Laurel Village's City Market has lost its legal battle to hold on to its 1240 Hennepin Ave. S. space.
Hennepin County District Judge E. Anne McKinsey has ruled against the Downtown grocer in its lawsuit against Golden Valley-based Great Lakes Management Co., Laurel Village's manager.
The grocer sued the property management group in December 2003 over a lease dispute. The two sides were at odds over whether City Market properly renewed its lease for another five-year term in the three-block apartment complex on Hennepin Avenue between 12th and 15th streets in Loring Park.
In her 20-page order issued last week, McKinsey ruled against City Market's claim and ordered the grocer to leave the space within 30 days, said Nick Kaster, a law clerk for the Hennepin County District Court judge.
The order means City Market has to move out of the space by the end of August.
A new tenant has not been secured for the space, said Michael Pagh, president of Great Lakes Management. Other Laurel Village vacancies include the former City Liquors space next to City Market and the Dish space at 13th Street & LaSalle Avenue.
He said the property management group is having discussions with potential tenants for the space and its other vacant storefronts along Hennepin Avenue.
"We are purely in discussions at this point," Pagh said.
He called the lawsuit an "unfortunate" outcome of the lease dispute. "It didn't have to end this way," he said.
City Market, a family-owned grocery business owned by brothers Brad and Brian Hansen, has been in the neighborhood for 50 years. The brothers' uncle, Del Bauers, first opened a grocery store at the corner of South 13th Street & Hennepin where Espresso Royale Caff/, 1229 Hennepin Ave. S., now stands.
The Hansens did not return phone calls for comment.
The area's City Councilmember Lisa Goodman (7th Ward), who lives in a condo near City Market, said she would like to see Laurel Village add a high-end, full-service grocery store such as a Lund's or the California-based chain Trader Joe's.
Michelle Croteau, a spokeswoman for Lund Food Holdings, said the space would likely be too small for a full-service Lund's. The complex is also short on parking.
The site might be a better fit for Trader Joe's, a specialty grocer that typically occupies smaller retailer spaces than the typical grocery store chain. The grocer is rumored to be eyeing Downtown spots.
Lund's, meanwhile, is negotiating with developers working on a major redevelopment of the Eastgate strip mall on the riverfront's East Bank. Pending neighborhood and city approvals, the shopping center at Central and University avenues is slated for demolition early next year in preparation for a new upscale mixed-use development.