Business

Albertsons drops bakery and growler shop from lawsuit against shopping center owner

Albertsons sues Boise bakery, growler shop at Hillcrest

Albertsons says a Boise bakery and growler shop don’t have the right to operate near their store at the Hillcrest Shopping Center.
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Albertsons says a Boise bakery and growler shop don’t have the right to operate near their store at the Hillcrest Shopping Center.

Update: Albertsons has dismissed Granny C’s Bakery and CopenRoss Growlers from its lawsuit filed against the owner of Hillcrest Shopping Center, the company announced in a statement Thursday. The Boise company is still suing FPA Shoppes, the landlord of the mall where the businesses are located.

“When Albertsons filed these lawsuits at the end of July, we had no visibility into the lease agreements that had been provided to Granny C’s and CopenRoss Growlers,” John Colgrove, president of the Intermountain Division of Albertsons, said in a statement. “It was only when the details of Granny C’s lease agreement were made public that we learned about the discrepancies between their lease agreement and ours.

“Our lease agreement from 1987 stipulates that the landlord must provide us with the opportunity to review businesses that might directly compete with products we sell. The landlord didn’t uphold their obligations to Albertsons when the landlord recruited these new tenants for Hillcrest Shopping Center. Unfortunately, all three businesses have suffered damages as a result of the landlord’s failure to uphold its obligations to Albertsons under our original lease agreement.”

Below is our previous reporting.

Brad deBoer opened Granny C’s Bakery in a small shop at the Hillcrest Shopping Center in April. He never imagined selling freshly made cinnamon rolls, muffins and cakes would incur the wrath of a grocery giant.

Last week, Albertsons, which is also a tenant at the Hillcrest center at Orchard Street and Overland Road, sued Granny C’s; another shop, CopenRoss Growlers; and the shopping center owner, FPA Shoppes at Hillcrest.

Albertsons contends Granny C’s and CopenRoss Growlers are violating a noncompete clause in its lease that gives the Boise grocery chain exclusive rights at the center to sell groceries, baked goods and alcoholic beverages to be consumed off the premises.

DeBoer said he is caught in the middle. He said he was blindsided by the lawsuit filed Tuesday, July 30, in Ada County District Court.

Albertsons said it informed The Shoppes at Hillcrest on April 16, five days after deBoer opened his bakery in a 1,650-square-foot shop, that Granny C’s was operating in violation of Albertsons’ lease. DeBoer told the Statesman he didn’t know about Albertsons’ rights until the lawsuit.

DeBoer said he worked with the center’s owners to craft a contract before opening and was never told that operating his bakery would cause a conflict.

“When you use a real estate agent who works with the company and they write the contract, you would think you’re doing the right thing,” deBoer told the Statesman by phone.

FPA Shoppes at Hillcrest could not be reached for comment. The company lists a Newport Beach, California, address, and incorporated in Idaho in 2014, according to the Idaho Secretary of State’s Office. An annual report filed June 24 lists Michael B. Earl as a manager. A Statesman call to Earl on Tuesday was not returned.

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CopenRoss Growlers, located in the same building as Granny C’s Bakery, denies it violated its lease. Albertsons claims the shopping center should not have allowed the two businesses to operate there. Statesman file photo

CopenRoss Growlers opened last year and offers 70 taps of beer, wine, cider and kombucha. The drinks are packaged in glass growlers and 32-ounce aluminum cans. The shop also sells pub food such as toasted sandwiches, burritos, wraps, nachos, mini tacos and salads.

“We really don’t want to comment on the lawsuit, other than to say that we have not violated our lease,” owner Lisa Copenspire-Ross said in an email to the Statesman. “We would love it if folks would come down and check out our huge selection of craft beer, have a bite to eat, and fill their growlers.”

Albertsons entered into a lease with Hillcrest Plaza Partnership, the previous owner of the Hillcrest Plaza, in July 1987. The lease provides Albertsons protection against competitors.

“No portion of the shopping center other than the leased premises shall be used as a supermarket (which shall be defined as any store or department containing at least 5,000 square feet of floor area) ... as a bakery or delicatessen for the sale of fresh or frozen meat, fish poultry or produce for off-premises consumption; or for the sale of alcoholic beverages for off-premises consumption,” the lease reads.

Albertsons is seeking an injunction to prevent the two businesses from operating at their current locations and to force FPA Shoppes at Hillcrest to enforce its lease agreement.

“If injunctive relief is not entered, Albertsons will suffer immediate and irreparable injury, including but not limited to loss of customers and customer relationships, loss of revenue to Albertsons and other damages related thereto in an amount to be proven at trial,” Boise attorney John Kurtz Jr., who represents Albertsons, wrote in the complaint.

Kurtz said Albertsons would seek $5,000 in attorney fees if the defendants don’t fight the lawsuit and a greater amount if they contest it.

An Albertsons spokeswoman did not respond to a call and email for comment.

DeBoer said he ran into problems getting approval from the shopping center to put up a business sign above the entrance to the shop. He later learned it was because of the dispute with Albertsons. The space where the sign would have gone remains blank.

The shop never got the prominent sign deBoer said he needs but now has lettering in the front window, a generic sign saying “bakery now open” in the drive-thru and a small ground sign near the curb reading “Granny C’s Bakery.”

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Granny C’s Bakery opened in April. Now it is being sued by Albertson’s for allegedly violating parts of its lease’s use restrictions Maddie Capron

DeBoer said he spent his own money to renovate and get the shop ready to open. He cleaned and painted the shop, added new flooring and made other improvements.

“I’m two steps from bankruptcy because of this,” he said. “When they didn’t approve a sign, we didn’t get the business that we anticipated, and we had to work our tails off to do the business that we do now.”

DeBoer said he doesn’t see Granny C’s being in direct competition with Albertsons. He said he’s developed a loyal following offering fresh-baked goods customers can’t get from Albertsons or other shops.

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