Case Study – Buie Stoddard Properties

Case Study

Phased Development of Neighborhood Shopping Center

Client: Buie Stoddard Properties

Background: In 2003, HechtSolberg represented an affiliate of Buie Stoddard Properties in developing 4S Village Center, a 53-acre retail center situated in the 2,891-acre 4S Ranch master-planned community in San Diego County. Portions of 4S Village Center were ground leased to a Chevron franchisee for a gas station and convenience store, and to Union Bank for a neighborhood branch office. Several parcels comprised 4S Village Center to ensure flexibility in financing and development. The integrated nature of 4S Village Center was ensured and preserved by the CC&Rs prepared by HechtSolberg.

Challenge: Although 4S Village Center was originally intended and entitled to include an office building, Buie Stoddard Properties decided not to develop the office site right away. In 2007, as market conditions evolved, Fresh & Easy Neighborhood Market, an affiliate of Tesco (one of the world’s largest grocers), expressed interest in leasing the office site to develop one of its unique concept grocery stores as part of its effort to penetrate the Southern California market. Buie Stoddard Properties was interested in leasing to Fresh & Easy but the breadth of use and other requirements reflected in Fresh & Easy’s initial lease draft conflicted with the CC&Rs, the existing use restrictions and the exclusives benefiting existing tenants of 4S Village Center.

Solution: At the outset of negotiations, HechtSolberg oriented Fresh & Easy’s business and legal team to the requirements and constraints dictated by the existing CC&Rs, use restrictions and exclusives. Consistent with the orientation, HechtSolberg negotiated to narrow the issues, re-focusing Fresh & Easy on its core needs rather than all of the wishes identified in its initial draft lease. HechtSolberg revised the CC&Rs to accommodate the grocery store use permitted under the final lease and helped Buie Stoddard Properties develop the strategy to obtain required consents and approvals from existing tenants. By persuading Fresh & Easy to identify and focus on its needs and by framing the negotiations accordingly, HechtSolberg helped Buie Stoddard Properties integrate Fresh & Easy into 4S Village Center on terms and conditions that did not disrupt or offend existing tenancies and operations.