Court Opinion

ID: 5072680
Source: CourtListenerOpinion
Date Created: 2021-10-01 10:53:00.96792+00
Date Added: 2024-06-11T08:19:53.818486
License: Public Domain

DOWD, Judge,
dissenting.
I respectfully dissent.
*82The real issue presented by this case is whether an assignment tenant may destroy a parking garage located on the leased premises costing $306,000 to build in the 1950s and grossing a yearly income exceeding $400,000 and construct in its place a nonrevenue producing open park area complete with sunken amphitheater and adjacent reflecting pool with fountain, thus requiring the landlord to expend considerable sums to restore the property to a commercial use upon termination of the lease term.
I would hold the City has breached the lease by removing the landlord’s reversion-ary interest in the parking garage and constructing a public park in its place. Further, the lease agreement does not constitute a license in writing to commit waste in accordance with Missouri’s anti-waste statute. Even if the lease could be so construed, however, the assignment tenant City of St. Louis’ (hereinafter City) actions would still amount to equitable waste.
The subject property is the proposed westward extension of Kiener Plaza in the Gateway Mall1 area of downtown St. Louis. The lease for the property was executed on April 15, 1953 by two commercial parties, landlord Southern Real Estate and Financial Company (hereinafter Southern) and tenant Wayco Petroleum Company (hereinafter Wayco), a well-known operator of parking garages. The lease property comprises a prime tract of downtown St. Louis commercial real estate bounded on the north by Chestnut Street, on the south by Market Street, on the east by Sixth Street, and on the west by Seventh Street.
The initial term of the lease was to run twenty-five years and six months with an expiration date of October 31, 1978. Tenant was given an option to renew the lease for three twenty-five year terms on the condition that tenant construct improvements to the property during the initial term of no less than $150,000 exclusive of resurfacing. The lease required the landlord to remove an existing parking garage located on the premises and provide tenant with a level lot ready for building. This provision created a land lease unless and until tenant constructed improvements during the original term. A yearly rental of $50,000, without escalation, was provided for the duration of the original term. Upon expiration of the lease, all improvements made to the property were to revert to landlord Southern. The reversionary interest in the improvements was consideration in addition to rent during the extended term(s) of the lease.
Immediately following execution of the lease, Wayco assigned its interest as tenant to May Department Stores Company (hereinafter May). Prior to 1955, May constructed an underground parking garage with surface parking on the property at a cost of $306,000. On April 4, 1978, May notified Southern of its intention to exercise the first lease renewal term to continue through October 31, 2003, and presented documentation that it had exceeded the requisite dollar figure for improvements.
In August 1982, May donated its lease interest to the City of St. Louis. May valued the gift at five million dollars. It took a tax deduction in that amount as a result of the donation. For over thirty years following the execution of the original lease the premises remained in operation as a parking garage and the City continued to operate the garage, which grossed an annual revenue in excess of $400,000. This terminated when City destroyed the garage in March 1986.
Plans for the destruction of the leasehold improvement formed in October 1982, when the City entered into a written agreement with Pride Redevelopment Corporation (hereinafter Pride), the redeveloper of the Gateway Mall area under the plan, whereby the City agreed to cooperate with Pride in converting the subject property to an open space consistent with Kiener Plaza to the east. Pride in turn, entered into a “Parcel Development Agreement” with Gateway Mall Associates One, owner of the property immediately west of the leased premises, whereby Pride committed itself *83to develop the subject property as a publicly accessible open park space.
Landlord Southern, after hearing reports of the proposed use of the property and objecting to the destruction of the existing parking garage, proposed that the City join Southern in seeking declaratory judgment interpreting the lease. The City refused. Thereafter Southern brought suit seeking declaratory judgment interpreting the lease and an injunction to prohibit demolition of the garage. Southern also sought a temporary restraining order to prevent the City from demolishing the garage. The trial court denied Southern’s request for a temporary restraining order and set trial on the merits for March 27, 1986. Two days before the date set for trial, the City, in a strategic attempt to deny Southern any functional relief from a favorable ruling on the merits, demolished the underground parking garage. Southern responded by sending to City notice of termination of the lease.
Finding its suit to be moot, Southern dismissed its action without prejudice. Thereafter, Southern filed an unlawful de-tainer action against the City to recover possession of the property. The City counterclaimed for declaratory judgment interpreting the lease. The trial court entered judgment for the City declaring the lease in full force and effect. It also found the lease gave the City as tenant the right to remove the garage and erect other “improvements” in its place. The court determined Southern’s reversionary interest was limited to the new “improvements,” a non-revenue producing open park area with reflecting pool and sunken amphitheater.
