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Sunday, 09/30/2007 9:46:52 AM

Sunday, September 30, 2007 9:46:52 AM

Developers wage legal war over Hacketts lease.
From: Watertown Daily Times (Watertown, NY) Date: December 13, 2006

Byline: Brian Kelly

Dec. 13--The owners of a building that houses a furniture store in the former Northland Plaza are asking a judge to cancel the lease an adjacent property owner has with Hacketts department store, claiming Hackett's is a competitor in the retail furniture business.

Vogel Properties Watertown LLC, Utica, filed a state Supreme Court lawsuit Friday at the Jefferson County Clerk's office against Watertown Center Development LLC, New Hartford, claiming WCD violated a deed restriction by allowing Hacketts to open in the plaza.

WCD bought the former Northland Plaza at Eastern Boulevard and State Street from New Plan Excel Realty Trust Inc., New York City, in November 2005 for $2.3 million. At the time, vacany rates in the plaza hovered around 70 percent. The company renamed the plaza Watertown Center.

WCD subdivided the property, including the former site of the A&P grocery store, which had been empty since 1993. It sold that building in December 2005 to Vogel Properties for $150,000, according to documents at the county clerk's office. Vogel now leases the building to Affordable Furniture.

As part of the sale, WCD and Vogel agreed to a restrictive covenant stating that, as long as a furniture store was operating in the Vogel property, no other retailer or wholesaler of furniture or bedding would be allowed in the plaza.

In October, Hacketts opened in the WCD-owned site of the former Ames store, which had closed in 2002. In addition to an array of household items, Hacketts sells clothing, crafts, toys, tools and hardware. The furniture department consists primarily of a handful of curio cabinets and grandfather clocks, as well as a small selection of tables and dressers.

Vogel contends that WCD's lease with Hackett's is a breach of the deed convenant because Hacketts sells the furniture. It is asking a judge for a temporary restraining order and preliminary injunction preventing WCD from leasing to any business that offers furniture. It is also seeking an order canceling Hacketts' lease, as well as a permanent order preventing WCD from renting to a furniture retailer.

Hacketts, which is based in Ogdensburg and has stores in Canton, Potsdam and Massena, is also named as a defendant in the suit, but only because of the potential effect the litigation could have on its operations, according to court documents. Vogel is not seeking monetary damage from either WCD or Hacketts.

Randolph B. "Randy" Soggs, managing member of WCD, said Tuesday that he had not seen the lawsuit and therefore did not want to comment on any specific aspect of it. He said he had not received any communication from Vogel about a potential problem with Hacketts' tenancy.

"I just think it's sad to see that litigation is the venue we're using to resolve this," he said. "Here we are, trying to build Watertown up, and someone is trying to tear it down."

The suit is not the first time the two sides have tangled in court over the same deed restriction. In August, Vogel filed suit against WCD over a lease extension WCD provided North Country Rent-To-Own, a tenant it had inherited from New Plan.

Rent-To-Own's lease was due to expire next April, but WCD moved the business to a larger location in the plaza and extended its lease until 2011. Vogel claimed that, while the pre-existing lease may have been exempt from the disputed restrictive covenant, any modification or extension of it was not.

Vogel argued that Rent-To-Own was a retailer of furniture, thus a competitor forbidden under the covenant. WCD countered that the business was not a seller of furniture, but a "lessor," and that its move to a new location represented a "reconfiguration of existing space" to accomodate an existing tenant.

Judge Joseph D. McGuire has issued a preliminary injunction in that matter preventing WCD from extending Rent-To-Own's lease past April 1, pending a trial or other determination in the matter.

To see more of the Watertown Daily Times, or to subscribe to the newspaper, go to http://www.wdt.net.

Copyright (c) 2006, Watertown Daily Times, N.Y.

Distributed by McClatchy-Tribune Business

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