By Alan J. Keays
RUTLAND — The closing of a store that occupies a large space at the Diamond Run Mall in Rutland Town will likely delay when Rutland City receives impact fees from the shopping center it believes it is owed.
LaFlamme’s Furniture Mall has advertised it is closing its location in what used to be the J.C. Penney store.
The city’s agreement for $100,000 in annual impact fees from the mall allows for that fee to be reduced if an anchor store closes, based on the square footage of each particular closed anchor store.
Since J.C. Penney closed a little more than two years ago, and LaFlamme’s opened in that space a few months after, the mall and the city have been at odds over whether the furniture store qualifies as an anchor store.
“This has been an ongoing sort of issue,” City Treasurer Wendy Wilton said Monday, Aug. 7. “Now that LaFlamme’s is gone, the fact is, it doesn’t change anything because they haven’t paid us for that space, even though we think we should get paid.”
However, even if the mall owners aren’t paying what the city believes they should for a particular year, the agreement states that when the last payment is due in 2022 they must make up for any previously reduced amounts.
“They still owe us the same amount in the end,” Wilton said, “but it gets tacked onto the end of the agreement.”
Wilton wrote an email to city officials explaining the situation after getting questions. “The fact is that we have not yet received any impact fees for LaFlamme’s since JCPenney left,” Wilton wrote.
“We have billed them for this space, but they have refused to pay it despite that the Zamias agreement stipulates that the amount would have been due because LaFlamme’s appears to qualify as an anchor tenant under the 1999 agreement.”
The city refers to the fund where the money goes as the Zamias fund, named for the mall’s developer, Damian Zamias.
In November, then-City Attorney Charles Romeo wrote a letter to mall officials making the argument that LaFlamme’s qualified as an anchor store. However, mall officials were apparently not swayed and did not include money for that space in their most recent payment to the city.
“My understanding of the agreement is that Zamias owes the City the full impact fee of $2,063,079 (less payments made) at the end of the agreement, even if anchor stores have vacated,” Wilton’s email Monday to city officials stated.
Romeo sent his letter to Zamias Services Inc. of Johnstown, Pennsylvania. Attempts to contact Zamias Services Inc. on Monday for comment were not successful.
The impact fees from the mall to the city, totaling more than $2 million over the life of the contract, are meant to offset the negative effects of the shopping center on Rutland’s downtown.
The past two annual impact fee payments the city has received each totaled $44,828, which is far less than the $100,000 expected, according to city records.
That reduced payment appears to reflect two closed anchor stores, Sears and J.C. Penney, at the mall. The third anchor store location is leased by Kmart, which is open for business.
Christopher LaFlamme, owner of LaFlamme’s Furniture Mall, could not be reached Monday for comment.
He told the Rutland Herald that the “Going Out of Business” sale at the present mall location could last a few weeks, and he has been in negotiation with mall officials for another space at the shopping center that could be a better fit.
The city has used Zamias funds over the years to pay for various downtown improvement projects.
Those projects have ranged from upgrades to sidewalks to closing a more than $200,000 funding gap in a nearly $1 million project now underway to turn the dilapidated Center Street Alley into a marketplace.