Olympus Hills Shopping Center Ltd. has filed suit against Smith's Food & Drug Centers Inc., accusing the supermarket chain of breaching a lease agreement with the center and devising a "deceitful" plan to relocate about one mile from Olympus Hills.
The lawsuit, filed in 3rd District Court Friday, says Smith's devised a "calculated and deceitful plan" to terminate its lease and move several blocks northwest to 3171 E. 3300 South, where a Skaggs Alpha Beta store had been located.The complaint further says Smith's Food and Drug is the anchor tenant of the Olympus Hills Shopping Center, 4000 S. Wasatch Blvd., and its departure will allegedly cause severe financial harm to the shopping center through loss of rent, a loss in the property's value and the loss of development and improvement costs in the shopping center.
Olympus Hills also accuses Smith's of unfair and illegal competition by relocating and remaining in direct competition with all tenants at the shopping center.
In addition to an injunction prohibiting Smith's from making the move, Olympus Hills seeks $10 million in damages, $5 million in punitive damages and attorney's fees.
Smith's corporate counsel Peter Barth said the company is reserving comment on the suit until it reviews the complaint.
The current lease between Smith's and the shopping center is for 30 years, beginning March 1985, the suit said.
Olympus Hills was basing future developments and negotiating with potential tenants on the assumption that Smith's would remain as the anchor tenant and principal traffic generator, the suit said.
But rumors about Smith's moving its store have caused potential tenants to reconsider locating at Olympus Hills, the suit said.
According to the complaint, the rumors were floated by Smith's in late December 1989 within the commercial leasing market. When Olympus Hills alerted Smith's management to the damage the rumors were causing, the complaint said, supermarket officials said that no decision had been made and no public announcement would be made before notifying Olympus Hills.
However, a March 7 letter distributed to Smith's customers said that "Skaggs Alpha Beta has decided to leave the Salt Lake market, selling most of its stores to Smith's Food & Drug Centers Inc., including their store on 3300 South and 3300 East.
"Unfortunately, Smith's cannot profitably operate both the Alpha Beta store and our present Mt. Olympus store. . . . So we have decided to completely remodel the larger Alpha Beta store, making it one of Smith's finest new facilities, and close our present store some time in May."