Official opposed Smart & Final taking over lease to replace Haggen, documents show

The managing general partner of a Summerlin shopping center objected to Smart & Final taking over a lease to replace Haggen, according to bankruptcy court documents.

That revelation came as the U.S. Bankruptcy Court in Delaware this week approved, as expected, Haggen's sale of three of its stores in Henderson to Albertsons and one of its stores in the northwest valley to Sprouts Farmers Market. Haggen, which announced the sale earlier this month, announced the latest court proceedings on Wednesday.

The Haggen announcement made no mention of its failed attempt to sell its lease rights at Trails Village Center, 1940 Village Center Circle, to Smart & Final, a warehouse-style supermarket. Smart & Final announced last week it's not acquiring the Summerlin store.

Court filings, however, have shed more light on why the sale apparently failed to go through as planned.

Haggen acquired the former Vons store in Summerlin earlier this year as part of a larger acquisition of three Albertsons and four Vons in Southern Nevada. That was part of a divestment required by the Federal Trade Commission under a merger of Albertsons and Safeway.

In its court filings, Trails Village Center, said the Vons lease required an "upper scale, full-service supermarket" in 56,000 square feet. That meant a bakery, meat, seafood, floral, deli and other components that Smart & Final did not plan to have, the legal filing said.

"Smart & Final intends to operate a discount warehouse grocery at Trails Village Center occupying half the square footage of the space in the store," said James Christensen, managing member of Investment Properties II, the managing general partner of Trails Village Center.

Christensen, who is based in Southern California, did not return calls for comment but his office said last week that an announcement of what would be located in the center is forthcoming and that it would be "good news." The Haggen store in Summerlin closed last week and the other six Haggen stores will close by Dec. 6, according to a Haggen employee.

Last week, supermarket analyst David Livingston raised the issue of a failed sale because of objections by tenants and ownership over Smart & Final not being a full-service grocer. Under most leases, a shopping center would have to lower rents if there wasn't a full-service grocer, he said.

Trails Village Center with more than 47 stores in 174,000 square feet caters to more than 25,000 residents with an average household income of more than $100,000, the court filing said.

"It set an upscale tone and attracted customers that benefited other stores and businesses in the center," the court filing said. "The Trails Village store was one of Vons top volume stores in the state of Nevada and their overall chain and generated lucrative profits."

Haggen is exiting the Las Vegas market after opening seven stores under the Haggen brand in June as part of a larger acquisition of 146 stores in Oregon, Washington, California, Arizona and Nevada.

The three former Albertsons stores sold to Haggen and slated to reopen under the Albertsons brand are in Henderson at 2910 Bicentennial Parkway, 575 College Drive and 190 N. Boulder Highway.

A fourth Haggen store is slated to reopen as a Sprouts Farmers Market. It's a former Vons at 7530 W. Lake Mead Blvd.

Sprouts declined to comment on when its new store will open.

In a statement released Wednesday, Albertsons said it's acquired 30 former Haggen stores in California, Washington, Arizona, Oregon and Nevada. It said it plans on closing the sales in the coming weeks and will re-open the stores in 2016 under its different brands without giving an exact timetable.

"We are pleased to be returning to these locations and have the opportunity to create great jobs in these communities," said Bob Miller, Albertsons chairman and chief executive officer in a statement. "The process of re-opening these stores as Albertsons, Safeway and Vons locations will take some time for us to obtain the appropriate licenses, but we are confident that our operating playbook will help us create stores that customers will love to shop again."