Whole Foods renovation hit with lease dispute, ‘stop work’ order

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The Whole Foods Market in Glover Park closed in March. (Brian Kapur/The Current/March 2017)
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A recent lawsuit and “stop work” order have raised further questions about Whole Foods Market’s Glover Park store, which closed abruptly in March after the D.C. Department of Health found repeated evidence of rodents.

Although the 2323 Wisconsin Ave. NW supermarket was cleared to reopen, the company took the opportunity to remain closed and carry out a complete renovation — much to the chagrin of customers, who blasted the lack of notice and scarcity of details about when the store might reopen.

Whole Foods’ effort to move quickly may have backfired in other ways as well. Last month, the store was ordered to cease interior demolition without a permit. Separately, Whole Foods last week sued its landlord, Wical Limited Partnership, alleging that Wical improperly threatened to terminate its lease and continues to obstruct the renovation.

The first public sign of discord appeared May 21, when the D.C. Department of Consumer and Regulatory Affairs posted an orange “stop work” order at the grocery store, stating that interior demolition was taking place without a permit. The lawsuit states that Whole Foods asked Wical for permission to apply for permits two days later, and the landlord refused.

The “stop work” order states that Whole Foods was conducting interior demolition without the required permit. (photo courtesy of Sandra Maler)

Whole Foods spokesperson Rachael Dean Wilson declined to comment on the lawsuit or allegations of work without a required permit. A woman who answered the phone for Wical said the company had no comment and hung up on a reporter.

In its lawsuit against Wical, Whole Foods says it is working in good faith to accommodate contradictory lease terms. On the one hand, its lease states that the store can’t be closed for more than 60 days — the basis for a “notice of default” Wical issued to Whole Foods last month. However, the lease also stipulates that Whole Foods must “keep the property clean and free of pests and operate the store in accordance with the same standards of quality as it does in similar stores,” and the lawsuit claims the extended closure is necessary to do so.

Whole Foods had already spent $1 million toward its renovation when Wical issued the notice of default, the lawsuit states, and the store was preparing to spend unspecified millions more to complete the work — all while maintaining rent payments.

“Enforcing the Notice of Default would be unconscionable, since the Defendant [Wical] would receive a windfall and be unjustly enriched in that it would either coerce the Plaintiff [Whole Foods] into signing a new lease with higher rent and a longer term, or it would receive the benefit of Plaintiff’s work to date,” the suit states. “Defendant’s Notice of Default constitutes a scheme to allow Defendant to take advantage of Plaintiff’s unfortunate situation, and was issued in bad faith.”

The suit asks the court to block Wical from terminating the lease; to order Wical to allow Whole Foods to seek permits; and to order Wical to assume Whole Foods’ legal expenses, cover lost profits due to the delay and pay other unspecified damages.

The lawsuit also spells out more information regarding plans for the Glover Park store if they are allowed to proceed. The suit states that there was no easy fix to its rodent issues short of gutting the building.

Essentially rebuilding from scratch, the company’s plans include “modernizing the store’s layout; replacing existing food display cases; replacing the salad bar; replacing the millwork, cabinetry, register stands, walls, and ceilings which were demolished in curing the ordinance violation; overhauling the elevator and conveyor system; and adding new food presentations which requires the movement of certain major systems such as plumbing and HVAC.”

The lawsuit says the work can likely be completed in six months once permits are issued, but adds that the application process may take months “due to a backlog in permitting requests” and that Wical has blocked Whole Foods from even filing for permits. Asked whether the regulatory agency has a backlog of unprocessed permit applications, however, spokesperson Matt Orlins said the department is meeting its goal of approving code-compliant applications within 30 days.