Land Demolition of Current Business - 3.5 yr Lease left

We own a business in a small complex with 3.5 years left to go on the lease. The landlord recently contacted us in regards to a few major changes they're looking to make: they want to demolish the current building to make room for a large corporation.

EDIT: We live in Pierce County, Washington.

Some information:
**3.5 years left on the lease @ roughly $32,000 per year.
**We own a small business that has been there for the last 8 years. Moving or closing down would definitely hurt business.
**They want to get all the tenants out by October of 2007.

Their first initial offer:
We met with them a few days ago and they proposed the following: they would pay for all the expenses involved in the moving of our business. That's what they proposed at the very first meeting. We are scheduled to meet again in about a week and a half to further discuss the details of the termination of this lease.

For this next meeting, we're planning on looking at numbers even further. Their offer: pay for our move. What we would like to see: $200,000.

We would like to know where we stand on this issue. They're only paying for our move, but moving our business would surely hurt it. We've been in the area for about 10 years and we've had this business for about 8 years. We've established a wonderful relationship with the people in the community and we don't want to leave. Any suggestions as to what our options are?

Thank you very much in advance for your time and advice.

-Bernard.

Hard question to answer completely without seeing your lease in its entirety. What does the lease allow for either party to terminate before the expiration date? If the lease is silent, the landlord would (in my opinion) typically have a 30 day advance notice to vacate requirement...again, unless it specifies otherwise. Much also depends on your city/local laws, and that can probably best be answered by a competent attorney in your area. I'm curious as to where you came up with the figure of $200,000? It's been my experience that typically you can't recover loss of projected income, but that may not necessarily be the case in your situation, especially if your landlord isn't acting in accordance to the terms. I don't think it's unreasonable to expect relocation expenses to be reimbursed, but I would expect a pretty precise accounting of how you arrived at $200,000.
I think your best bet in the kind of situation is to have an attorney thoroughly review the terms of your lease and then discuss any terms of compensation (through him, if needs be) with your landlord. Not much help, I realize ... but without a bit more information (and a copy of the lease,) all I can offer is a suggestion. (Particularly considering the amount of compensation you're suggesting.)

Again, I'm offering only a suggestion here, and not legal advice. Good luck.

Thank you very much for the prompt response. I've been so busy that I haven't had a chance to sit down and check this forum in a little while so I apologize for the delay in my response.

$200,000 - Here is my thinking: it's a very small business and our overhead is fairly high. Let's assume that we're making a net profit of about $50,000 a year. Let's also assume that profits will steadily increase about 3-7% ever year. I think that projection sounds fairly reasonable for a business this size. For the sake of number crunching, let's use 5%.

Year 1 - 50,000
Year 2 - 52,500
Year 3 - 55,125
Yr 3.5 - 28,940 (57881.25/2)

3.5 year projected net profit summation - 186,565.

That's where the bulk of the 200,000 came from. I figured we'd have additional expenses associated with closing business so I rounded up to a nice even number.

Do you think this is an unreasonable amount? I'm not trying to get rich through this whole process, but I do have to do what's right to protect my family.

Thanks again for your help.

I would expect the landlord to follow through as promised and that would be to reimbuse all moving expenses. I don't know as I'd realistically expect 100% of my estimated future profits be reimbursed as well. Again, much would depend on the terms of the lease and the language regarding termination. I think the landlord's given you plenty of advance notice but without seeing your lease in its entirety, I don't really know if you can realistically expect much more than what's already been offered. Personally, I'd consult with a real estate attorney in the area and discuss my options with him/her before meeting again with the landlord, so I don't overlook any other possibilities, such as 'start-up costs' at a new location, for example. It certainly couldn't hurt.