BY LISA BIANK FASIG and PERRY BROTHERS
The Cincinnati Enquirer
The Walgreens store at Race Street downtown is slated to close on Saturday, clearing the way for an undefined development and sounding a new challenge to the nearby CVS store, which operates in the space Walgreens wants.
The drug store company, which has operated a Walgreens on the block of Race between Fifth and Sixth for nearly 50 years, must vacate for the city to redevelop the beleaguered Fifth and Race Tower site. But Walgreens' rival CVS drug store has redeveloped and occupies the former J.J. Newberry site at Sixth and Race, Walgreens' preferred relocation site.
"It's terribly unfortunate," said Walgreens spokeswoman Laurie Meyer. "The city wants us out of there. We feel really terrible about it."
The move raises several issues about development on Race Street and revives a year-long turf battle between Walgreens and CVS. Local developer Rookwood Properties in September 1997 bought the Newberry building to lease to CVS. Soon after, the city said it wanted the building as a relocation site for Walgreens. CVS and Rookwood vowed to fight, and opened a store in August. The city has offered Rookwood $1.7 million for the property -- and threatened to take it by eminent domain -- but Rookwood hasn't budged.
Walgreens believes it will move to Sixth and Race, building a larger store than the current CVS.
"My understanding is we have a lease with the developer who has a lease with the city to put a Walgreens there," Ms. Meyer said. The city wants Eagle Realty Group, the real estate arm of Western-Southern Life Insurance Co., to develop the Sixth and Race property for Walgreens and potentially other uses.
But Rookwood, with the support of CVS, is prepared for a court battle.
"CVS is not intending to give up its space,and no deals have been reached to do so," said Fred Kanter, vice president of Rookwood. "The city will have to take it -- or try to take it."
Andi Udris, the city's economic development director, was out of town Thursday and unavailable for comment.
Although the city argues that the Eagle plan is the best use for the property, it is important for the city to find a home for Walgreens. The retailer's lease requires satisfactory relocation or the property owner will have to foot relocation fees and the equivalent of the store's annual net profits, an estimated $1 million-plus.
As for the Fifth and Race Tower project, it is unclear what will develop. The acquisition of Mercantile Stores by Dillard's Inc. put the kibosh on a proposed Maison Blanche department store. The city and Western Southern are searching for new prospects.
