Owners sue over lease's limits

Rite Aid agreement forbids competition

July 15, 1999|By Sheridan Lyons | Sheridan Lyons,SUN STAFF

The owners of a Mount Airy shopping center want a Carroll County judge to order a current tenant, Rite Aid of Maryland Inc., to accept a new Wal-Mart there.

Apparently, the Mount Airy Wal-Mart isn't the sure thing town planners and opponents thought it was.

A provision in the drugstore's January 1972 lease -- when the Rite Aid was a Drug Fair -- states that the shopping center owners cannot lease space to or permit a competing business within a two-mile radius, according to the lawsuit filed this week.

In November, the town planning commission unanimously approved plans for an 85,000-square-foot Wal-Mart on 14 acres behind Mount Airy Shopping Center, near Route 27 and Ridgeville Boulevard, noting that the land was zoned for commercial use. The land is owned by the shopping center.

"They have an approved site plan," said Monika Jenkins, the town planner who has been involved with the project for about eight months.

The new Wal-Mart would be behind the shopping center, which would be renovated and upgraded, and the state and county have approved road improvements, she said.

But until the rights of Rite Aid are determined by a court, "Wal-Mart has refused to execute a contract of sale with the plaintiffs," according to the lawsuit by Mark Taff of Bethesda and his sister, Carol Eisenberg of Florida, the Taff Family Trust, and Mount Airy Shopping Center LLC.

The dispute centers on a restrictive covenant that precludes " any other drug store, variety store or photo-finishing business, or any store whose primary business is the sale of patent medicines, health and beauty aids, cosmetics, lawn and garden or outdoor living merchandise "

While Wal-Mart offers some of these items, the owners contend, " the restrictive covenant of the lease agreement does not act to restrict the type of business that Wal-Mart may conduct at the Wal-Mart location." Their lawsuit asks the court to "find and declare that Wal-Mart is not" any of these and is not prohibited by the lease.

Wal-Mart isn't a party in the lawsuit -- only Rite Aid and the shopping center owners. The owners said in the lawsuit that they had notified Rite Aid of their intention to sell the adjoining land and asked for an agreement that the lease did not restrict the type of business Wal-Mart could conduct there.

Rite Aid sharply disagreed, according to a July 7 letter from I. Lawrence Gelman, the corporation's vice president for real estate law in Camp Hill, Pa., attached as an exhibit to the lawsuit. The letter said in part:

"The proposed operation by Walmart of a drug store within its Premises is in direct violation of the Rite Aid Lease dated January 31, 1972. The plain and unambiguous terms of the Rite Aid Lease provide that the Landlord will not permit the operation of any other drug store. We will not acknowledge your request and will vigorously defend the valuable rights bargained for under the Rite Aid Lease. Apparently, Walmart is also unpersuaded by the argument you have advanced."

Linda Boyer, a former mayor of Mount Airy who lives across the street from the Wal-Mart site, has been active in Citizens for a Better Mount Airy, a group that opposed the plan.

"I'm certainly not going to cry over it. I don't think we need it," she said. Several Wal-Marts are 15 minutes away. "We did the best we could to let them know we didn't want them.

"We would never get out of the driveway. We have enough trouble now," Boyer said. But "the property is zoned, so they have a right to develop it, as much as I didn't want another Wal-Mart in the area. It has a tendency to put struggling independent businesses out of business."

"People who live here, they love the small town. They came to get away " she said. "Our community has changed radically in the past 15 years, and not all has been good."

Charles M. Preston, an attorney for the shopping center owners, emphasized: "At this point, we're not representing Wal-Mart -- we're representing the owners."

A spokeswoman at Wal-Mart headquarters could not be reached for comment on the Mount Airy site, but has said previously that the chain always has numerous locations in various stages of preparation around the nation.

Preston, who has been a local attorney for several chain stores such as Target and Lowe's, said it's not unusual for a big corporation to spend money before the site is set.

"I know that sometimes these outfits come in and spend a lot of money, preparatory. It's not unusual at this stage of the game," he said.

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