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The Honolulu Advertiser
Updated at 3:55 p.m., Wednesday, April 23, 2008

Longs tries to halt Maui Walgreens pharmacy opening

By Harry Eagar
The Maui News

LAHAINA — Longs Drugs is going to court to try to stop Walgreens from opening its first pharmacy on Maui — on a lot across the highway from the Lahaina Longs store in the Lahaina Cannery Mall.

Construction on a lot at the corner of Honoapiilani Highway and Keawe Street began in November. Based on previous announcements, Walgreens planned to open for business late this year.

In a complaint filed in 2nd Circuit Court, Longs Drug Stores California Inc. claims that an exclusivity clause in its lease at Lahaina Cannery Mall forbids the landowner from allowing any other pharmacy or business that hires a registered pharmacist to open unless Longs is first offered a chance to buy the property.

The suit says that if it is offered "reasonable commercial terms," Longs "was or is prepared to accept the offer."

But, Longs says, the successors to Hawaii Omori Corp. have not made that offer.

Longs also says the landowners are required to sue Walgreens to protect Longs interests, and they haven't done that either.

Walgreens refused to take questions.

Longs is one of two anchor tenants at Lahaina Cannery Mall and was an original lessee back in 1984, before the shopping center was built.

As an inducement to take up the lease, the suit says, Hawaii Omori offered certain exclusive rights to Longs. These were not limited to the prescription drug business. Longs also was protected from having large restaurants open nearby.

Such agreements are not uncommon. Longs has one with Maui Mall, too.

Walgreens is not building at Lahaina Cannery Mall. Its lot is on the southeast corner mauka of the intersection on land that was also originally owned by Hawaii Omori.

This area is rapidly being developed as commercial condominiums, the Lahaina Gateway shopping center and freestanding businesses like Walgreens, which has said it intends to build four stores on Maui.

But, the suit says, when Omori began its development, all this land was one lot. Clauses in the lease required the covenants with the tenant to run with the land if it changed hands.

It has, several times, and been subdivided. The owner of the Walgreens lot is named as CFT-Hawaii LLC. No such company is listed in state business records, but there is a CFT of Lahaina Inc., a unit of CFT, a real estate investment firm in Rosemead, Calif. The California firm could not be reached for comment.

The lawsuit alleges breach of contract, breach of covenant and promissory equitable estoppel.

Lahaina Cannery Mall also is named as a defendant.

The suit alleges that Longs may suffer not only losses in business but damage to its brand and reputation if Walgreens opens. Besides damages, it seeks an injunction to stop the store from opening.

Harry Eagar can be reached at heagar@mauinews.com.

For more Maui news, visit The Maui News at www.MauiNews.com.