URGENT: Help Psinergy get their lease honored

We are a small, local business with small, local business values. We have been in business almost 14-years and have worked with thousands of clients over the years. We are a dual sided company. One part of our company offers computer repair for individuals and small businesses, and has received the “Angi Super Service Award” for 10 years as well as being named a Neighborhood Favorite. The holistic health side of our company works with a wide range of people helping to support their health and wellness naturally. The health side has given pro-bono services on a case-by-case basis since the beginning, and so far in 2022 alone has worked on a pro-bono basis with over 51 appointments (averaging 8.5 pro-bono sessions/month).
 
Our business is now in a fight like it’s never been before. The current commercial building we are in has been sold twice in the 2 years we have been in this location. The new owners of the building want use of the entire building, and while originally they said they were OK with tenants like us with many more years left on our lease to finish out our leases, they are making it very hard for us to stay. We still have 3-years plus a 1 year extension left on our lease. Any other place we will move to will be much more expensive currently from what we are finding.
 
At this point, they are not just making it very difficult for us to be able to do business in our space, it is feeling like a constructive eviction. They also aren’t doing this to just us but everyone in our section of the building. We expect these issues to continue until the end of our lease, and it is becoming apparent that the only way to resolve these issues is through litigation, which is costly, especially for a small, local business right after the pandemic (as these new property owners seem to be betting on).
 
While we had preferred not to go after another local business (CORRECTION 6/30: It was brought to our attention from one of our clients that this business is in fact NOT a locally owned business, and is not small... like we were originally told/lead to believe), with their past actions and unwillingness to work with us and uphold the agreements, we likely need to take them to court. This sort of behavior is unacceptable, especially from another local business. So, we are asking for your help.
 
Our needs are:
  • Our lawyer tells us that this type of case costs $5,000 to $10,000/mo and could last 6 to 9-months. So, overall, we are looking at possibly, and likely, needing $90,000+,
  • The first $5,000 is planned for the Initial Retainer for the Lawyer AND covering operating expenses as at times they have essentially forced us to close,
  • After the Initial $5,000 of funds received, we will set aside $15,000 for estimated costs to move, including first month and security deposit (this would also be a safety cushion as we will likely need to use some of the money for operating expenses as SchaOn has had to cancel many client appointments),
  • The next $55,000 would go to a mix of paying off debts that we could then again borrow against if needed, and legal fees.
  • Any remaining funds not used would go to help give us a cushion so we can continue to help our community, hopefully for decades to come,
  • Our hope, at minimum, is to resolve this issue not just for us, but that our lawsuit would also ultimately help the other tenants that are still here.
 
We have just over 1,500 clients on our newsletter list. We are hoping that, at minimum, 900 of you will be able to contribute $100. Even if you cannot contribute $100, if you can contribute a smaller amount and others could contribute a higher amount, that would be much appreciated.
 
Background
On March 28th, the new owners took possession of the property, came to us, and told us that seeing the last 2-years has been tough for small businesses, they would let us out of our lease early, pay moving expenses, and return our security deposit. We responded that actually, we were classified as Essential Workers, stayed open the entire time (even though that was tough many days to be honest), we did grow some, and were not interested really in moving as we really like our space and have a pretty good lease rate… but we would still look around and see what was out there, but the last time we moved it took over 10-months to find an acceptable property that worked for us. We also found out in that conversation that they want the entire building for their multiple businesses and were paying currently $30,000/mo in leases elsewhere. Before they bought this building, every suite in the building was leased, and to make room for one of their businesses, they kicked out tenants that were still on month-to-month leases, some were here for decades. One business was here over 40 years, another 30 years, and yet another 15.
 
Issues started happening right away as they discontinued the cleaning service and our building/common areas/bathrooms weren’t cleaned for 3-weeks, and we tried to work with them to correct this. Then, starting on May 2nd, we reached out to them to coordinate with them on aspects of their construction process to minimize impact to our business, like noise traveling from their area (which was a known issue previously when one of the new tenants had remodeled their space), toxic fumes from the construction like paint and any other chemicals they may use (which was a known issue as a nail salon moved in on the complete opposite side of the building, and those fumes traveled through the entire building until a vent hood was put in), as well as how the mail people/shipments would get into the building so we could get mail/deliveries as the business that had been here for over 40-years and was open from morning to night would no longer be here (meaning the building wouldn’t always be unlocked as most of the tenants are only here sporadically). They agreed to keep us in the loop before construction began, work with us, and address these issues on May 3rd and again on May 5th. During this conversation, they also brought up wondering if we were willing to move, and our response back again was to the effect, “We have a pretty great space, decent lease rate, and don’t really want to move, but we’ll keep looking, but as we told you before, we looked for 10-months previously, and then asked them if they were truly willing to pay the moving expenses as those are looking pretty high when you figure in the increased amount for lease for the remainder of the lease as well as paying for other things currently included”.
 
