Delco Files Lawsuit To Overturn Rezoning Of Lewis Oil Property

By Alice M. Peckelis
(appeared in the 8-24-01, Vol 11, No. 8 edition)

The following text appeared as the caption to the article:
With the bankruptcy of Grand Union Supermarket In the Delco Shopping Center, a cross operating agreement between Delco and Lewis Oil to operate a unified shopping center on Shore Road is now null and void. Last January, the Village of Port Washington North approved a zone change for Lewis Oil to erect a shopping center but did not formally require that the two centers merge. Delco and Stop & Shop Supermarkets, which succeeded in interest to the Grand Union lease, have filed suit against Lewis Oil and the Village of Port Washington North to overturn the rezoning.

The Article is presented below:

A lawsuit has been filed in State Supreme Court by Delco Development Company and Stop & Shop Supermarket Company against the Village of Port Washington North and Lewis Oil Company to overturn a rezoning application approved in January to permit the construction of a shopping center on the Lewis Oil property on Shore Road. Although it was not a condition of the zone change, the Board of Trustees approved the application with the understanding that Lewis Oil would join forces with Delco to create one unified shopping center.

That scenario changed, however, when the Grand Union Supermarket chain filed for bankruptcy and closed its store in the Delco Shopping Center. (Stop & Shop, one of the plaintiffs in the lawsuit, is the successor in interest to the lease between Grand Union and Delco). Last October, prior to the change of zone from Economic Development A to Business, Delco, Lewis Oil and Grand Union entered into a Development and Reciprocal Cross Operating Easement which provided that both the Delco and Lewis Oil properties be developed as a single 131,740 square foot shopping center, including a 69,3 19 square foot supermarket, sharing a common means of ingress and egress as depicted on an approved site plan dated July 29, 1999, which site plan was subsequently amended on August 20, 1999. That site plan and easement agreement provided that Grand Union relocate from its existing location in the Delco Shopping Center to a new site on the Lewis Oil property.

However, under the terms of the easement agreement, once Grand Union filed for bankruptcy, the obligations of the parties terminated.

Since the easement agreement is now null and void, both Delco and Stop & Shop are concerned that Lewis Oil plans to proceed to construct a shopping center separate and apart from Delco.

Delco emphasizes in its lawsuit that two separate shopping centers were not envisioned when the Board of Trustees approved the change in zone. Indeed, it notes the findings of JAC Planning Corp., retained by the Board to develop overall land use recommendations in the Village which urged that the two properties not be developed separately.

The lawsuit may be moot, however. Mayor Thomas Pellegrino advised at the August 13th Board of Trustees meeting that he had spoken the previous week to Jerry Kaniac, principal of Delco, who stated that they are near hammering out a new agreement. In the meantime, an "Available" sign posted at the front of the Delco Shopping Center when the lawsuit commenced has since been taken down.