The trial court erred as a matter of law in determining the public park area was an “improvement” within the terms of the lease. The City breached the lease by removing Southern’s reversionary interest in the parking garage and by constructing a public park in its place. By removing the parking garage and-constructing a public park, the City has denied Southern the benefit of the additional consideration necessary for extension of the lease.
All parties agreed at oral argument that the lease is clear and unambiguous. It is the duty of the court to interpret an unambiguous contract. Thurman v. K.L. Koenig Realty Co., 423 S.W.2d 196, 200 (Mo.App.1967); Adzick v. Chulick, 512 S.W.2d 194, 197 (Mo.App.1974). The cardinal rule of interpretation of a contract is to ascertain the intent of-the parties and to give effect to that intention. Id. In that regard, the intention of the parties must be determined at the time the contract was executed, Schwartz v. Continental Casualty Co., 705 S.W.2d 494, 497 (Mo.App.1985); Reddi-Wip v. Lemay Valve Co., 354 S.W.2d 913, 920 (Mo.App.1962), and must be derived from the instrument as a whole. Laiben v. Department of Revenue, 572 S.W.2d 173, 177 (Mo. banc 1978).
Where a lower court rules on a question of law it is not a matter of discretion. Questions of law are reserved for the independent judgment of the reviewing court. City of Cabool v. Missouri State Board of Mediation, 689 S.W.2d 51, 54 (Mo. banc 1985). We are not bound by a trial court’s conclusions as to legal effects of a finding. Kelly v. Maxwell, 628 S.W.2d 931, 934 (Mo.App.1982).
Accordingly, the trial court’s interpretation of the lease, particularly the meaning of the term “improvement,” as used by two commercial, profit making companies is a matter of law and is not entitled to deference. The trial court’s finding that the park has revenue-producing potential and therefore is an improvement is not binding on us as a reviewing court. To the contrary, the trial court’s determination is in conflict with the terms of the lease and erroneously declares and applies the law, mandating reversal. Murphy v. Carron, 536 S.W.2d 30 (Mo. banc 1976). It ignores the fact that the original parties to the lease were profit-making corporations. They used the term “improvements” and it is their meaning of that term which the trial court, and this court, must determine.
In interpreting the terms of the lease, then, we must gather the intent of the original parties to the lease, Wayco and Southern, from a consideration of the in*84strument as a whole. The terms of the original land lease conditioned extension of the lease beyond the original twenty-five years and six months term on the tenant erecting “improvements” on the premises at a cost of at least $150,000 exclusive of resurfacing. Our Supreme Court has defined the term “improvement” as: “A permanent addition to or betterment of real property that enhances its capital value and that involves the expenditure of labor or money and is designed to make the property more useful or valuable as distinguished from ordinary repairs.” State v. Neill, 397 S.W.2d 666, 669 (Mo. banc 1966).
As the parties have agreed that the lease is unambiguous, to be an “improvement,” the construction must be a betterment to both parties. The tenant is not free to interpret the term “improvement” by itself. The construction of the parking garage was an improvement to both parties to the lease as evidenced by the option term of the lease being exercised. The evidence may support an irrelevant finding that the City believes a park is an improvement but it will not support a finding that either of the original parties intended a park to be a betterment when compared to a parking garage in the middle of downtown St. Louis. The construction of the park may be an improvement for the City or any of its citizens. It cannot be an “improvement” to Wayco or to Southern. Neither are now in the business of managing a park. They never were in that activity. The majority opinion fails to reach and decide the real legal issue, to wit, can the park be an “improvement” to the reversion-ary interest?
The consideration for the lease was $50,-000 per year for the first term of the lease. For the renewal terms of the lease the consideration was $50,000 per year plus the reversionary interest in the improvements with a minimum value of $150,000. The lease when viewed as a whole supports that the reversionary interest in the improvements provided the additional consideration for extension of the lease term. City’s donor, May Department Stores Co., valued its gift of the leasehold, including the garage at $5,000,000.00. Once improvements are made, certain aspects of the lease are triggered which protect the reversion. The tenant is required to pay taxes on the improvements in order to protect the landlord from liens; the tenant is required to insure the improvements and in event of casualty is required to apply the full proceeds to restoration of the improvements; and, the tenant has the duty to maintain the improvements. It is clear from the terms of the lease that Southern was to acquire a reversionary interest in the improvements during the extension term and that the improvements constitute additional consideration for extension of the lease. The fixed rental for 100 years makes no sense unless the value of the improvements remains on the premises.
