Advertisement - Click to support our sponsors.

Grove Farm
leases disputed
building to Sears

The retailer wants to use
the property for expansion

---

By Tim Ruel
Star-Bulletin

Major Kauai landowner Grove Farm Co. has leased a 41,000-square-foot building in Lihue -- already the subject of a lawsuit over previous lease negotiations -- to retailer Sears, Roebuck & Co.

Sears and Grove Farm signed the lease last month, and the retailer expects to move in by December, Sears' Sheldon Life said yesterday.

The building is on Grove Farm land in the Kukui Grove Shopping Center on Kaumualii Highway. The previous tenant, Woolworth Corp., closed all of its 13 stores in Hawaii in 1997.

Sears already owns a hardware store next door to the building it is leasing, and wants to open a second store to sell "softer" goods, such as clothing, furniture and bedding, said Life, the hardware store's manager.

The lease deal, however, troubles Scott Wallace, chief executive of Wallace Theater Corp., which sued Grove Farm on March 16, 1999. Wallace Theater alleges Grove Farm breached a 1997 contract to lease the building to Wallace for a movie theater.

Earlier this year, a judge threw out some of the charges, but other claims for damages are still in litigation, said Jerry Hiatt, attorney for Wallace.

Wallace Theater, based in Portland, Ore., is seeking special and punitive damages. The suit is in the fact-finding stage of discovery, and a trial date has not been set.

Hiatt said there is a question about Grove Farm's ability to lease the litigated property to Sears.

Property manager Steve Crain would not comment on the suit, nor would Hugh Klebahn, Grove Farm chairman and chief executive.

Robert Wise, regional property manager for Hoffman Estates, Ill.-based Sears, said the lease with Grove Farm protects Sears against any negative effects of a suit, and the retailer is not concerned about the litigation.

Wise said lawsuits occur all the time in the real estate business.

Grove Farm, one of the Garden Island's biggest private landowners with more than 22,000 acres, has also been on the selling block recently.

The owner of former sugar land on the east and south sides of Kauai confirmed it was in talks last month to sell the company to the developer of the King Kalakaua Plaza in Waikiki. The talks later broke off.

Previously, Grove Farm shareholders rejected a $21 million buyout offer from mainland Internet executive Scott Blum, who is Klebahn's son-in-law.