The owners of a plaza located on the Manchester/Hooksett line have initiated legal action against the New Hampshire Liquor Commission, alleging that the commission abandoned its lease following a sprinkler system failure that resulted in damages exceeding $180,000 in liquor inventory. The lawsuit, filed in Hillsborough Superior Court, claims that North Side Realty Trust, the landlord, is owed four months of unpaid rent, as the commission could have resumed operations after conducting necessary repairs.
In response, the New Hampshire Liquor Commission has filed a counterclaim asserting that the lease was terminated lawfully. The commission stated that it has been addressing issues related to the sprinkler system since 2015. A New Hampshire Liquor and Wine Outlet has been operating in “Building C” of the North Side Plaza since 2009, with a previous storefront active since 1991. The most recent lease agreement was set to run from August 1, 2024, to July 31, 2029, with an initial monthly rent of $19,833.33 increasing to $29,750 after February 28, 2027.
The commission decided to permanently close the store due to “significant and ongoing maintenance issues” linked to the fire sprinkler system, along with the substantial loss of liquor inventory. It is estimated that the store lost millions in sales during its closure, according to sales data. In the meantime, a new Liquor and Wine Outlet is scheduled to open at a former Rite Aid location on 1631 Elm St. in Manchester.
The lawsuit details that the sprinkler system’s air compressor failed, leading to significant water damage primarily in a mezzanine office and warehouse area. Following this incident, North Side Realty Trust employed contractors to replace the damaged compressor and pipes. In a termination letter sent last July, Joseph Mollica, chairman of the commission, informed North Side Realty that the store would vacate the premises under Section 16 of the lease, which provides protection for tenants if a substantial portion of the property is significantly damaged.
According to the lawsuit, the commission allegedly demanded that North Side replace all affected pipes and compensate for lost products and sales during a phone conversation. The suit claims that the lease stipulates the tenant is responsible for maintaining the interior of the premises.
In its counterclaim, the commission contends that the fire protection system exhibited signs of deterioration as early as February 2015, with repeated leaks and malfunctions. It asserts that a catastrophic failure of the system last March resulted in extensive water damage and product loss. The Manchester Fire Department reportedly instructed the commission to assess the possibility of revoking its certificate of occupancy due to significant repair needs in the tenant area and the questionable reliability of the fire sprinkler system.
Fire Marshal Mitchell Cady characterized the repairs as temporary solutions until more lasting fixes could be implemented. The counterclaim also alleges negligence on North Side’s part, stating, “North Side further negligently and unlawfully breached this duty through its inadequate repairs to the sprinkler system in Building C.” The commission claims it incurred actual damages, including lost profits, property damage, and relocation costs as a direct result of North Side’s negligence.
North Side Realty Trust has denied these allegations, asserting that all exterior and common systems were properly maintained and repaired as necessary. The two parties have agreed to proceed to trial, which is expected to last approximately five days, although no specific dates have been established yet.
