Three months ago, the Rouse Co. offered Stop Shop and Save grocery chain President Henry T. Baines an undisclosed amount of money to close his store at Mondawmin Mall as Rouse prepared to bring in a larger supermarket there.
"We didn't get a rational response," said Anthony T. Hawkins, a Rouse vice president and group director.
The offer is part of a lengthy strategy by Rouse to add new luster to the Baltimore complex in an effort to attract a wider, more affluent customer base.
Baines countered with a demand for more money. "If [Rouse] makes me a rational offer, then we'll have a deal. He has not made a rational offer."
Now that the dispute has become public, some city officials are concerned that the black-owned Stop Shop and Save will be forced out by big businesses.
City Council President Lawrence A. Bell III said he's "keeping an open mind" about the matter, but is worried that the mall might lose "a significant black business" if Stop Shop and Save leaves in the face of competition from a bigger store.
Mayor Kurt L. Schmoke said his concerns were eased after talking to Rouse officials yesterday: "I'm convinced that if Mr. Baines wants to stay there, his multiyear lease will be honored."
Giant Food Inc., which wants to open a store at Mondawmin, is sending a letter today to Baltimore officials and the city's legislative delegation stating that Giant "has not attempted in any way to remove Stop Shop and Save from" Mondawmin, said Barry Sher, Giant's vice president for public affairs.
"We thought it would be good public relations that everyone understands Giant's position," said Sher. "The mayor even questioned me about Giant's intent, and that, plus other inquiries, prompted me to respond."
On Monday, the Rouse Co., a subsidiary of which owns and manages Mondawmin, sent a nine-point "fact sheet" to The Sun and city officials giving a chronology of events leading to the current dispute.
"We told [Baines] a year before he was involved that we were negotiating" to bring in a large, nationally or regionally known supermarket chain that would be attractive to a broader customer base, said Rouse's Hawkins.
"If Mr. Baines wants to stay that's fine, but we're going ahead with our plans."
Rouse's position
Rouse is betting on an apparent legal technicality to facilitate the move. Baines says his lease stipulates that Rouse cannot put a grocery store bigger than his 32,000-square-foot store in the mall.
But Rouse plans to have the new 60,000-square-foot supermarket built onto the 145,000-square-foot Metro Plaza, an adjoining minimall carved from a former Sears store on the east side of the mall, Hawkins said.
It's owned by a Rouse subsidiary, Rouse Metro Shopping Center Inc., and the black-ownedNorthwest Associates, a venture of real estate developers Theo Rogers and William L. "Little Willie" Adams, Hawkins said.
"It is not necessary to obtain Mr. Baines' approval nor terminate his lease" to open a supermarket at Metro Plaza, Hawkins said.
Baines' position
Baines said he will sue if another supermarket opens there. "We'll see what the court says," Baines said.
Several commercial real estate executives, who did not want to be named, said Rouse needs Giant to help draw other big-name retailers such as Sears as part of its plans for renovating and expanding the 41-year-old mall.
But Bell said that it appears to him "that Rouse should want to maintain the spirit of" its contract with Baines by not opening another supermarket. "The perception of people who go to Mondawmin is that Metro Plaza is an extension of the mall," he said.
The Rouse-Baines relationship has been rocky since January 1996, when the Richmond, Va.-based wholesaler Richfood Holdings Inc., bought the leases of eight stores from bankrupt Farm Fresh, including one at Mondawmin.
Richfood then announced the sale of five of the stores to Baines. Yesterday, Baines said he operates the stores "in partnership with" Richfood, his wholesaler.
John Stokely, president and chief executive officer of Richfood, said that his company subleases the five stores to Stop Shop and Save and would provide the financing to expand the store and make any improvements that might be negotiated with Rouse.
"I'm mystified as to why Rouse won't embrace Mr. Baines in that facility," said Stokely.
Baines said a key reason Rouse wants him out is that the lease he assumed is outdated, requiring a monthly rent of $3 to $4 a square foot for the 32,000-square-foot store. Rouse officials "think they're not getting enough rent," Baines said.
Most grocery stores in the region spend about $15 or $16 a square foot for space.
Rouse's Hawkins would not comment on the lease.
After he assumed control of the store, Baines said, "We offered to remodel the store, build a new store but they turned us down."
Pub Date: 6/04/97
