Kroger Marketplace may still go in West Chester Activity Center location

West Chester Twp. trustees have two offers on the table for the old Activity Center — an outright purchase from Kroger and a lease-to-purchase agreement from Dr. Mohamed Aziz, the trustees have counteroffered the giant grocery store.

The township received a $1.9 million purchase offer from Kroger at around 4 p.m. Tuesday, they already had a $1.9 million lease/purchase proposal from Aziz, which included some additional monetary considerations. The Aziz offer includes a $200,000 earnest money payment — which can be applied to the purchase price — he loses if he backs out again. The first time there was a contingency that he would get his $100,000 earnest money back if he canceled in time, which he did.

Since both potential buyers have reneged on the township previously, Trustee Mark Welch told the Journal-News they wanted Kroger to also include the $200,000 non-refundable earnest money guarantee. The first time the township was left empty-handed when the sale fell through — $100,000 was on the line —because they canceled before the deadline.

“If they’re truly interested and they’re not playing games, then if their true intention is to purchase this in 120 days then what do they care,” Welch said. “It’s just up-front money that we’re going to subtract from the purchase price.”

Aziz’s one-year rental agreement would begin March 15 and the first six months of rent would be applied to the purchase price, the second half of the year or $90,000 in lease payments wouldn’t be applied to the purchase price.

So apples to apples, the Kroger offer was a flat $1.9 million and they would close in four months and the Aziz purchase could potentially be almost $2 million if he leases the property for the full year.

Credit: Nick Graham

Credit: Nick Graham

“In terms of the art of the deal here, it would be more advantageous I believe if we can get $1.9 million out of Kroger in three or four months that’s a better deal than waiting 15 months to see if this (the Aziz deal) would go through and possibly getting $1.99 million,” Welch said.

The Kroger deal would be more advantageous to the township from a property tax perspective. In the beginning officials said redeveloping the 30-year-old store site would triple property values and increase the tax bill from $169,000 to more than $500,000 annually and double the plaza footprint to about 20 acres.

Aziz paid $39,524 in property taxes on his current location on U.S. 42, according to the auditor’s office.

Trustee Ann Becker told the Journal-News that is important to her.

“In my opinion looking at the tax impact for the residents and the benefit of a having a new Kroger in that part of the township there’s a double benefit there,” Becker said. “That’s why even with the frustration we’ve had with Kroger I still wanted to explore their offer.”

Credit: Nick Graham

Credit: Nick Graham

Trustee Lee Wong told the Journal-News previously he did not want to deal with Kroger any longer but said he’ll consider the new offer. A unanimous vote of the trustees is required to sell the property.

“This better be the last dance with Kroger, I’m tired of it,” Wong said. “If it was up to me no, it’s over, but they want to give them one more chance... So we put in with a counter and they’d better come up with something better.”

The Activity Center came into play after Community First Solutions stopped providing senior programming in 2019. Shortly thereafter, the township agreed to sell the building for $1.8 million to Kroger’s landlord Regency Centers, for a giant Kroger Marketplace, but that turned out to be a two-year debacle. Kroger is making the offer outright this time.

ExploreWest Chester Activity Center purchase deal falls through — again

Kroger won’t comment on the current offer or whether plans have changed, but the original plan called for a new 95,545-square-foot Kroger to replace the existing location along Tylersville Road, and the grocery giant and retail center owners had bigger plans to build a 117,166-square-foot Marketplace if other pieces came together.

The deal was contingent on Regency Centers being able to acquire the Activity Center, the Providence Bible Fellowship church, a sliver from Chesterwood Village and easements and agreements with about 10 other property owners to complete the complicated deal. Kroger backed out of the deal at the height of the pandemic in 2020.

Regency had secured agreements with the church and the Dixon family that owned Chesterwood. Church officials could not be reached for comment, but they have relocated to the Morning Star Baptist Church location on Summerhill Drive in West Chester. The county auditor’s website shows Providence purchased the property for $2 million Feb. 26, 2020. The Cox Road church still belongs to Providence.

Kroger also wanted the township to pay for significant road improvements in the area. Welch said there are no contingencies tied to the current Kroger offer.

“I don’t know what’s in the water or what’s in the air but to now have two offers competing for it is a great thing,” Welch said.

The contract to purchase Aziz submitted says the offer expired at noon on Thursday. Barb Wilson, director of of public information and engagement, told the Journal-News “Dr. Aziz is aware of the circumstances and it would be up to him to withdraw if he wanted to do so.”

Aziz has never responded to requests for comment.

Welch told the Journal-News if Aziz did withdraw his offer, he is not concerned they would lose leverage with Kroger.

“If Kroger starts to play games with this thing, I’m out,” Welch said. “They had their chance, they blew it, they’re back now and you know what, I’ve said this many, many times — we’re not desperate, we don’t need to sell it. They either perform the contract that we want, and all it is is some changes in the offer they sent over, or go away.”

Aziz offered $1.9 million earlier this year, he wanted to create medical offices in the space. He rescinded the offer when the trustees refused to drop the price $300,000 after he found how much he would have to spend on required upgrades.

The township has had two other purchase offers fall through — a $2.25 million offer from Illinois-based Quattro Development for a Montessori School, and a local family wanted to create an event center but the offer was rescinded because financing failed for the $2.3 million offer.

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