City to join Whole Foods lawsuit?

If Kmart has its way in Charlottesville Circuit Court, construction of the 45,000-square foot Whole Foods grocery store will cease.

Two projects that will potentially change the current landscape of Hydraulic Road—a long-awaited Whole Foods grocery store and Hillsdale Drive Extended—recently hit snags when Kmart filed a lawsuit against the company behind both development projects in April. Now, Kmart has filed an amendment to add the City of Charlottesville as a party to the lawsuit. 

“When completed, [Hillsdale Drive Extended] will be dedicated to the City as a public street,” says Craig Brown, city attorney, in an e-mail. “We have not yet received notice of being added as a party, although it sounds like that is in the works.” The order, received by the Charlottesville Circuit Court, was yet to be signed by a judge at press time.

In the lawsuit, Kmart claims that the construction of Hillsdale Drive Extended and the 45,000-square foot grocery store are a breach of Kmart’s lease with Meadowbrook Creek, LLC, also the developer of the Whole Foods site. The lease, drafted in 1991, includes a clause that states the landlord “will not erect any buildings or other structures” on property leased to Kmart.

The lawsuit contends that construction of Hillsdale Drive Extended and other improvements eliminates “at least” 110 parking spaces, and prevents Kmart from being fully operational.

“No comparable alternative parking area is available to Kmart, its subtenant [Gold’s Gym] and their customers,” reads the suit, which says the alleged breach of the lease “is causing Kmart to suffer damages in the form of lost profits and diminution of the value of its Leasehold.” Kmart requests $500,000 in damages, along with a preliminary and permanent injunction to prohibit Meadowbrook Creek from completing the projects, and restoration of the Whole Foods site, already under construction

The $30 million Hillsdale Drive Extended is intended as an alternate north-south corridor to the congested U.S. 29. The road’s planned path leads from its intersection with Greenbrier Drive through Pepsi Place and the Seminole Square Shopping Center, and ends at Hydraulic Road, between Kroger grocery store and Dominion Power. 

Miles Dumville, the Richmond attorney representing Kmart, contends that “Hillsdale Drive for the most part…has been built in the area that Kmart leases, and a small portion of the proposed parking lot of Whole Foods, likewise, is within the Kmart boundaries.”

A hearing was scheduled in the Charlottesville Circuit Court for June 14. For the latest developments, head to c-ville.com‘s headline news blog, This Just In

C-VILLE welcomes news tips from readers. Send them to news@c-ville.com. 

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