By June 1st, we realized that we might need to use a clause in our lease that allows us to “…withhold rent in the event of a dispute of the Landlord not upholding the covenant of the agreement without causing a default or incurring late fees.”, and we have a 10-day Grace Period to get payment to them, so we knew we had some time to work out disagreements and try to get things resolved with minimally impacting our business before needing to get the lease payment to them. Over the next few days we started to see that we were correct in our concerns.
 
On June 2nd, without warning they started demolition, took away the closest emergency exit for 5 tenants, and said that they did have a permit from the city (which the city stated that in fact they did NOT have one) and said that the city said they could take away that access (the city didn’t). The demolition echoed through the entire space, as expected. We talked with the person designated as the Property Manager and she said that she was not aware that the construction would be starting yet. We brought up again about the potential for paint and other toxic fumes filling up in our space, the sound traveling, etc. The property manager told us that they essentially ignored everything, and gave the impression that the owners didn’t care how their construction project would impact not just our business, but also all of the remaining businesses. The ultimate response, when we brought up the construction issues again, was the comment back, “You could always hire a lawyer”.
 
On June 3rd, a construction dumpster showed up in the area of the parking lot closest to our entrance, and just 65’ from SchaOn’s therapy room window. This meant that the construction people had to carry/transport the demolition debris from the center area of the building, bring it past our entrance, through the area our clients would normally park and walk through to get to the dumpster. The noise interrupted SchaOn’s ability to work with clients numerous times. After a few days, the dumpster was completely overflowing, and eventually debris started blowing down the street into neighboring business and residential properties. We even had several clients comment to us stating they thought we had closed because of where the dumpster was at. It got to the point, the city had to actually contact them to have the dumpster removed and the debris cleaned up (their cleanup was not very effective as there are still large pieces of cardboard blowing around the property).
 
On June 9th (so, within the 10-day Grace Period), we sent the Notice of Withholding Rent. We extensively listed the issues we were having and noted corrective actions needed. We also detailed alternate options such as them paying us to close down on construction days or them buying out our lease based on our expected cost increases we would suffer.
 
On June 10th, we came to pick stuff up from the office and discovered our keys didn’t work on the exterior of the building. We went to contact the property manager and noticed an email that was sent just 5-minutes earlier and after they had already started changing the locks, stating that they were changing the locks and that they would be available in the afternoon (hours later) to give keys, essentially leaving us locked out. Thankfully we were able to rearrange our full-day’s schedule enough to get back to the office for keys.
 
On June 16th, they started painting, and as expected the paint fumes filled up in the entire section of our building, to the point one therapist was coughing non-stop, everyone (including clients here) had headaches, dizziness, etc. One person even commented they could taste the paint in our waiting area, which we informed the property manager about.
 
On June 21st, we received a letter, finally responding to our letter to the landlord attempting to resolve matters, from their lawyer advising us to “have no further direct communication with my client…” and that they are prepared to take us to district court and evict us for non-payment.
 
Then, on June 24th, without notifying any of the tenants actively conducting business in the building, they turned off overhead lights as well as the HVAC system (which includes air conditioning) for our section of the building. Lights came back after about 30-minutes, though we are now on day 5 without HVAC with no response from their lawyer about getting that utility back on. SchaOn’s office was over 88 degrees yesterday, and today when we came in the front waiting room was over 81 degrees. At this point, the noise from the construction is massively loud as we have to have our doors and windows open for some air circulation. In the past, the construction crew has also been yelling and swearing which is clearly heard through the common areas which our clients walk through to get to us.
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Fundraising team: Our Small Business (2)

SchaOn Blodgett 
Organizer
St. Paul, MN
Andre Thomas 
Team member