Final Tucson Haggen Store Sells to AMERCO for Conversion

U Haul at 8740 E Broadway Blvd, Tucson

TUCSON, Arizona – An affiliate of Comvest Group Holdings sold the final remaining Haggen store in Tucson at 8740 E Broadway Blvd. to AMERCO Real Estate for $2.2 million ($42 PSF). The former Safeway, fetched $3.9 million ($74 PSF) for the 52,566-square-foot anchor building in Broadway East Plaza, at the southeast corner of Broadway and Camino Seco, when Haggen purchased it in 2015.

Comvest, a Florida-based private equity firm, bought a majority stake in Haggen in 2011. In the first two years of ownership, Comvest shrunk the number of stores from around 30 to 18.

In 2014, Safeway agreed to merge with Albertsons and in order to get approval from the Federal Trade Commission, Albertsons was forced to divest some of its stores. Comvest became interested in purchasing 146 of the stores for Haggen, and a deal was announced in December 2014. The purchase price for the 146 stores totaled $309 million, according to court documents.

Expanding from 18 stores to 164 proved to be an “unmitigated disaster” for Haggen, according to court documents. Eight months after the purchase was finalized, the Bellingham-based grocer filed for Chapter 11 bankruptcy. The company closed, auctioned off or sold 135 stores between August 2015 and December 2015, leaving 29 core stores. Those 29 core stores were auctioned off in March to Albertsons, which was the only qualified bidder. The remaining Haggen stores joined Albertsons in June 2016, with 15 stores retained by Comvest.

In November 2015, Albertsons placed a bid on two of the three Haggen stores in Tucson: $1 million for 10380 E. Broadway, a former Safeway, and $700,000 for its former store at 1350 N. Silverbell Road, which was slated to close. The Tucson stores were three of ten in Arizona sold.

The final Broadway property AMERCO purchased was one of the last remaining stores and the final Haggen store in Tucson. The transaction closed January 10, 2017.

Phoenix-based AMERCO Real Estate Co., the development and acquisition arm for U-Haul Company purchased it for conversion to a climate controlled U-Haul self-storage planned for opening in June 2017.

AMERCO looks for big boxes and warehouse properties on major commercial arterial roads, at the edge of new growth areas.

To learn more, see RED Comp #4473.




Haggen Files Suit Against Albertsons for $1 Billion

HaggenHaggen, the West Coast regional grocer, announced Tuesday that the company has filed a lawsuit against Albertsons LLC and Albertsons Holdings LLC (“Albertsons”) seeking more than $1 billion in damages.

The complaint, which was filed in United States District Court for the District of Delaware, alleged that following Haggen’s December 2014 purchase of 146 Albertsons and Safeway stores, Albertsons engaged in “coordinated and systematic efforts to eliminate competition and Haggen as a viable competitor in over 130 local grocery markets in five states,” and “made false representations to both Haggen and the FTC about Albertsons’ commitment to a seamless transformation of the stores into viable competitors under the Haggen banner.”

Albertsons sought out Haggen in order to convince the Federal Trade Commission (“FTC”) that Haggen would be a new competitor in local markets, which enabled Albertsons to gain the FTC’s approval of a merger between Albertsons and Safeway—a merger that created “one of the largest food retailers in the United States, with over 2,200 stores and $61 billion in combined sales,” according to the complaint. Despite the FTC’s orders and Albertsons’ agreement to abide by all conditions of the sale, the complaint alleges, Albertsons engaged in an illegal campaign against Haggen including “premeditated acts of unfair and anti-competitive conduct that were calculated to circumvent Albertsons obligations under federal antitrust laws, FTC orders, and contractual commitments to Haggen, all of which were intended to prevent and delay the successful entry of Haggen (or any other viable competitor) into local grocery markets that Albertsons now dominates.”

“During the transfer process, Albertsons launched its plan to gain market power and/or monopoly power, acting in a manner that was designed to (and did) hamstring Haggen’s ability to successfully operate the Stores after taking ownership,” according to the complaint.  As a result, despite Haggen’s plans to successfully operate and expand upon the acquired stores, Haggen was “forced to close 26 of the Stores that it newly acquired as a part of the Albertsons’ divestiture, and faces the potential closure of additional stores,” the complaint said.

“Albertson’s anti-competitive actions critically damaged the operations, customer service, brand goodwill and profitability of the divested stores from the outset,” the complaint alleged, “[and] have caused significant harm to competition, local communities, employees and consumers,” throughout California, Oregon, Washington, Nevada and Arizona.  Instead of focusing on succeeding in the new markets, according to the complaint, “Haggen has had to focus on strategies to recover from Albertsons’ wrongful acts, which include, sadly, Haggen’s efforts to find new jobs for displaced employees who too are victims of Albertsons’ actions.”

