LEASES

Description of leasing arrangements

The Company leased 23 stores at July 25, 2015, including five that are capitalized for financial reporting purposes. The majority of initial lease terms range from 20 to 30 years.

Most of the Company’s leases contain renewal options at increased rents of five years each. These options enable Village to retain the use of facilities in desirable operating areas. Management expects that in the normal course of business, most leases will be renewed or replaced by other leases. The Company is obligated under all leases to pay for real estate taxes, utilities and liability insurance, and under certain leases to pay additional amounts based on maintenance and a percentage of sales in excess of stipulated amounts.

Future minimum lease payments by year and in the aggregate for all non-cancelable leases with initial terms of one year or more consist of the following at July 25, 2015:



	Capital and financing leases		Operating Leases
2016	$	4,875	$	10,893
2017	4,875		9,215
2018	4,959		8,543
2019	5,001		7,187
2020	5,173		6,497
Thereafter	64,791		43,590
Minimum lease payments	89,674		$	85,925
Less amount representing interest	45,506

Present value of minimum lease payments	44,168

Less current portion	469
	$	43,699

The following schedule shows the composition of total rental expense for the following years:



	2015		2014		2013
Minimum rentals	$	11,090	$	11,308	$	11,192
Contingent rentals	893		872		960

	$	11,983	$	12,180	$	12,152

On November 6, 2013, the Company closed the Morris Plains, New Jersey store and opened a 77,000 sq. ft. replacement store in Hanover Township, New Jersey. The Company recorded a $3,481 charge to Operating and administrative expense in fiscal 2014 for the remaining lease obligations, net of estimated sublease rentals, on the Morris Plains store. As of July 25, 2015, $1,692 of these costs have been paid, with a remaining liability of $1,789.

On April 30, 2014, Village opened a 59,000 sq. ft. store in Union, New Jersey and closed our existing 40,000 sq. ft. store. The Company recorded a $929 charge to Operating and administrative expense in fiscal 2015 for the remaining lease obligations, net of estimated sublease rentals, on the old Union store. As of July 25, 2015, $663 of these costs have been paid, with a remaining liability of $266.

Related party leases

The Company leases a supermarket from a realty firm 30% owned by certain officers of Village. The Company paid rent to related parties under this lease of $640 in each of the fiscal years 2015, 2014 and 2013. This lease expires in fiscal 2021 with options to extend at increasing annual rents.

The Company has ownership interests in three real estate partnerships. Village paid aggregate rents to two of these partnerships for leased stores of $1,300, $1,008 and $834 in fiscal 2015, 2014 and 2013, respectively. In November 2012, the Company received $1,980 in cash distributions from two partnerships. Income from partnerships in fiscal 2013 of $1,450 represents proceeds received in excess of invested amounts.

One of these partnerships is a variable interest entity, which is not consolidated as Village is not the primary beneficiary. This partnership owns one property, a stand-alone supermarket leased to the Company since 1974. Village is a general partner entitled to 33% of the partnership's profits and losses.

The Company subleases the Galloway and Vineland stores from Wakefern under sublease agreements which provide for combined annual rent of $1,296. Both leases contain normal periodic rent increases and options to extend the lease.