Rouse allows Giant to break Oakland Mills lease Companies won't divulge details of negotiations

February 27, 1997|By Erin Texeira | Erin Texeira,SUN STAFF

The Rouse Co. has allowed Giant Food Inc. to break its lease in Columbia's Oakland Mills village center -- years before the lease was to expire.

Rouse allowed the action even though it has no tenant lined up to fill the space in the troubled village center, a Rouse official acknowledged at a village board meeting Tuesday night.

Giant's plans to leave the village center this June were announced late last week. The news prompted residents at the meeting to allege that Rouse accepted a payment from Giant so it would be allowed to leave the center.

A Giant spokesman declined to comment about negotiations on the lease, which was to expire in 2001. And Wayne A. Christmann, manager of Columbia's village centers for Rouse, would only say that the two companies had reached an agreement "to do what was best for the village center."

At the village board meeting, residents lamented the loss of the 15-year-old grocery store, which Giant says is a victim of sluggish sales. They also questioned Rouse's commitment to the ailing village center.

"We realize Giant made a business-oriented decision here, but we're asking you and your company to make a people-oriented decision," Alex Hekimian, the village's Columbia Association representative, told Christmann. "We'd like to leave here with some hope."

About two dozen residents questioned Christmann for about 90 minutes, asking repeatedly when he expected a new food store to open in the location that will be available after June 28.

Christmann replied that the grocery store space may be expanded -- perhaps to more than triple the current 14,000-square-feet -- and other changes made at the village center before a new tenant would be willing to lease it.

But he said that it was premature to say what will happen for certain. "A lot of different things can happen, and this gives us the opportunity to explore those things," he said.

Christmann said he has talked with potential tenants about taking over the Giant space.

At the meeting, some residents wanted to know how Giant could break its lease.

"I understand you can't answer any questions about a penalty you might have been paid by Giant," said Ruth Cargo, who lives in the Stevens Forest neighborhood of Oakland Mills, addressing Christmann. "But if you did, maybe it could be used in this community to provide transportation to people who can't get to other stores."

Rouse and Giant have a long-standing business relationship: Four other Giant stores operate in Columbia and a fifth will be built in the new River Hill Village Center. The food chain also owns and manages the village center in Owen Brown.

It would not be unusual for such partners to settle a broken lease with cash, said Dennis J. Lane, a commercial real estate adviser in Columbia.

But he added: "Each deal is different. "A company like Giant could say, 'Look, we have X amount of time on our lease, and we're going to get out regardless," he said. "There are things we can do to make it easier for you to get the next tenant in here faster.' "

But such village center merchants as Ken Keepers, owner of Oakland Mills Liquor, said they were sure they wouldn't receive the same treatment from Rouse.

"I'm sure they'd probably sue me if I tried to break my lease -- and I'm quite sure I'd be responsible," he said, adding that his business fell 20 percent last year after the Giant closed its delicatessen and salad bar. With the closing of the store, he says, he's sure his business will dwindle even more.

Pub Date: 2/27/97

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