SHUT OUT IN SOUTH BAY: Asian supermarket sealed off from customer traffic by mall owners in contract dispute

By 
Lauren Dezenski, Reporter Staff
Jun. 10, 2014

The Kam Man supermarket on Allstate Road has been sealed off from customers and deliveries by the owners of the nearby South Bay Center, the result of a dispute between the two parties over a lease agreement. Photo by Bill Forry

Large concrete barriers and a fence blocking access to the Kam Man Farmers Market from Allstate Road into South Bay Center are the most obvious pieces of evidence in what has become a pitched legal battle between the supermarket and the owners of the shopping center next door. The standoff, which has effectively shuttered the popular Asian-American market, has spilled into the city’s courtrooms and civic meeting halls – with each side lobbing allegations about contractual obligations and ulterior motives at the other.

The latest flashpoint in the dispute was an attempt by the Kam Man operators to open a Dollar Store within the building, a move that E&A Northeast Limited Partnership— the company that owns South Bay Center — has long opposed.

On the night of April 22, jersey barriers were installed at the entrance to Kam Man’s parking lot, which is located at 95-101 Allstate Rd., sealing it off from customers and deliveries. The next day, Kam Man’s sales plunged from a daily average of between $15,000 and $20,000 to $684.21. The barriers along Allstate Road remain in place as lawyers for both sides square off downtown.

“Under the agreement, we have the right to close off the egresses, so we did,” said Kevin O’Flaherty, an attorney with Goulston & Storrs, which represents E&A. “We warned them that we would enforce our rights. We erected our barriers on our property. We believe we did nothing wrong.”

Lawyers for Kam Man filed a motion on April 28 in Suffolk Superior Court seeking the removal of the barriers and noting that they created “irreparable harm” for the business. “E&A’s installation of the barriers is nothing more than an aggressive ploy aimed at acquiring the property,” Kam Man’s lawyers wrote in an appeal, filed on June 5, after Suffolk County Superior Court Justice Peter M. Lauriat denied their initial motion on May 12. Should the business close permanently, 45 employees would lose their jobs.

In response to Kam Man’s April motion, E&A argued that subletting space to the Dollar Store was a clear violation of a 2011 lease agreement that Kam Man assumed from a previous tenant, the Super 88 supermaket. According to court documents, E&A agreed to allow Super 88 to use the access road in exchange for $50,000 annually for 20 years but with certain restrictions, including limiting the total area of the building and restricting certain commercial use within the building itself.

The restrictions detail a maximum square footage for the supermarket area as well as a specific ban on food sales in any sort of additional retail space within the building that would be leased out to another vendor. The agreement states that if Super 88 at any point violated the agreement, E&A had the right to block the entrance to Kam Man.

Though Kam Man is adjacent to South Bay Center and not in a building owned by E&A, the property is only accessible via Allstate Road, which is primarily owned by E&A. Kam Man leases the building from the Marr Realty Trust, which has a claim on just 20 feet of Allstate Road right outside of the building. The Marr Trust did not return requests for comment from the Reporter.

“If any of the agreements were violated, the Easement Agreement provides that E&A would have the immediate right to shut down the easement and block the point of Super 88’s access to the South Bay Center roadway system and access driveway,” O’Flaherty wrote in E&A’s response to Kam Man’s motion to remove the barriers.

As part of its $2 million purchase of the building lease from Super 88, Kam Man assumed Super 88’s lease, including the agreement, and the $50,000 annual payments, on the use of Allstate Road. The supermarket opened in 2012.

Last November, Kam Man sought to bring in a Dollar Tree store to the building and submitted plans for building permits to the city’s Inspectional Services Department that included one for a 10,000-square-foot space for freezers and coolers. The gross area for the supermarket and Dollar Tree was listed as 71,033 square feet, somewhat above Super 88 and E&A’s initial agreement’s maximum of 68,639 square feet.

In February of this year, Kam Man advised E&A of its plans to renovate and expand its building, including the sublease with Dollar Tree. E&A’s lawyers responded by noting that the plans violated the retail and maximum space restrictions.

During March, Kam Man and E&A met to discuss E&A’s concerns with Kam Man’s proposal. Shortly thereafter, E&A offered to purchase the building from Kam Man for $2.5 million, an offer that Kam Man turned down. E&A then cut off access to the building on April 22.

“The customers are confused about the situation. Shortly after Dollar Tree’s signs went up, then the barricades went up,” William Woo, Kam Man’s co-owner, told the Reporter in an interview. He and E&A declined extensive comment on the situation because of the ongoing litigation.

Woo and his counsel attended a recent meeting of the John W. McCormack Civic Association to explain their side of the story to the community, noting that the market hoped to donate the food on its shelves to local food banks so it would not all go to waste.

Desmond Rohan, who sits on the association’s executive board, said he was not familiar with the specific terms of the easement, but “obviously they violated that with the Dollar Tree sublease.” He added, “We don’t want to get involved with the legal aspect, but we want to make sure aesthetics are maintained as well as safety, which is our biggest issue.”

The barriers in place prevent any and all vehicles from accessing the building, said Rohan, though construction has gone quiet. If a fire ever broke out, he said, it would be difficult for emergency vehicles to reach the building.

Nevertheless, Woo said he is committed to operating both businesses and looks forward to re-opening. A hearing is scheduled for June 23 in Suffolk Superior Court to reconsider the injunction in place.