Burroughs & Chapin sued over Myrtle Beach grocery store locations

Lowes Foods is suing Burroughs & Chapin Co. Inc. in federal court claiming the Myrtle Beach development company violated the lease agreement by not preventing the construction of a competing supermarket within two miles.

The Lowes at the Grande Dunes Marketplace on Cipriana Drive is less than one mile from the site of a new Publix under construction on the corner of 82nd Avenue North and North Kings Highway in Myrtle Beach, according to court documents.

“Lowes would not have entered into the lease without this provision” of not allowing another grocery store opening within two miles, Lowes said in the lawsuit filed in the U.S. District Court for the District of South Carolina in Florence.

The Grand Strand has seen a flurry of new grocery stores open in the past five years, including the arrival of Publix, Wal-Mart Neighborhood Market and Fresh Market. Publix entered the market in 2014 and has two locations -- in Coastal North Town Center in North Myrtle Beach and in Pawleys Island -- with several more in the works, including another one in Myrtle Beach at U.S. 17 Bypass and Coventry Boulevard and one in Carolina Forest.

Lowes has several locations, including stores in the Shoppes of South Strand Commons off S.C. 544 and the Shoppes at Tournament Boulevard off S.C. 707 in Murrells Inlet -- two commercial complexes that are owned by B&C, according to B&C’s website.

Lowes signed the 20-year lease with B&C for the Grande Dunes location in November 2006. In addition to a monthly rent of $71,000, Lowes agreed to pay B&C one percent of their sales above $85 million, according to the lawsuit.

Lowes is asking the court to release it from the lease and has asked for a jury trial. B&C says in the court documents that it cannot be held responsible for the location of the new Publix because it no longer owns or controls that property.

In December 2013, B&C sold a substantial amount of its property within the Grande Dunes development to LStar Management, including the tract upon which the 45,000-square-foot Publix will open this summer.

Lowes says in the lawsuit that B&C should have prevented LStar from building a competing grocery store.

“Defendants knew that Lowes wold not have entered into the lease without the protection afforded by that (radius) provision,” the lawsuit said.

“Defendants breached their contractual obligations under the lease by directly or indirectly developing a supermarket, through the sale of the new development to LStar, on property within a two-mile radius of the premises,” the lawsuit said.

Lei Gainer, spokeswoman for B&C, said the company does not comment on pending litigation.

This story was originally published February 8, 2016 at 5:38 PM with the headline "Burroughs & Chapin sued over Myrtle Beach grocery store locations."