French King big box site in Stop & Shop’s hands

  • An available sign was posted on the site of a planned big box store owned by Ceruzzi Properties, of Fairfield, Conn., on the French King Highway in Greenfield, Monday, Jan. 22, 2018. RECORDER STAFF/DAN LITTLE

  • An available sign was posted on the site of a planned big box store owned by Ceruzzi Properties, of Fairfield, Conn., on the French King Highway in Greenfield, Monday. RECORDER STAFF/DAN LITTLE

Recorder Staff
Published: 1/22/2018 7:08:39 PM

GREENFIELD — Stop & Shop entered a leasing arrangement more than a decade ago that was intended to keep a major competitor from moving into the proposed big box on French King Highway.

That arrangement seems to have left the supermarket chain in charge of finding a new use for the property if a long-proposed big box department store is not built there.

The lease agreements, included among supporting documents in a Franklin County lawsuit, indicate Stop & Shop paid millions of dollars over the past decade to cement the complicated real estate deal that would have allowed construction of a department store but not one that included a large grocery store.

The land, owned by Ceruzzi Properties of Fairfield, Conn., is the site of a planned 135,000-square-foot big box store, long rumored to be a Walmart. But the project has been held up in court since 2011, after neighbors filed an appeal against the Planning Board’s decision to grant a special permit for the development.

But, now, Ceruzzi may have lost interest in being responsible for finding a tenant for the big box.

An “available” real estate sign recently appeared on the property, which is being marketed by 1st US Realty for Stop & Shop.

Mark Sobel, president and principal broker at 1st US Realty, confirmed Stop & Shop has a master lease on the property, and intends to sublease it. A spokesman for Stop & Shop said the company has no comment at this time.

According to Greenfield resident Al Norman, known internationally as a “sprawl-buster” consultant against Walmart and other big box retailers, this means Ceruzzi’s original prospective tenant is no longer interested and that Ceruzzi is letting Stop & Shop find a tenant.

Norman, who has led the fight against the Ceruzzi proposal for years, said, “I believe that Walmart has no interest in coming to Greenfield. I believe that sign we’ve now seen on the French King is a sign of the times, that Ceruzzi is now telling Stop & Shop, ‘Go ahead, you develop it … I think this is a significant change in the future of this project.

Ceruzzi’s director of property management did not return a request for comment after The Recorder left multiple voice mails.

The deal between Ceruzzi Inc. and Stop & Shop came to light after Norman discovered two lease agreements between the companies, which were tangential to a separate lawsuit in Franklin County Superior Court. The lawsuit was filed against Ceruzzi by a real estate broker who had handled the property at one point.

Norman said, “The only reason this is public now is because I stumbled across it in a court case.”

A master ground lease agreement between Ceruzzi, operating as Greenfield Property Development LLC, and Stop & Shop, dated March 30, 2007, gives Stop & Shop the right to build on the property, sublease it or transfer the lease to another party.

“It’s pretty open-ended what they could do,” Norman said.

However, a take-back ground sublease between the two companies, signed on the same day, reverses the roles — making Stop & Shop the landlord and Greenfield Property Investors the tenant.

Under the take-back lease, Greenfield Property Investors can build a retail establishment on the property, as long as it’s not a food supermarket, a food superstore, a food warehouse store, a specialty food store, a wholesale club, or any other store that dedicates more than 2,500 gross square feet to the sale of groceries.

“Stop & Shop is basically saying to Ceruzzi, ‘We agree that we’re going to turn around and let you be the tenant and you can build retail, but it can’t be a food supermarket or so forth,’” Norman said. “Under this agreement, this has Ceruzzi paying Stop & Shop $1 a year rent. I think this is a way for Ceruzzi to maintain control over development while still having its rent paid by Stop & Shop.”

The take-back lease also includes a section specifically pertaining to Walmart, which states that the big box company may not dedicate more than 9,000 square feet to the sale or display of food intended for off-premises consumption, such as groceries, if it builds a store on the site. However, Walmart could dedicate more space to the sale of milk, ice cream and frozen confectionery products under the agreement, as long as the amount is consistent with a typical Walmart store that is not a supercenter.

“Most Walmarts today, their grocery space is around 40,000 square feet, so this is very small,” Norman said. “They’re clearly trying to severely limit how much food can be sold if Ceruzzi is in control of building, they don’t want a food store on that property.”

Walmart spokesman Chris Buchanan said Monday the big box retailer has no plans for the site.

Norman believes the “available” sign that appeared on the property last week means two things — first, that the big box company Ceruzzi originally intended as a tenant is no longer interested in being in Greenfield, and second, that Ceruzzi no longer wants to deal with finding another tenant for the property, leaving that job to Stop & Shop.

“Ceruzzi is getting paid rent, (the company) doesn’t have to worry whether there’s anything there or not,” Norman said. “Ceruzzi put his company into a pretty strong position here, and Stop & Shop was desperate, I think, to stop a Walmart, and therefore did what they could to protect themselves at a great cost.”

Norman calculated that Stop & Shop has paid Ceruzzi more than $10 million to lease the property to date, although the court documents that included the lease, did not contain proof that money has changed hands over the years.

According to the master ground lease, Stop & Shop was to pay Ceruzzi $1.14 million per year during the first five years of the lease, which increased to $1.22 million per year for years six through 10.

The lease is for 25 years, with 11 five-year extension periods — making it up to 80 years total. The fixed rent increases by 10 percent per five-year period, according to the lease.

Norman said he is unsure what Stop & Shop’s intention to sublease the property means for his big box court case, but said neighbors will keep fighting as if a Walmart were still coming. But Norman said he believes that big box developer has lost interest in the project.

“(Walmart) is building almost no new stores this coming year, and the project I think they’re focusing on is internet commerce,” he said. “I think people’s dream of a Walmart is really remote.”

A Superior Court judge is expected to hear the big box case this summer, with a decision by early fall.




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