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Cabela's sues over failed plans for Erie-area storeApr 27, 2013 (Erie Times-News - McClatchy-Tribune Information Services via COMTEX) -- Cabela's officials remained mum when news broke that a deal to develop a Cabela's Outpost store in the Erie area had collapsed in late March. The Nebraska-based outdoor outfitting company is breaking its silence in a lawsuit filed in U.S. District Court in Erie. Cabela's Wholesale Inc. is claiming its would-be local development partners -- Millcreek Marketplace LLC, of Erie, and the Cafaro Co., of Youngstown, Ohio -- fraudulently induced Cabela's into investing in a Millcreek Township development plan so the partners could leverage a deal for the same or nearby site with an unidentified third party. In the suit, Cabela's claims it spent more than $400,000 negotiating the lease, preparing construction plans and developing an engineering solution to a stormwater drainage problem at the Millcreek Marketplace site, south of the Millcreek Mall -- only to have Cafaro and Millcreek Marketplace LLC back out of the deal in its very last stages because of a lease with another retailer. Cabela's said the real estate developers' action cost Cabela's $400,000 and the business opportunity "of opening a store in the highly desirable Erie market." No suitable alternative site for a Cabela's store in the Erie area has been located, according to the complaint, docketed Friday and assigned to Chief U.S. District Judge Sean J. McLaughlin. The four-count complaint includes claims of tortious interference and fraudulent and negligent misrepresentation. It seeks damages for what it claims was the defendants' "wrongful inducement" to get Cabela's to develop a store at the Millcreek Marketplace site. Cabela's is not seeking to stop development at the site where it had planned to build. New plans are moving ahead for the Millcreek Marketplace site, though officials are not commenting on who those tenants will be. The Millcreek Township Planning Commission is set on May 14 to review plans for two new retail stores at Millcreek Marketplace, the larger of which is proposed for the former Cabela's site. Jack Munch, director of leasing and development for Erie-based Baldwin Brothers Inc., which is the leasing agent for Millcreek Marketplace, said the company does not comment on litigation. Millcreek Marketplace LLC is owned by members of the Baldwin and Cafaro families. The Cafaro Co. owns the Millcreek Mall complex. A spokesman for the Cafaro Co., Joe Bell, said the company would have no comment. Lawyer Thomas Birsic, of Pittsburgh, filed the suit on behalf of Cabela's. He said he could not immediately comment. Cabela's operates at least 35 stores in the United States and three in Canada, with more planned. The suit follows a confusing series of events that began when Millcreek officials announced March 25 that one of the popular Cabela's outdoors stores would be built at the Millcreek Marketplace, just southeast of Buffalo Wild Wings restaurant. About two weeks later, Millcreek Supervisor Brian McGrath announced there would be no store because the parties had been unable to reach a deal. Plans had called for a 42,392-square-foot retail store to sell hunting, fishing, camping and other outdoors equipment. At that time, Cabela's had no public comment, and the Baldwin Brothers' Munch said the parties did not "come together" on a deal. He expressed regret. "We're disappointed. We would have loved to bring them to town," he told the Erie Times-News. The suit claims Cabela's began investigating possible development sites in Erie in 2011 and eventually focused on three sites -- the Millcreek Mall, the Millcreek Pavilion, which is a complex adjacent to the mall, and the Millcreek Marketplace. The suit says the pavilion site, which also houses Dick's Sporting Goods and Gander Mountain, was the first to be eliminated as an option. Two of Cabela's competitors, which the suit does not name, were located in the pavilion, and contract language with one or both of them barred Cafaro from leasing pavilion real estate to Cabela's, the complaint claims. Cabela's says a Cafaro official, Nick Morgione, and Gregory Baldwin, of Baldwin Brothers, both assured Cabela's officials that no such contract language would bar the companies from leasing to Cabela's at either the mall or the Millcreek Marketplace sites. Cabela's said it eventually settled on the Marketplace site as the best option because of its highway access, visibility and other features. In June 2012, the parties began negotiating a letter of intent for the Millcreek Marketplace site, and Baldwin, Cabela's claims, assured Cabela's a "final lease was imminent." Cabela's said it then drafted a site plan and did market research to ensure the development would be "financially worthwhile." When Baldwin Brothers flagged a stormwater management issue at the site, Cabela's engineers devised a solution, the company said in the suit. In February, Cabela's and Baldwin Brothers signed a letter of intent describing the general terms of the impending lease, then began exchanging drafts of the lease in March, according to the suit. On March 27, Cabela's said its representative, Gary Rimington, asked to schedule a phone call to finalize the lease. In late March, Baldwin called instead to say that Millcreek Marketplace no longer wanted to pursue a lease with Cabela's. "According to Mr. Baldwin, Cafaro had entered into a contract with an unknown third party that, by its terms, prohibited Millcreek Marketplace from leasing the Marketplace site to Cabela's Wholesale," the complaint states. Cabela's said its representative, Jamie Gull, was "shocked and disturbed" by the news and asked Baldwin for an explanation, which he refused to provide, according to the suit. Baldwin, according to the suit, said only that the decision was out of his hands and that Cafaro had to approve all leases for the Marketplace site. According to the complaint, Baldwin told Gull he was "not pleased" and that he "could not believe that Cafaro had put him in such a difficult position." LISA THOMPSON can be reached at 870-1802 or by e-mail. Follow her on Twitter at twitter.com/ETNthompson. ED PALATTELLA can be reached at 870-1813 or [email protected]. Follow him on Twitter at twitter.com/ETNpalattella. ___ (c)2013 the Erie Times-News (Erie, Pa.) Visit the Erie Times-News (Erie, Pa.) at www.GoErie.com Distributed by MCT Information Services |