In particular, Haggen alleged in its complaint that Albertsons, in violation of numerous laws, the FTC order and the purchase agreement, intentionally and deliberately undertook a number of “malicious and unfair actions” that “strained Haggen’s resources” and “created substantial distraction and diverted the attention of store-level and senior Haggen management” during the store conversion process, such as:

  • Using proprietary and confidential conversion scheduling information to plan and execute aggressive marketing campaigns intended to undermine Haggen grand openings;
  • Providing Haggen with false, misleading and incomplete retail pricing data, causing Haggen stores to unknowingly inflate prices;
  • Cutting off Haggen-acquired store advertising in order to decrease customer traffic;
  • Timing the remodeling and rebranding of its retained stores to impair Haggen’s entry into the relevant markets;
  • Diverting customers by illegally accessing Haggen’s confidential data to gain an unfair competitive advantage;
  • Deliberately understocking certain inventory at Haggen-acquired stores below levels consistent with the ordinary course of business just prior to conversion, resulting in out of stocks which negatively impacted the shopping experience upon Haggen grand openings;
  • Deliberately overstocking perishable inventory at Haggen-acquired stores beyond levels consistent with the ordinary course of business just prior to conversion such that Haggen had to throw away significant amounts of inventory it paid for;
  • Removing store fixtures and inventory from Haggen-acquired stores that Haggen paid for;
  • Diverting Haggen inventory to Albertsons stores; and
  • Failing to perform routine maintenance on stores and equipment.

“Albertson’s anti-competitive conduct caused significant damage to Haggen’s image, brand, and ability to build goodwill during its grand openings to the public,” according to the complaint. The complaint continued, “Albertson’s unlawful acts destroyed or substantially lessened the economic viability, marketability and competitiveness of the [Haggen] Stores, depriving consumers in each of the Relevant Markets the benefits of substantial competition from a new market entrant.”

As was reported December 22, 2014, in The Real Estate Daily News when AB Acquisition LLC (Albertsons) and Safeway Inc. (NYSE: SWY) first announced a merger subject to approval by the Federal Trade Commission (FTC), to sell 168 stores across eight states to four buyers. Haggen closed on the purchase of three stores in the Tucson market in May, 2015.

  • A former Safeway at 10380 E. Broadway Blvd, Tucson;
  • A former Albertsons at 1350 N. Silverbell Road, Tucson; and
  • A former Safeway at 8740 E. Broadway Blvd, Tucson

Haggen, three months later in August, announced the closure of the two former Safeway stores.




Tucson Thanks Our Airmen & Families Sept. 3rd

Davis Monthan Air Force Base Entry
Davis Monthan Air Force Base Entry

“Tucson Thanks Our Airmen and Families BBQ” is set for noon to 4 p.m., Thursday, September 3, to thank an expected 5,000 airmen and women and their families at Davis-Monthan’s Bama Park, to enjoy an afternoon of food, live music and outdoor activities, jumping castles, corn hole tournaments and games.

Tucson’s largest deployment of military personnel since World War II will be coming home and the Tucson Metro Chamber Military Affairs Committee and other local groups and organizations want to throw a welcome home party.

“Tucson will be coming together to show appreciation to our service men and women. It is my hope that everyone in the community will go up and say ‘thank-you’ when meeting a military person in the community,” said Mark Irvin, one of the businessmen who first conceived of such the celebration and got the ball rolling.

Other sponsors or the event who joined in were Jim Click, BSD Winers & Diners up, City of Tucson, Pima County, Citi, B-Side Cover Band, Visit Tucson!, Arizona Diamondbacks, PICOR, Villas Ice, Finley Distributing, Sentinel Peak Brewery, TEP, UofA Athletics, Assurance Healthcare, USO, Eegee’s, SAHBA, Tucson Community Cares Foundation, Air Force Association Tucson Chapter, F&S Distributing, Boys & Girls Club, Pizza Hut of Arizona, and Safeway.

Those returning to D-M have been training in close-air-support missions alongside other NATO nations including Estonia, The Czech Republic, Romania, Poland, Slovakia, The United Kingdom and Lithuania. D-M forces originally left home in February and have been part of a longer, two-year training mission across Europe.

“This is an amazing opportunity for Tucson to show their support for the men and women who serve our country and keep us safe,” said Welcome Home Event Organizer Ellen Jimenez, Committee Chair for the Military Affairs Committee. “We want them to know we are happy to have them home with their families.”

The following PSA will begin running today on local TV click here to view: TucThnxMilitary30V2 – Small

For questions please contact Ellen Jimenez at 520-468-8209 or ellenjimenez@viscountsuite.com