A New York City real estate investment firm filed suit against Walmart Inc. of Bentonville in Benton County Circuit Court requesting a declaratory judgment that will allow it to rent shopping center space to a secondary retailer in Jonesboro.
Stonemar Properties owns the Bernard Court shopping center on East Highland Drive in Jonesboro, which has a Walmart SuperCenter at the location.
The property was originally sold by Walmart to an investor in 1997 with a restrictive covenant to prevent the location being leased to a retail competitor such as Target, Costco or Kmart.
Stonemar, which eventually acquired the property through its subsidiary Bernard Court LLC, wants to lease one of the lots to Dirt Cheap of Hattiesburg, Mississippi, which it described in its suit as a “secondary market retailer.”
The suit was filed by Stonemar’s attorney, Kevin Cole of Waddell Cole & Jones of Jonesboro.
Walmart has prevented the lease because of the restrictive covenant from the 1997 sale. Stonemar argued in the suit that the restrictive covenant in the deed was “ambiguous” because it states 20- and 50-year terms that are separated by a semicolon.
Since the 20-year term has expired, the restrictive covenant clause should be considered expired.
The suit also argued that the restrictive covenant was to prevent big box retailers who compete in the same market as Walmart.
Dirt Cheap, which has four locations in Arkansas, is not a competitor in that market so the covenant is not legally applicable, Stonemar argued.
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