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Real Estate - Commercial

Developer Sues After Lidl Scraps Wilmington Store On S. 17th Street

By Cece Nunn, posted Jun 12, 2018
According to a lawsuit, German grocer Lidl terminated its agreement with a developer to open a store on South 17th Street in Wilmington. (Photo courtesy of Lidl)
A Texas-based development firm that had planned to build a Lidl grocery store-anchored project off South 17th Street in Wilmington is suing Lidl after the discount grocer terminated its purchase and sale agreement with the company.

In a complaint filed June 8 in the U.S. District Court for Eastern North Carolina, Leon Capital Group officials allege that their lawsuit stems from Lidl's "fraudulent and deceptive conduct and its intentional and wrongful termination of certain agreements, contracts, and promises with Leon regarding three real estate development projects in North Carolina located in Cary, Wilmington, and Charlotte."

The complaint states that Lidl "abruptly terminated its agreements" to buy real estate parcels from Leon Capital Group and "reneged on its obligations to construct and operate the stores."

Lidl pulled out of the Wilmington development, which was to be called Arbor Commons at 4301 S. 17th St., on Nov. 3, 2017, according to Leon Capital Group's complaint, after engaging the development firm to create a Lidl grocery store-anchored center in Wilmington in late 2015 and early 2016. 

"Lidl was claiming the city of Wilmington had not issued its permit for Lidl to proceed with construction of its store; however, Leon contacted the City of Wilmington and verified that the City had approved all necessary approvals and permits for Lidl to proceed with construction on the Lidl Wilmington Tract," Leon Capital Group's complaint states.

In October 2016, Texas-based investment firm Leon Capital Group bought the 10 acres at John Barry Drive and 4301 S. 17th St. for $2.6 million.

Leon Capital Group's complaint also states that Lidl owes the firm nearly $440,000 from an agreement that would have covered the site work, including roads and access points, that the development firm had already done on the South 17th Street project. 

"The lack of an anchor Lidl grocery store will significantly and negatively impact rents and/or sales prices for the retail and commercial spaces in the Wilmington Development [Arbor Commons]," the lawsuit states.

The complaint requests that the court hold Lidl to its contracts with Leon Capital Group, also asking that the development firm be awarded punitive and compensatory damages.  

When asked for more details Tuesday, Leon Capital Group General Counsel Rob Pivnick responded in an email, “Our company policy is not to comment when litigation is pending.”

Lidl, a German discount grocery store chain that is considered an Aldi competitor, had plans to quickly enter the American grocery market in recent years, announcing in 2016 that it would build hundreds of stores in the Eastern U.S.

Leon Capital Group's lawsuit states that "Lidl has taken a hatchet to its plans and dramatically scaled back its expansion."

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.

Efforts to reach a representative of Lidl to ask about the lawsuit and the status of the other stores planned in the area were not immediately successful Tuesday afternoon.
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