It is also clear from the terms of the lease that the tenant was not free to remove improvements, as that term was used by the parties, during the extension term without replacing the improvements. The default provision allowed for forfeiture in the event of failure to pay rent or failure to comply with the covenants of the lease, such as insuring the premises, paying taxes, etc.
As forfeiture can occur at any given time under the lease, the landlord is entitled to have the improvements on the leasehold at all times to protect the reversionary interest. If the tenant was free to remove all improvements at any time during the extensions without replacement, a number of the lease provisions are nullified: (1) The provision that all improvements, exclusive of trade fixtures, belong to the landlord upon termination of the lease; (2) The provisions requiring tenant to maintain and insure the improvements; (3) The provision requiring tenant to pay taxes on the improvements and landlord to pay taxes on the land. The majority opinion nullifies these provisions and denies Southern of the benefit of its bargain.
It must then be determined whether the park constructed in place of the garage comprised an “improvement” under the terms of the lease. In making that determination, consideration must be given to the fact that the original parties under the *85lease, Wayco and Southern, are commercial, for-profit Missouri Corporations. In addition, the leasehold is a fraction of a city block in the downtown business district which is zoned commercial. It is irrelevant that the lease was not labelled a commercial lease. Substance, rather than form, controls the interpretation of a contract. 17A C.J.S. Contracts, § 294e (1963). The majority opinion ignores the nature of the parties, but, as we have shown the nature of the original parties cannot be ignored when interpreting their language.
In accordance with our Supreme Court’s definition of the term, an improvement must be a betterment that enhances the capital value of the realty. It logically follows then that an improvement cannot be an expense to the landlord. Moreover, in determining whether an addition to the leasehold is an improvement under the lease, the present value is relative in determining whether the landlord’s reversionary interest is protected in case of forfeiture.
The present use of the property as a public park, even if it has some commercial potential as a park, is not equivalent to the leasehold improvement present when the term of the lease was extended. In all likelihood, the substitution of a revenue-generating parking garage as a leasehold improvement for a nonrevenue producing park has created an expense for Southern at the end of the lease terms. The measure of the expense would be the cost of removing the park construction. The May Department Stores Company donated to the City a lease interest with a value of $5,000,000.00 (an undisputed fact). Southern has been denied the benefit of that value in exchange for a mere possibility of some income potential from a public park. In the absence of proof that Southern is empowered to operate a park any finding that the park could have a commercial use is meaningless. There was no such evidence. A public park may be a betterment to the City, however, a reversionary interest in a fraction of a public park, no matter its cost or whether its use is lawful, is not a betterment to a Chapter 351 for-profit corporation. Moreover, the City was not a party to the lease and its definition of improvement is irrelevant to the task of interpretation.
Southern has been denied the benefit of the additional consideration for extension of the lease. The trial court clearly erred in determining the public park constructed by the City is an improvement. The evidence wholly fails to support the finding. By affirming the judgment of the trial court, the majority has created an exception to established landlord-tenant law for municipal tenants.
Additionally, I strongly disagree with the majority’s holding that the lease authorizes destruction of the garage (without a complete replacement) and constitutes a special license in writing to commit waste, a defense to Missouri’s anti-waste statute § 537.420, RSMo 1986.
In the absence of a contrary provision in a lease, title to a building erected by a tenant on a landlord’s premises vests on its erection in the landlord. Century Electric Co. v. Terminal Railroad Assn, of St. Louis, 426 S.W.2d 58, 61 (Mo.1968). The fact that the lease expressly provides that title to the building is to vest in the landlord upon termination of the lease does not effect the landlord’s interest in the building and his right to prevent its removal from the premises the instant it is erected. Mercantile-Commerce Bank & Trust Co. v. Mid-City Realty Co., 348 Mo. 1006, 156 S.W.2d 730, 736 (Mo.1941). In our case, the removal without replacement with an equally valuable improvement was not authorized by the lease. Removal, without replacement, is not a license to commit waste. This rule is reinforced by the provisions in the lease: (1) extension conditioned on improvements of a minimum value; (2) maintenance; (3) insurance to at least 80% of value; (4) insurance proceeds to be used only to restore improvement; (5) etc. These provisions totally rebut any claim of unlimited license to commit waste.
