Regions Bank is extending its lease at City Hall until Sept. 30, invoking force majeure due to the pandemic.
“This letter is to advise you that due to the unprecedented governmental restrictions on business activities and the impact of COVID-19, which was completely unexpected and beyond our control, Regions Bank is invoking the force majeure set forth in Section 26 of the lease agreement,” said Maxwell Taylor, vice president of Regions Financial Corporation.
A force majeure maneuver refers to the occurrence of an event which is outside the reasonable control of a party and which prevents that party from performing its obligations under a contract.
The five-year lease between Regions Bank and the city was signed June 15, 2005. A new departure date is Sept. 30.
“Based on present circumstances and the hope that government restrictions on business activities will be lifted and the adverse impact of COVID-19 on our communities significantly decreases soon, Regions anticipates surrendering the leased premises in accordance with the lease on or before Sept. 30, 2020,” said Taylor. “Of course, this new date is based on optimistic favorable developments which may or may not occur. Regions will keep you updated as to any change in the new surrender date.”
McMinnville’s Board of Mayor and Aldermen reviewed the claim.
“In essence, this lease goes month to month,” said Mayor Ben Newman, an attorney. “According to the lease, the rent would be $2,600 a month, plus change. We need to make sure they are still paying their share of the maintenance cost. We’ve had maintenance done to the building. By the lease, they are still responsible for a portion of that.”
Finance Department director Shirley Durham stated, “They pay that monthly along with their rent. It’s estimated a year ahead what the costs are going to be – what their part is – and they pay that monthly.”
The request by Regions Bank to invoke force majeure and extend the contract was accepted without protest by the Board of Mayor and Aldermen.
“I don’t think this is something we need to take action on, unless we plan to somehow deny their request to extend their lease into a month-to-month,” said Newman. “I don’t think anyone is going to do that.”
