Tuesday, September 08, 2015

"Eviction" of DC Crime and Punishment Museum sets a disturbing example for other companies with "controversial" customers

This story is not about a policy issue, but it seems to illustrate an important problem for small businesses when they lease space or services from larger companies.

The Washington National Museum of Crime and Punishment will close after business on September 30, 2015, because the landlord has ordered it to vacate the premises immediately at the end of the lease.  The Museum wensite sites “unforeseen circumstances” (link ). The lease had held a clause that the landlord could refuse to renew if the business didn’t meet certain sales threshholds.  ABC News has a news story here. The Washington Post has a story here.  Here is another story in BizJournal, link .

The Museum says it will look for another location and try to conduct some tours.  But it appears to be auctioning some exhibits. 

That’s the part that is disturbing.  Why would this be the landlord’s business?  Why would the landlord care if the Museum paid the rent on time properly?  Does it really believe that lower sales means it will miss rent in the future?

I don’t know if the landlord got a cut in ticket sales, and whether that was part of the arrangement.  If so, it could have simply raised the rent and allowed the Museum to operate and raise its own prices if it needed to – but that could have threatened sales volume.

Maybe the landlord did not like the subject matter that the museum displayed, and feared it could affect future value of the property. That idea is scarier. 
It is true that sometimes larger businesses do feel that the behavior of customers, who on the surface comply with all agreements, can affect their long term image or viability or could even make them targets.

I see that I last visited the Museum and wrote about it around April 1, 2015.

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