features No Longer Deemed Convenience Amenities

By: Ted Zangari and Kevin J. Moore

Curbside pick-up lanes and “to-go” parking spaces—already trending in shopping centers before the pandemic—have become essential features of retail stores in the wake of COVID-19 and are likely to become permanent fixtures in shopping centers. Likewise, drive-throughs and walk-up or vestibule kiosks will no longer be limited to banks and pharmacies, as retailers of every type seek to adapt to the new public health normal and avoid risks and exposures to employees and customers alike. How does this sudden shift in shopping center design and layout square with existing zoning laws and municipal codes around the Garden State?

Rent Obligations on Retail Space in the Midst of a Pandemic: A Path Forward for Landlords and Tenants

By: Ted Zangari

Download Rent Obligations on Retail Space in the Midst of a Pandemic A Path Forward for Landlords and Tenants

Going Dark: Land Use Implications of Converting Retail Space to “Dark Stores” for Fulfilling Online Orders

By: Adam J. Faiella

In recent years, retailers have begun to convert unused space in their stores, including the sales floor area, to warehouse and distribution operations for online orders as e-commerce has increased. This trend has accelerated in response to the surge of home deliveries during the COVID-19 pandemic, and many retailers are utilizing even more floor area, and sometimes entire stores, as fulfillment centers. Re-purposing vacant or unused space can aid brick and mortar retailers in competing with pure-play online merchants and help property owners prevent lease defaults and maintain healthy occupancy levels. Municipalities also benefit when the rent roll of a commercial tax ratable of any kind, especially a shopping center, is stabilized. However, retailers and their landlords need to proceed carefully because converting unused retail space to “dark stores” for warehouse and distribution could have land use implications.*

Why Supermarkets Are Building 'Dark Stores'

By: Ted Zangari

Retailers are reportedly creating “dark stores” within their retail premises for use as fulfillment centers—raising a host of interesting questions:  At what point does such activity become a warehouse/distribution use that’s in conflict within local zoning ordinances?  Does such activity violate one or more of the prohibited use (“dirty dozen”) restrictions typically found in shopping center leases?  Will delivery trucks and vans stress the parking lot and internal roadways?  If such activity extends beyond normal shopping center hours, who pays for lighting, security, etc.?  If the tenant has agreed to pay percentage rent to its landlord based on sales made in the store, should goods delivered from the premises be included in sales?

If this was a temporary phenomenon in response to the current pandemic, it wouldn’t be news—what’s newsworthy is that the construction of automated “mini-warehouses” and “micro-fulfillment centers" inside stores appears to be a permanent trend.

> Click here to read "Why supermarkets are building 'dark stores'" from 
CNN Business