GE Equities/Capital Hits Celebration Florida Local Merchant Below The Belt
Irreparable Harm To Disney’s Reputation at the Hands Of GE Equities/Capital
The small town of Celebration, Florida, a quaint front porch community, built by The Walt Disney Company years ago, has its own Rocky Balboa. A small town hardware store owner is fighting back against GE Equities, a huge opponent that will stop at nothing to score a knockout.
At the intersection of US 192 and Celebration Blvd. in Celebration Florida lies a small strip mall known to the residents as Water Tower Plaza. Until March 2010 the plaza was owned and operated by Water Tower Retail LLC, a Division of Unicorp USA. As a result of the economic downturn caused by the financial crisis, the mall was returned to its lender GE Equities in lieu of foreclosure. As you can imagine the local merchants have suffered terribly during this transitional period and most have succumbed to the turbulent times.
However, a few major tenants: Sun Trust Bank, Regions Financial, Joes Crab Shack, just to name a few, remain in business. In the corner of the mall tucked away you will find a small town hardware store known as Water Tower Hardware. Owner James Webster, also known as JD, is a Vietnam war veteran and former mortgage broker for over 30 years. JD needed to make a life change after the financial crisis destroyed the mortgage industry in Florida.
Water Tower Hardware is exactly the type of store you would find in every city, town and village before the days of the giant big box hardware chains. Those chains basically took over the hardware business in the late 1980’s and put the mom and pop stores out of business. Water Tower Hardware has all those great little knick knacks, wine barrels full of great old finds and that old time feeling. The family atmosphere is completed by JD providing free popcorn to all his customers. When you walk into the store there is an old time popper and customers are urged to take a free bag while they stroll the isles.
JD knows most of his customers by name, as well as the products they are interested in. His business prides itself on customer service. People truly appreciate a personal touch. The last few years have been rough on all of us. People are busy, and customers do not want to spend any more time than necessary in a hardware store. JD says with a smile, they come to us and they are in and out in 5 minutes. JD will deliver if the customers ask. He says, “I try to keep everyone happy and I think they all appreciate it”.
Water Tower’s success has attracted the interest of a large hedge fund. DFT Investment Partners, of Greenwich, CT, has decided to back JD in a joint venture to franchise his small town hardware store. JD said it is hard to imagine that such a simple idea has caught the attention of such a major firm.
Just recently JD’s story took what could become a tragic turn. One day while setting up his small garden center and hanging plants out front, a woman approached JD from between the antique style bicycles and the gas grills. She introduced herself as Rachel Slater, a representative from Crossman and Company, the new management company for the landlord. Ms. Slater stated that she would be taking over the management of the mall and that he would have to remove his exterior displays. JD informed her that the exterior displays, mostly beautiful plants hanging in front of the store, are what make the store such an attraction and one of the best selling features of the store. Additionally, he had an agreement with the previous owner permitting the displays. Ms. Slater claimed the town of Celebration was urging her to have the displays removed. She continued to make demands, which have severely hindered this to be successful.
Confused, and unable to survive, JD turned to his future capital partners in Greenwich for help. DFT immediately launched a full investigation into the actions and threats of the new property manager. JD spoke with Celebration officials and they denied that they were in any way involved with the removal of the displays. JD then realized that Crossman and Company, as well as GE wanted to sabotage Water Tower Hardware. JD discovered that another larger tenant was interested in retail space in the mall and JD’s store was blocking that deal. JD confronted the property manager to demand that they take care of their tenants and honor their existing agreements with those tenants. JD then restored his displays in the front of the store.
All the mall leases have exorbitant common area maintenance fees, however the tenants have not received common area services due to the management transition over the past year. Garbage removal, landscaping, shrubbery, proper signage, have all been ignored, yet GE expects their tenants to continue to pay for these services.
JD decided to fight back. As an honest businessman, JD decided to hold back on the maintenance portion of his rent until those services were restored. JD’s rent is approximately $3400 a month with around $1400 going to the common area maintenance. That is an astronomical amount of money for a 2000 square foot store. For those maintenance costs the mall should be spotless. Outraged by JD’s situation, I went to the mall to see its condition for myself. I was stunned to see the disarray. The mall was clearly being neglected. I tried to contact the head of real estate at GE Equities, Mr. John Oliver, but he would not take the call.
In a blatant disregard for fair business practice, JD was served with eviction papers for withholding the maintenance portion of his rent. Crossman assumed that JD would succumb and not be able to survive the legal process. However JD is funded by a huge conglomerate. He has counsel from Greenwich, CT as well as a local attorney, Phillip Bartlett. JD’s legal team believes that the threat and subsequent eviction falls under Title 18 USC, the criminal definition of economic extortion. The apparent misrepresentation from GE constitutes a breach of contract, fraud, torturous interference and a host of other civil acts against a small business owner. I, myself felt the need to support JD and placed a call to DFT’s main offices in Greenwich and spoke to their representative, Mel Taylor. Mr. Taylor said that DFT will support JD and Water Tower Hardware to the end. The thought of evicting a tenant for services not received rather than trying to repair this working relationship, is truly un-American.
Mr. Taylor went onto say that they are making a shallow attempt to cover up their actions but the damage has been done. At first glance the mall is fine, but after being abandoned for over a year it needs more attention than a quick cleanup. JD went on to say, “ We don’t even have a sign on the marquee, it is actually quit laughable.” The plan to franchise Water Tower Hardware is still a go and it is hoped that this situation will not abort the plan.
As for JD, he remains under court protection and his attorneys are preparing a multi-million dollar civil complaint against GE, Crossman and Company, and the individuals who have harmed Water Tower. JD will continue to run the store that supplies the little town that Walt built. Unfortunately, at the hands of GE, Crossman and Company, and their employees, they are destroying what was once the spotless reputation Walt Disney. I interviewed long time resident Linda Payson, who said the store is such a great asset to the community.” For 15 years we have watched stores come and go because the landlord has tried to squeeze every dollar out of the tenants. Well I am just happy JD is fighting them. He has an enormous number of supporters behind him.”
I will continue to follow the story and the trial and will keep everyone posted. Good luck JD and we are behind you.