BIG V HIT BY REAL-ESTATE DEVELOPER LAWSUIT

ELLIOT ZWIEBACH

FLORIDA, N.Y. -- Big V Supermarkets here is being sued by a Yonkers, N.Y.-based real-estate developer for "an ongoing conspiracy of fraudulent, deceptive and manipulative practices" designed to prevent a competing chain from opening a store in a shopping center near a Big V unit.

The complaint was filed in the Supreme Court of the State of New York in Westchester County by Alfred Weissman Real Estate, which is seeking to have a development site in Yonkers rezoned for retail use to accommodate a proposed shopping center.

The complaint outlines Big V's alleged defensive real-estate strategy and claims the retailer has attempted to block competitive openings "in at least 17 similar instances," although it cites only five such examples: opposition to Edwards Super Food Stores in Tuckahoe and North White Plains, N.Y.; a Price Chopper Supermarkets unit in Vails Gate, N.Y.; a Shaw's Supermarkets store in Monroe, N.Y.; and a Wal-Mart in Thomson, N.Y.

In the complaint, Weissman accuses Big V of trying to ensure that competitors' stores do not open "by extending the review process necessary to open competing supermarkets; promoting opposition efforts to delay or deny proposed projects of competitors, and documenting substantive and procedural flaws in support of either a project denial or potential litigation."

The suit, filed July 16, seeks more than $1 million in monetary damages and $1 million in compensatory damages, plus attorneys' fees.

In a statement, Big V said it has not engaged in any illegal activity; it also said it intends "to vigorously fight this lawsuit" and is confident it will prevail.

"As a corporate citizen and a major Yonkers taxpayer, Big V has the right to express an opinion about this project and to ensure that Alfred Weissman Real Estate complies with the governing zoning and regulatory requirements," the company said.

"It is not illegal to ensure that the laws are scrupulously followed, nor is it illegal to voice an opinion on a matter of public concern.

"[Weissman] is using Big V as a scapegoat because [it has] not created a plan that the [Yonkers] City Council believes will be beneficial for the community.

"Over 1,800 Yonkers citizens have expressed their negative opinion through petitions collected and statements made at community meetings.

"The lawsuit was apparently instigated for public relations reasons, not legal ones, [by seeking] to distract the council from the fact there is substantial community opposition to the plan regarding how the project will negatively impact the neighborhood."

According to the complaint, the Yonkers Planning Board rejected Weissman's rezoning proposal May 13 by a vote of four to three, citing concerns about potential traffic congestion.

Weissman's amended development plan, which allocated funds for street expansion, creation of new traffic lanes and installation of new signals, had been scheduled for a planning board hearing Aug. 12, although that agenda item has been canceled, an attorney for Weissman told SN.

Big V operates 32 stores, principally under the ShopRite name, in the Hudson River Valley region of New York state, northeastern Pennsylvania and northwestern New Jersey.

The allegations in the complaint stem from Weissman's desire to develop a shopping center on Tuckahoe Road in Yonkers -- including Stop & Shop as a tenant -- at a site 1 mile from an existing Big V store.

Big V told Weissman it wanted to be the supermarket tenant in the center "[because] it considers the site more financially attractive than its current Tuckahoe Road store, and Big V did not want a competing supermarket in close proximity to" its existing store, the complaint says.

According to the complaint, a Big V representative told Weissman officials "that unless plaintiff leased the supermarket space at the site to Big V, [the representative] guaranteed that plaintiff would never build on the site and that plaintiff would live to regret not leasing the space to Big V."

Weissman subsequently rejected a formal lease proposal from Big V "for economic reasons," the complaint says. "Plaintiff was particularly concerned about Big V's poor credit history and asked if Wakefern Food Corp., the parent company of Big V, would guarantee Big V's financial obligations. Big V refused."

The complaint says Big V's traditional defensive real-estate strategy to prevent competing stores from opening "[is] based on the following economic premise:

"If Big V can delay a competitor's project by spending $5,000 per month on negative campaigning and misinformation, Big V can operate its local stores -- with sales of $600,000 to $700,000 per week -- at an enormous profit many times greater than the cost of financing its negative campaign."

Referring to the 17 instances of alleged disinformation mentioned in the complaint, the attorney for Weissman told SN he wasn't sure how many competitive openings Big V has been able to block, "but simply delaying a project helps Big V maintain its sales," he said.

Under the retailer's strategy, the complaint alleges, fronts for Big V "submit bogus, biased development studies and 'expert' reports in opposition to a competitor's project, purportedly representing local community interests when, in reality, the opposition is based solely upon Big V's ulterior motive to prevent and/or delay a competitor from opening a competing store."

To carry out its defensive real-estate strategy, the complaint says, Big V uses three "henchmen":

* Matthew D. Rudikoff Associates, Beacon, N.Y., to coordinate negative public campaigns. * Suburban Properties -- an alleged shell corporation -- to pass money to Rudikoff and other Big V agents who act as a front for Big V at public hearings.

* James Sweeney, an attorney, to work on "illicit defensive real-estate strategy matters by overpaying him on legitimate matters where he openly represents Big V."

The complaint claims Big V, Rudikoff, Suburban and Sweeney have engaged "in a clandestine negative campaign of misinformation and deceit, financed by Big V, using local groups directed against Weissman Real Estate and the residents of Yonkers, to eliminate any competition from Big V's Tuckahoe Road store."

Rudikoff declined comment on the lawsuit but told SN, "The nature of my review [of the proposed site] raised valid environmental concerns that were presented to the appropriate agencies."

Neither Sweeney nor Suburban Properties could be reached for comment.

According to the complaint, Big V retained Rudikoff in 1996 to impede Weissman's efforts to have a onetime warehouse site in Yonkers rezoned for retail use by engaging in "furtive efforts to subvert plaintiff's project for the site."

The complaint says a group called "The Association to Preserve Tuckahoe Road" -- headed by an alleged Big V employee -- and other grassroots groups were able to get a revision in Yonkers' zoning ordinance that changed Tuckahoe Road from a retail corridor to a mixed-use corridor, which prohibits retail projects like the one proposed by Weissman.

The same groups were also successful in delaying acceptance of the zoning and environmental impact statements submitted by Weissman, according to the complaint.