Opinion ID: 2111783
Heading Depth: 1
Heading Rank: 8

Heading: Other Evidence of Benefit to Fee Estate

Text: As we have noted, the leasehold improvements at issue included the pop-out, a permanent structural modification which increased the area of the premises by approximately 15 percent. As Kline described it, [w]e grew the building. This modification was included in CJV's original design of the mall, but was not carried out until 1990 as a part of the project. Thus, the pop-out was of at least some benefit to the fee. Additionally, had the costs of the leasehold improvement construction been paid and lien waivers obtained by GEI as required by the lease, CJV would have become obligated under the lease to pay GEI $112,000 as its contribution toward the work and to loan GEI an additional $100,000. The failure of GEI to pay for the improvements and obtain lien waivers absolved CJV of that contractual obligation but did not prevent the utilization of the improvements in the Graffiti Eatery restaurant while it was situated and operating in the Crossroads Mall. When CJV took possession of the premises after GEI defaulted, it did not permit the subcontractors to enter for the purpose of salvaging materials for which they had not been paid. These facts further demonstrate some benefit to CJV. CJV contends that the extensive remodeling undertaken by its subsequent tenant before opening the Red Robin restaurant on the leased premises demonstrates that it received no benefit from the GEI leasehold agreement. However, the record reflects that the Red Robin remodeling was made pursuant to a contract between Robineb and Lindburg Construction Co., Inc., to which CJV was not a party. The lease to Robineb provides that it accepts the premises in an as is condition, except that CJV agreed to modify one wall at a cost not to exceed $54,000. All other modifications were specified to be at Robineb's sole expense. The lease contains no other provision requiring CJV to contribute to the cost of the leasehold improvements, nor does it provide for a loan in the form of a tenant finish allowance, as did the GEI lease. Thus, CJV realized a benefit in that it has a full-service restaurant operating in the space originally improved by the subcontractors at a cost significantly less than it would have incurred under the GEI lease if the subcontractors had been paid on a timely basis.