The Cupertino Courier

Contention over Kmart location continues

By Pam Marino

Legal controversies swirling around the old Kmart store are keeping it empty until a judge determines later this year who gets control of the shopping center.

Home Depot U.S.A. Inc. officials claim that a building in the shopping center at the corner of De Anza Boulevard and Bollinger Road should be theirs. Lucky Food Stores has also staked a claim. And one tenant, the Sh Boom nightclub, refuses to leave, which is part of what started legal entanglements in the first place.

The property owners--John, Stephen, Michael and Mary Vidovich, and the Brown Family Partnership--are now locked in a legal battle with Home Depot. Both sides are asking a judge to rule on an agreement the two sides signed in December 1995.

If Home Depot wins, it will eventually be able to tear down the existing center and build a warehouse store, much to the dismay of Cupertino residents who live immediately behind the site, as well as Cupertino hardware and nursery businesses that will be forced to go head to head with the home improvement giant.

If the property owners win, Lucky Food Stores will remodel the existing building and move its Cupertino Lucky, located just down the street on De Anza, into the new store.

The lawsuit, filed by the property owners in November 1997, is expected to go before a judge at the end of March.

The legal odyssey began with the agreement signed in December 1995, which gave Home Depot the right to develop the corner into a warehouse store after Kmart left in January 1996.

The property owners, who had paid Kmart $1.5 million to break its lease, began negotiating with the other tenants, Walgreens and Sh Boom, to leave.

Walgreens agreed to go and has since cemented plans to open a new store in Cupertino several blocks down Bollinger. But Sh Boom's owner, Peter Hurt, refuses to leave. In a $1 million lawsuit Hurt filed and won in 1996, the property owners and Kmart--which had subleased part of its space to the nightclub--had in effect tried to bully him into leaving. Hurt's lease expires in 1999.

Recent court documents filed by Home Depot show that the property owners tried to end their agreement with Home Depot in September 1996. According to the documents, the property owners let Home Depot know that they were unable to remove Sh Boom, and that they had plans to lease part of the building to another company.

Home Depot's attorneys contend that the store has a "right of first refusal." In other words, Home Depot gets first dibs on the site, no matter who the property owners want to do business with. The suit filed by the property owners contends that Home Depot has no such right.

Lucky Food Stores is not mentioned by name in the court documents, but last year that company requested, and received, a building permit from the city of San Jose to build a 62,451-square-foot Lucky and a Sav-On drugstore.

Home Depot also asked for, and received, a building permit last year for a 130,000-square-foot store.

All sides involved in the legal actions either declined to comment because of the pending litigation or did not return phone calls.

In March of last year Cupertino residents told San Jose officials at a special meeting that they were against both Home Depot and Lucky, because the trucks and loading docks adjacent to their homes would degrade their quality of life.

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