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Rancho San Miguel grocery store sues developer over lease

LIVINGSTON — A 10-acre shopping center is still on track to be built, though the key tenant is suing the developer because it wants to end the lease.

A Rancho San Miguel grocery store is set to anchor Livingston Commons, a B Street and Winton Parkway complex that was expected to break ground in spring 2007. The project, part of Joseph Gallo Farms' 35-acre business development area, is also expected to include a drug store and other small shops.

However, the store’s Stockton parent company, PAQ Inc., filed a lawsuit in mid-February asking a Merced County Superior Court judge to rule that the lease is invalid.

The court case is set for a conference in July, and Danville-based developer Blake Hunter Venture is hoping to start construction pending its outcome, CEO Bradley Blake said.

He would not comment on the lawsuit.

The company is in the midst of trying to obtain building permits, which he said should be done in the spring.

PAQ, which also operates Food 4 Less stores in the Central Valley, alleges that the developer offered a 40 percent stake of the company’s profit from the shopping center two years ago.

The letter, filed as evidence with the court, outlines how Blake Hunt Ventures worked with Pacific Coast Capital Partners to pay for the multimillion project and how PAQ could get a cut of its success.

“We look forward to this being the first of many deals between our two companies,” wrote Mark Blancarte, vice president of Blake Hunt Ventures.

The stake in the project was never written into the lease, which PAQ believes is now worthless. The company has also asked for financial statements and information relating to the center’s construction. The records haven't been turned over, according to the court complaint.