The city of Westfield has quietly paid a tenant at the Grand Park Events Center more than $300,000 from the city’s Grand Junction tax increment financing fund to settle a lease disagreement that arose after the tenant was displaced from its space several times.
And a legal agreement indicates the city will need to make a duplicate payment in the near future.
The city made a $312,500 payment on April 30 to NinjaZone LLC, which has operated a fitness academy in a 3,000-square-foot space at the events center for about two years, according to a list of claims—or financial transactions—that will be presented to the city council for approval Monday.
When asked by IBJ about the status of NinjaZone’s lease last week, Westfield confirmed the lease had been terminated but would not provide details about the settlement agreement.
“The City of Westfield and NinjaZone have mutually agreed to separate from a lease agreement at the Grand Park Events Center,” a statement from Westfield spokesperson Vicki Duncan Gardner said. “After thorough conversations, both organizations found the separation in the best interest of all parties. We wish NinjaZone well and hope the business finds success in a new location.”
But a confidential settlement agreement between the Westfield Redevelopment Commission and the company obtained by IBJ shows the city agreed to pay NinjaZone $625,000 to cover the cost of improvements NinjaZone made to the space and the value of the lease.
Gardner confirmed to IBJ that the first payment was made as a result of that agreement, but she wouldn’t confirm whether there would be a second payment, saying she doesn’t have that information. She said the payment was made with TIF funds because the lease was with the Westfield Redevelopment Commission.
In early 2017, NinjaZone signed a five-year lease for the first-floor space in the events center. Per the lease agreement, NinjaZone paid the city $59,780 annually for the space. The city agreed to provide a credit of up to $34,970 over the course of the lease for tenant improvements made to the space.
The city used NinjaZone’s leased space “during a certain period of the year for other events, temporarily displacing NinjaZone from the leased space,” the agreement states.
NinjaZone and the city—which owns and operates the event center—mutually agreed to terminate the lease following disputes about the value of the space during the time the city wishes to use it, according to the agreement.
The agreement doesn’t indicate which events displaced NinjaZone from its space, but several practices during the inaugural Colts Camp at Grand Park last summer were held in the events center because of inclement weather.
Per the settlement agreement, the city said it would make the payment to NinjaZone in two separate payments of $312,500 each.
The settlement agreement—which was signed April 22 by NinjaZone President Casey Wright but had not been signed by city representatives when provided to IBJ—states the first payment was due on or before April 20. The second installment is due within 20 days of NinjaZone vacating the leased space. Per the settlement agreement, NinjaZone is required to move out of the space by June 30.
Wright could not be reached for comment.
In the statement it sent IBJ last week, the city said it was working to identify a “best partner” to move into the Grand Park Events Center.
“Fortunately, there is demand from businesses to be at Grand Park,” the city said.
Tax increment financing is a popular but controversial means for counties, cities and towns to pay for infrastructure intended to promote economic development.