A developer is proposing to build apartments and townhomes in Wilmington in the spot where a Lidl grocery-store anchored commercial center was previously planned.

Instead of a Wilmington location for the German-based grocer and office and retail components, the Arbor Commons site bordered by South 17th Street, Peel Street and Hollingsworth Drive could hold 209 multi-family units. Site plans show 183 apartments in two, three-story buildings along South 17th and Peel streets and 26 townhomes along Hollingsworth Drive. The plans also show a clubhouse and recreational facility building, a pool and 354 parking spaces.

Texas-based development firm Leon Capital Group, which had been developing the proposed Lildl-anchored center on the site, filed a lawsuit in June against Lidl after the discount grocer terminated its purchase and sale agreement (PSA) for the South 17th Street project in Wilmington. The lawsuit involved two other proposed Lidl projects in North Carolina -- one in Cary and the other in Charlotte.

The suit seeks damages, in one portion arguing that without the Lidl store, rents and sale prices for retail and commercial spaces in Arbor Commons would be impacted, an argument Lidl's attorneys describe as unjustified in filings this month.

On July 6, attorneys for Lidl filed a motion to dismiss defendants Lidl US LLC, Lidl US Operations LLC and Lidl Management Inc. from the Leon Capital Group lawsuit, stating, "Each agreement provided Lidl US Operations with certain rights to terminate the agreement prior to closing. Importantly, under the agreements, even if Lidl US Operations terminated an agreement without a contractual basis to do so, Lidl US Operations still had the ability to terminate at any time prior to closing. 

"In that event, the agreements specifically provided that – as its sole and exclusive remedy for Lidl US Operations’ failure to close – Leon could demand and receive, as liquidated damages, the entire earnest money deposit. This liquidated damages provision, contained within each of the relevant agreements, was clear and unambiguous, and was the result of an armslength contract negotiation between two sophisticated players in the national commercial real estate market, both represented by counsel."

The motion documents go on to say that Leon Capital Group did not request the surrender of Lidl's previously-deposited earnest money for any of the potential projects. According to the WIlmington PSA provided by Lidl's attorneys in the filing, the earnest money amount to be deposited was $103,600.

Separately, Lidl also had at least two other locations in Wilmington and the region in the works that didn't involve Leon Capital Group, one in the Leland area and the other on Eastwood Road. Lidl purchased the Leland area and Eastwood Road sites.

The South 17th Street site in Wilmington was purchased by Leon Capital Group in 2016 for $2.6 million. A different firm, Madison Capital Group of Charlotte, is proposing the apartments and townhomes, but representatives from Madison Capital had no comment on the new proposal Monday.

A conditional district rezoning for the property that would enable Madison Capital to build the proposed apartments and townhomes is on the agenda for the Aug. 1 meeting of the Wilmington Planning Commission. The request seeks to change the property's zoning designation from Community Business (Conditional District) to Multi-family Medium-High Density (Conditional District), according to the agenda.

The Aug. 1 meeting of the commission starts at 6 p.m.

SHOWN ABOVE: The most recent site plans for the Arbor Commons project, with townhomes along the back and apartments in front, are shown above previous site plans that showed a grocery store and office and retail structures.