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Charlotte Amalie
Thursday, May 23, 2024
HomeNewsLocal newsLandlord Seeks to Evict V.I. Daily News in Ongoing Property Dispute

Landlord Seeks to Evict V.I. Daily News in Ongoing Property Dispute

The landlord of the Virgin Islands Daily News has filed a complaint in V.I. Superior Court seeking to evict the newspaper from its St. Thomas office, claiming the business hasn’t paid the rent since last May, and prior to that had arbitrarily reduced the amount it was paying.

The case appears linked to an ongoing property dispute between the Daily News Publishing Company and its president Archie Nahigian Jr., and the company he purchased the paper from in 2014.

According to the complaint, the Daily News Publishing Company entered a triple net lease agreement with the Daily News Holding Company, located in Scranton, Pennsylvania, on Feb. 25, 2020, agreeing to pay $270,000 over the 18-month term of the contract, or $22,500 per month. When the lease expired on Aug. 1, 2021, it continued to occupy the building in Estate Thomas and to pay rent, “thus converting the Lease into a month-to-month tenancy,” it says.

Thereafter, the paper began to reduce the amount it paid, according to the complaint. “On March 1, 2022, Tenant again arbitrarily began to reduce its rental payment to Landlord but still fully occupied the Property,” it says. Then, on May 31, 2023, the paper “ceased making any rent payment at all.”

According to the complaint, on Jan. 31 the holding company served the newspaper with a Notice of Termination and Notice to Quit the Premises by midnight on March 1, which was hand-delivered on Feb. 1. Besides offices and conference rooms, the building also houses the paper’s printing press. With the closure of the St. Croix Avis at the beginning of this year, the Virgin Islands Daily News serves as the territory’s only print newspaper.

“As of April 3, 2024, the date of the filing of this Complaint, Tenant has failed to vacate the Property as required and remains in possession of the Property despite the Lease Agreement having been terminated and thus, Tenant remains in unlawful possession of the Property without the Landlord’s permission,” the filing states.

The Daily News has not yet responded to the complaint, according to publicly available court records. However, a separate filing by the Scranton-based holding company in July 2022 shows the two have been in a dispute for years regarding an option for Nahigian to purchase a 30 percent tenant in common interest in the property for $675,000 that was tied to his option to buy the entire property under a 2014 lease agreement.

According to filings in that case, Nahigian sought the tenant in common interest deal in 2016 to legally offset capital gains taxes on a rental property he had sold in Washington, D.C., in what is known under federal tax law as a 1031 exchange.

However, the Daily News Holding Company alleges in its complaint that the deal was never closed and that no funds were paid, while Nahigian claims in his response and counterclaim that the closing occurred in April 2016 with a purchase contract, a balloon note and a warranty deed fully executed.

“At the request of DNHC, Nahigian agreed to refrain from recording the Warranty Deed because Nahigian understood that doing so could complicate DNHC’s financing,” according to his filing opposing the holding company’s motion for a preliminary injunction to allow it to sell the property to a third party. “Nahigian was not concerned about delay in recording because he had a course of dealings with this family-owned company, the parties trusted each other and DNHC recognized that Nahigian owned a 30 percent tenant in common interest in the Parcels.”

The holding company contends that “[b]esides not fulfilling any of his payment obligations to acquire the 30 percent interest in the Property, Nahigian decided not to have his company, Daily News Publishing Co., Inc. exercise the option given in his 2014 Lease to purchase the entire Property for $2,250,000 plus one half of any remaining rental payments. The last date for exercising the Option was September 30, 2018, and it expired on that date,” according to the complaint.

However, in early 2021, both parties began discussing a possible sale of the entire property to Nahigian or a company he controlled, but as “discussions progressed over the summer and fall, it became clear that Nahigian was not able or willing to buy the entire Property, but instead wanted only to buy a 30 percent interest in the Property,” tendering a check for $675,000 in February 2022 that was rejected as too late and too little, the complaint states.

“The attempted tardy tender did not include the 1.5 percent per month late charges that are imposed by the 2016 Contract, and which totaled nearly $300,000,” according to a September 2022 motion to dismiss Nahigian’s counterclaims. “Morever, DNHC unequivocally rejected the late and monetarily inadequate tender attempt.”

Nahigian has countered that the $675,000 check, while never cashed, was never returned, and that in March 2022, the newspaper began allocating rent to reflect the 70-30 percent ownership interest in the property. He has also demanded the return of $50,000 he said he paid in April 2021 as a deposit for the property.

The dispute has prevented the holding company from selling the property to another buyer due to liens placed by Nahigian, according to the filings.

On June 1, 2022, the holding company signed a contract to sell the property to Errol Baker for $1,950,000, according to the complaint. However, five days later Nahigian recorded four Notices of Interest with the St. Thomas Recorder of Deeds against the two parcels that comprise the property, asserting that he has an interest as purchaser by virtue of the 2016 contract.

In response, on July 29, 2022, the holding company filed a motion for a preliminary injunction to expunge the Notices of Interest to allow the sale to proceed, or for an emergency motion to allow the sale, which Nahigian has opposed, countering that “DNHC cannot legally sell 100 percent of the Parcels without the consent of VIDN, its tenant in common.” He also alleges that the holding company owes his company a share of the insurance proceeds it received following the 2017 hurricanes Irma and Maria, which he says caused considerable damage to the building that has not been remedied.

DNHS contends that Nahigian “is currently a holdover tenant in default of its payment obligations under a lease that expired last year. Nahigian was unwilling or unable to buy Plaintiff’s Property, and he does not want anybody else to buy it. Nahigian refused to have his corporation pay even the rents due under the expired lease with Plaintiff, and he has refused requests to enter a new lease. The Notices of Interest are nothing more than a ploy to keep him on the Property as a holdover tenant paying whatever rent he feel [sic] like paying.”

The court has not yet ruled on the various claims, counterclaims and motions to dismiss, or set a schedule for hearings or discovery in the matter.

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