Grocery chain QFC takes neighboring University Village to court to block expansion

Grocery chain QFC has sued University Village, saying the shopping center's proposed expansion would obstruct views of its neighboring store and create congestion around the Northeast 45th Street intersection that most QFC customers use.

University Village's plans "will drastically alter its existing complementary design and result in serious negative impacts on the QFC store," which violates long-term agreements the companies have to work together, QFC says in a lawsuit filed in February in King County Superior Court.

QFC accuses University Village of breaching agreements it says they have used for more than 17 years to ensure that their businesses are complementary, and asks the court to prevent the planned expansion.

University Village filed papers Wednesday to move the case to U.S. District Court in Seattle.

The most ambitious version of its expansion plan, filed with the city's Department of Planning and Development, is bigger than a proposal it unveiled two years ago.

The new proposal would increase the shopping center's retail space by as much as 40 percent, up from 25 percent in 2008. It would add up to 158,800 square feet of retail space and 638 additional parking spaces, mostly in multilevel parking garages above new retail stores.

QFC says views of its store would be obstructed by two six-story buildings in University Village's plans, one directly west of the grocery store's front entrance and another along Northeast 45th Street.

The expansion also would eliminate large swaths of surface parking, replacing them with retail space topped by several stories of parking. In its lawsuit, QFC says its customers prefer surface parking to the only parking garage now at University Village, which is at the north end of the development by Crate & Barrel.

Meanwhile, QFC has its own plans to build on surface parking. QFC is owned by Cincinnati-based Kroger, the country's largest retailer after Wal-Mart.

It wants to expand its grocery store by about 35,000 square feet, building south of its current footprint on what is now a small parking lot and, until recently, a liquor store.

The liquor store moved about a mile north in anticipation of the development.

QFC also plans to build on a much larger parking lot it owns north of the store, creating two levels of parking and retail space topped by about 375 residential units, either condos or apartments, said spokeswoman Kristin Maas.

Altogether, it would reach as high as six stories and include 697 parking spaces. The surface lot now has 410 spaces.

Susie Plummer, University Village's general manager, declined to answer questions regarding QFC on advice of attorneys.

Together, University Village and QFC plan to add more than 200,000 square feet of retail space and hundreds of parking spaces to their combined footprint.

University Village wants to break ground next year; QFC has not disclosed its time frame.

Community groups wish the property owners would work together.

"We'd hoped they'd work in a cooperative manner to address all transportation, traffic and parking needs," said Jeannie Hale, president of the Laurelhurst Community Club.

— Melissa Allison

Macy's will exclusively carry a new juniors apparel and accessories collection designed by pop icon Madonna and her daughter, Lourdes, in partnership with Iconix Brand Group. Called Material Girl, it's set to debut this August on the Web and in about 200 Macy's stores, or about a fourth of the chain, with prices ranging from $12 to $40. Macy's will know in May which Seattle-area locations will carry it, said spokesman Jim Sluzewski. — AM

After three years, American Eagle Outfitters is pulling the plug on its Martin + Osa clothing chain for men and women in their mid-30s. The Pennsylvania-based company said it hopes to close all of the chain's 28 stores by the end of July. No word yet on when the Bellevue Square location will close. — AM

Costco Wholesale this week promoted John McKay to executive vice president in charge of its northern division, replacing Doug Schutt, who recently became executive vice president of merchandising and now reports to newly appointed President Craig Jelinek. McKay had been senior vice president in charge of the Northwest region. — MA

Amazon.com is giving $25 gift certificates to customers who tried to buy comic books but couldn't after a pricing error caused a buying frenzy. Because of unintended price cuts, "we sold many more graphic novels than expected," Amazon said in an e-mail to customers. "In fact, we completely sold out — we don't have any in stock right now, and we're not sure when we'll be able to get more." Word that Amazon was selling some comic books at a discount quickly spread online after the Bleeding Cool blog broke the news this past weekend. — AM

Ferdinando Frescobaldi, president of Frescobaldi wines and a member of the Frescobaldi family of Tuscany, will be the honorary vintner at Italia! Vino Arte, the 19th annual International Wine Auction for the Arts on May 22 at the Sheraton Seattle Hotel. The event is a fundraiser for the nonprofit Poncho, Patrons of Northwest Civic, Cultural and Charitable Organizations. Its auctioneer this year will be Fritz Hatton, founder of Arietta Wines in Napa, Calif. — MA

Retail Report appears Fridays. Amy Martinez covers goods, services and online retail. She can be reached at 206-464-2923 or amartinez@seattletimes.com. Melissa Allison covers the food and beverage industry. She can be reached at 206-464-3312 or mallison@seattletimes.com.