Lease dispute over an Alexandria, VA post office goes to court

Steve HutkinsBlog, Featured

The Community Branch post office in the Mount Vernon Plaza shopping center in Alexandria, VA (22306), is set to close at the end of February. The owner of the property has filed a lawsuit against the Postal Service, and both sides are telling the media that they can’t talk about the case due to the pending legal action. A local news report on Fox5 and court filings, however, provide some background on what’s happened.

The Postal Service has been leasing space for the post office at the Plaza at 7676 Richmond Highway since 1983. It’s a large and very busy shopping center, and the post office is described as a “popular” spot. It’s just 15 miles from USPS headquarters in L’Enfant Plaza, so it’s probably known to some of the people who work at HQ. (As Bill McAllister of Linn’s Stamp News let me know, the post office is actually in Fairfax County and not within the city limits of Alexandria, but the Postal Service classifies it as a “branch” of the main post office in Alexandria.)

The current lease with Federal Realty Partners started in 2007, and it’s due to end on February 28, 2023. In 2014, the landlord filed a complaint alleging that the Postal Service had not paid real estate taxes of $29.549 and common area maintenance (CAM) charges of $2,116, from 2008 to 2012. That dispute was settled, and the lease was amended in 2015 to include the additional payments.

For some reason not made clear in the court filings, the Postal Service apparently stopped making the payments in 2020. In early August 2022, Federal Realty wrote the Postal Service to say that it did not intend to offer the USPS the opportunity to renew the lease or do a holdover period, apparently because the Postal Service was not paying the additional amounts agreed upon in the amended lease.

On September 1, 2022, Federal Realty again wrote the Postal Service to remind the agency that it was in default of the payments: “If you fail to forward the full amount due through August 2022 within the time period provided in the Lease, we are permitted under the Lease to take legal action against you in order to collect the outstanding amounts due and/or to recover possession of the premises. Your immediate response is required to avoid legal action.”

A couple of weeks later, on September 13, 2022, the Postal Service put out a news release in which it proposed relocating the Community Branch post office to a yet-to-be-determined location and invited customer feedback.

This notice is a required step in the post office relocation process. As noted in the news release, the Postal Service is required to follow the regulations in 39 CFR § 241.4. This news release should be provided to the news media serving the community, shared with local officials, posted in the lobby of the post office, and sent to the lessor. There’s also supposed to be a public meeting at some point.

A news item in On the Move, dated Sept. 5, 2022, discusses the proposed relocation and says that “a USPS notice posted to Nextdoor on Aug. 26 by a branch customer indicated that the Postal Service was proposing moving.” The customer may have seen a notice in the Community Branch lobby or received a copy in their mail, but the Fox5 report this week made it seem as if some customers were first finding out about the pending closure in December, when some employees started sharing the fact that they wouldn’t be around in the coming year.

The Federal Realty makes no reference to such an announcement in its court filings, so it’s not clear if the Postal Service ever informed the lessor of the relocation plan. The notice also does not mention anything about a public meeting, which the Postal Service may plan to skip due to the pandemic.

In any case, Federal Realty again wrote the Postal Service on October 12, 2022: “Landlord has attempted, through numerous formal and informal communications over the last year, to resolve with Tenant issues concerning the Lease’s termination and turnover, as well as the open CAM charges and operating expenses. Despite Landlord’s communications, there has been no response or resolution.”

Then on December 22, 2022, Federal Realty filed its lawsuit. In its filing, Federal Realty claims that there are “current arrears” of $71,015 — the equivalent of about two and half months’ rent — in taxes and operating expenses and other costs, plus interest, damages, additional rent and attorneys’ fees and costs.

Based on the documents in the filing, it appears that the Postal Service has not been responding to the letters Federal Realty has been sending, and perhaps some phone calls as well. The filing contains no exhibits of USPS responses, and the only public statement from the USPS (which is not included in the filing) is the Sept. 13 news release saying that it was initiating the process for relocating the post office.

The Postal Service probably has a lot more say about the dispute, but it declined to comment to Fox5 due to the pending litigation. The lawsuit may go on for a while, so one possible outcome at this point is that the Postal Service will declare an emergency suspension and close the office sometime before Feb. 28, 2023, when the lease ends and the owner reclaims the property.

Or perhaps the parties will come to an agreement as they did back in 2014, and the post office will remain open. The amount in dispute shouldn’t be enough to close a popular post office that probably generates plenty of revenue.

— Steve Hutkins