The removal or destruction of buildings constituting a part of the real estate, as distinguished from buildings which belong to the tenant and remain his personal prop*86erty, is an injury to the reversionary right of the landlord for which the tenant is liable unless a lease provision permits such conduct. 49 Am.Jur.2d Landlord and Tenant § 250 (1970); see also, Lustig v. U.M.C. Industries, 637 S.W.2d 55, 59 (Mo.App.1982) (voluntary waste consists of a direct injury to the property “such as pulling down a structure”). It becomes a question of construction whether the removal or destruction is authorized by the lease. 49 Am.Jur.2d Landlord and Tenant § 251 (1970).
Missouri’s anti-waste statute, § 537.420, RSMo 1986, provides:
If any tenant, for life or years, shall commit waste during his estate or term, of anything belonging to the tenement so held, without special license in writing so to do, he shall be subject to a civil action for such waste, and shall lose the thing wasted and pay treble the amount at which the waste shall be assessed,
(emphasis added). The phrase usually employed to confer a special license in writing to commit waste is “without impeachment for waste.” 93 C.J.S. Waste § 1 (1956); 78 Am.Jur.2d Waste § 6 (1975). No particular form of words is necessary, however, to make an estate without impeachment for waste so long as “a license to do the acts” is clearly given. 93 C.J.S. Waste § 1 (1956). Removal, where replacement is required, does not satisfy the statutory “special license” requirement. The lease does not contain any language authorizing voluntary waste.
The majority opinion relies principally on two provisions of the lease in asserting the City was authorized to destroy the garage. The first appears under the heading “Construction of New Buildings” and provides the tenant shall have the right to erect improvements on the premises during the term of the lease. The second provision appears under the heading “Option to Extend” and after obligating tenant to insure the improvements against casualty, to restore improvements upon casualty, and to maintain and repair the improvements, the provision further states that tenant may “reconstruct, alter or replace any improvements then existing in such a manner as Lessee shall desire.” (emphasis added). The majority has selected “replace” as the operative word. The use of the word “reconstruct” and the word “alter” suggests the meaning of the word “replace” as used by the parties. When taken in the context of the terms of the lease then, the majority’s interpretation of the meaning of “replace” is inappropriate.
Further evidence of the majority’s strained meaning of the term is gathered by their use of the secondary dictionary definition of “replace” as a “substitute or successor; to put something new in the place of.” Under the preferred definition, the construction of a public park does not replace a parking garage since the preferred definition of “replace” is: “1. to place again: restore to a former place, position, or condition.” Webster’s Third New International Dictionary 1925 (1976). Likewise, the majority opinion fails to mention Black’s definition of the term: “To place again, to restore to a former condition.” Black’s Law Dictionary 1168 (5th ed. 1979). It is clear that the construction of a public park does not restore the leasehold to its former commercial use by a commercial lessee. It is equally clear and certain that a park in exchange for a profitable garage structure was not an “improvement” as they used that term.
Nowhere within the lease is there language constituting a special license to destroy the parking garage if a comparable structure is not built. The lessee must replace an “improvement” with an “improvement” as that term was repeatedly used. The lessee’s election lies with the manner of rehabilitation, not what type of improvement shall be built. The provisions granting a right to make improvements do not simultaneously confer a right to destroy. The garage was underground so that improvements in the form of new buildings could be constructed at the surface level without destruction of the garage. The tenant’s right to “reconstruct, alter or replace any improvements” was couched in repair language and likewise does not grant a right of demolition without replacement.
*87A review of the lease as a whole demonstrates the City was not entitled to destroy the parking garage. One section of the lease is specifically entitled “Wrecking and Demolition” and gives the right to “wreck, demolish and remove all present buildings” to the landlord only and refers to the landlord’s obligation to remove the structure existing at the time the lease was executed and provide the tenant with a level lot. Had the parties intended the tenant to have the same right they would have used equivalent language to confer such a right. Instead, the lease authorizes, indeed it requires, only a one-time demolition and removal of present buildings by the landlord at commencement of the lease.
Further, the right to extend the lease to a potential 100 year term was contingent on the tenant making improvements to the property at a value of at least $150,000 excluding resurfacing, thereby enhancing the landlord’s reversionary interest in exchange for the long lease term. The majority opinion contends the contingency clause was for the benefit of the tenant so that the tenant would be assured it could have use of any costly improvements for an additional seventy-five year term. That may be true. It does not exclude the equally valid purpose of the lessor to protect its additional consideration for the long term lease. If protection of the reversion-ary interest was not the prime concern, however, it is unlikely that the rental would have been capped at $50,000 annually for the duration of the lease. Rather, the lease would have provided for escalation of rent upon renewal.2 It is equally, if not more likely that the construction contingency was related to length of extension as a protection to both lessor and lessee.
Moreover, the lease obligates the tenant to repair and maintain the premises, insure the premises, and restore the premises in the event of casualty. A review of the lease as a whole does not disclose authorization for the City to destroy the parking garage. It strains logic to interpret the lease so that lessee was licensed to tear down and not replace the improvement where it was obligated to insure and replace the improvement if it was destroyed by a casualty.
Secondly, it would constitute waste for the City to convert the leased premises into an open park area. Waste includes the material alteration of a tenement by a tenant that “tends to destroy or lessen the value of the inheritance, or to destroy the identity of the property.” 78 Am.Jur.2d Waste § 1 (1975).
Southern’s reversionary interest in a parking garage with a yearly income of $400,000 has been substituted with a non-revenue producing open park area. Upon termination of the lease Southern would be required to expend considerable sums to restore the property to a commercial use. The City failed to offer any evidence to support a finding that Southern could realize any income from a park.
The majority concludes that the proposed open park area is authorized by the lease in that the lease allows the tenant to make improvements “in such form, size and character, at such cost and for such uses and purposes as Lessee shall determine,” the only restriction being that the improvements be of lawful use. This view wholly ignores the requirement that the new structure be an improvement as that term was used by the parties to the lease.
As discussed previously, only a tortured interpretation would consider the public park an improvement as viewed by lessor. This view surely ignores the agreed requirement of “improvement” to the real estate. It excuses the lessee from maintaining an improvement as viewed by lessor. Furthermore, even where the terms of a lease provide that use of the premises is subject only to a “lawful use,” a tenant still may not make a radical change in use, from the use originally contemplated, that is harmful to the reversion. Knowles v. Moore, 622 S.W.2d 803 (Mo.App.1981); Ritchie v. State Board of Agriculture, 219 *88Mo.App. 90, 266 S.W. 492 (1924). In Ritchie, the Kansas City Court of Appeals discussed the effect of the decision of the Supreme Court in Moore v. Guardian Trust Co., 173 Mo. 218, 73 S.W. 143 (1903), on the case before it. The court noted that in Moore there were no restrictions of use placed on a tenant in a lease for an office building. The court noted, however, that if the tenant attempted to use the building “for a factory, a garage, or a hospital for contagious diseases, of course, no court would have held that the lease would permit any such use of the building.” Ritchie, supra, 266 S.W. at 495. Likewise, in Knowles, the Court of Appeals for the Southern District held that a leasehold previously used to raise prairie hay could not be cultivated for crops even though the lease made reference to the tenant being in the farming business. The court held that the fact that the parties knew the premises were going to be used for farming did not establish that any kind of farming was authorized and would not be permitted where unsuited to the land and prejudicial to the fee holder. Knowles, supra, 622 S.W.2d at 805. Even in a lawful use, the tenant is limited by the prohibition against acts harmful to the landlord’s reversion.
The lease, when examined as a whole, clearly indicates that the intention of the parties was to confine the use of the premises to a commercial context. Only within a commercial context, does the lease authorize any lawful use.
The original parties to the lease were both commercial parties. Tenant was a well known operator of parking garages. Prior to execution of the lease, a parking garage was operated on the property. Following execution of the lease, a parking garage was constructed on the premises and remained in operation for over thirty years. The subject property is located in the downtown business district adjacent to the stadium. The lease specifies that upon expiration of the lease title to all “trade fixtures” is retained by tenant, reinforcing the commercial nature of the lease. Moreover, the lease provides that in the event of condemnation by a government body the lease was to terminate, further indicating a
noncommercial use was not contemplated. By implication this term suggests use of the leased real estate as a public park would not be an “improvement,” and in fact would lead to termination of the lease. The proposed radical change in use of the premises constitutes waste within the meaning of § 537.420, RSMo 1986, and Southern should be freely allowed to declare the lease forfeited.
The failure of the city to comply with § 537.420 is a compelling, additional reason to reverse and remand. Section 441.030 and Section 537.420 express Missouri public policy and are controlling on the issue of waste in a landlord-tenant relationship for a term of years. The former statute entirely proscribes waste in a tenancy of two years or less and the latter permits waste where the tenancy is for two years or more on the condition of a “special license in writing so to do.” The lease does not mention waste. In the absence of language expressly authorizing waste, § 537.420 prohibits waste. The statute further reinforces the prohibition on waste without express license by providing treble damages for waste committed without express license. The majority opinion implies a license to commit waste. Their decision is at odds with the decision in Sparks v. Lead Belt Beer Company, 337 S.W.2d 44, 46 (Mo.1960), where the Supreme Court held a tenant for years “is under an implied agreement to use the premises in a tenant-like manner, and not by his voluntary act unnecessarily to injure them.” The majority opinion permits the city to violate the statute.
Even if the lease can be said to authorize destruction of the parking garage and conversion of the premises to an open park area, the City’s actions still constitute equitable waste. The majority opinion ignores and fails to follow established black-letter law in its assertion that the doctrine of equitable waste is inapplicable because Southern’s rights are governed by the terms of the lease. Equitable waste is specifically intended to apply where a tenant has been granted his estate without impeachment for waste but commits acts *89beyond that contemplated by the parties. 5 American Law of Property § 20.14 (1952); H. McClintock, Handbook of the Principles of Equity § 141 (2d ed. 1948); 4 J. Pomeroy, Equity Jurisprudence and Equitable Remedies § 1348 (2d ed. 1919); 5 R. Powell, The Law of Real Property § 640[5] (1987 rev.); 4 G. Thompson, Commentaries on the Modern Law of Real Property § 1853 (1979).
A tenant without impeachment for waste is liable for acts which amount to “wanton, malicious, or unreasonable destruction of land and structures — that is, for acts which a prudent owner of the fee would not perform ” Id (emphasis added). A prudent owner of the fee would not destroy an income producing structure and convert the leasehold into nonincome producing property.
The conduct of the City during this ordeal deserves mention in determining whether the destruction of the parking garage was “wanton, malicious, or unreasonable.” First, the City has developed a park without the usual and available condemnation for public use. Second, the city became lax in its obligation to maintain the leased premises after receiving May’s rights under the lease as a gift. The property was cited for numerous code violations, notices of which were sent to Southern as fee owner who in turn forwarded the notices to the City. Southern was required to expend considerable effort in seeking compliance by the City, who as tenant had the obligation of repair. Third, the City refused to join with Southern in seeking a judicial determination of whether the City’s proposed use of the leasehold was authorized by the lease. Instead the City demolished the parking garage just two days before trial on the merits.
At the very least, the City has clearly committed equitable waste. The mere fact that the users of the park derive a benefit does not authorize the court to ignore the obligation of the City to compensate Southern for its loss because of equitable waste. The law recognizes several ways for the City to honor its obligations to Southern and build a park on the premises. We do not oppose development of the Gateway Mall Project or urban renewal of downtown St. Louis. Admittedly, the park beautifies the downtown area. It is inherently unfair, however, to expect a commercial corporation to involuntarily subsidize such a project.
The City had alternate means available to accomplish the same goal through use of its condemnation powers, by negotiation with Southern or by simply preserving the underground garage and converting the street level to public open space. The City eventually will be forced to use its condemnation powers to retain the property upon expiration of the lease. Instead, however, Southern has been forced to finance the project through loss of its reversionary interest in the improvements to the leasehold; a reversionary interest valued at five million dollars according to the tax deduction May was able to declare as a result of its donation of the leasehold to the City. The City then pays rent of $50,000.00 per year for the use of real estate valued by sub-lessee May at $5,000,000.00. The City then reduced the premises to bare land. It is unconscionable that Southern has been forced to subsidize the Gateway Mall Project under the guise that the lease may be read to authorize the construction of the park as an improvement. More to the point, Southern will receive annual rent equal to just 1% of the improvement as valued by May. Yet that improvement, which Southern had every expectation of receiving at the end of the lease, and in fact formed consideration for the agreement, was swallowed completely by the City’s destruction of the improvement. In its place is left a park that many may, and indeed do enjoy. But that enjoyment must be tempered by the fact its legal foundation is tainted by misappropriation of the rights of a private party.
For the foregoing reasons, I respectfully dissent. I would reverse and remand for further proceedings consistent with the views expressed.

. The Gateway Mall Area is that tract bounded on the north by Chestnut Street, on the south by Market Street, on the east by Sixth Street, and on the west by Tenth Street.

. Most nonresidential leases provide for escalation of rent. M. Friedman, 1 Friedman on Leases § 5.4 (1st ed. 1978).