Friday, January 21, 2000
Drugstore war may be settled
Smaller stores may be forced to move
BY ROBERT ANGLEN
The Cincinnati Enquirer
A truce in Cincinnati's downtown drugstore war could put two battling pharmacies across the street from each other and open territory for new housing.
But city officials refuse to say how much, if any, taxpayers will have to pay for the armistice, which will require pushing existing businesses off a portion of Sixth Street.
“This is a matter of ongoing litigation, and negotiations are at a critical stage,” said Deputy City Solicitor Peter Heile. “To discuss the details right now would prejudice the settlement.”
The deal — discussed in a private session by City Council members last month — would end two years of legal maneuvering over the city's attempt to replace a CVS Pharmacy on Sixth and Race streets with a Walgreens.
Instead, Walgreens will be moved across Race from CVS, and businesses there would be vacated, City Council members confirmed this week.
“I'm not crazy about having two drug stores next to each other,” Mayor Charlie Luken said. “But it's the only way to get out of this thing.”
This “thing” is what happened when the city tried to seize property leased to CVS in order to relocate Walgreens from the Fifth and Race Street Tower. The tower was torn down by private developers for a proposed Nordstrom department store.
In a lawsuit against the city, CVS lawyers contend the seizure was motivated by the city's desire to protect the developer — Western-Southern Life Insurance Co. — from having to pay Walgreens $1.5 million for uprooting the store.
City officials, who once offered $1.7 million for the Sixth and Race Street property, said they wanted Walgreens there because Western-Southern would make better use of the site, specifically by developing the floors above the pharmacy.
Under the terms of the proposed settlement agreement, council members confirmed, CVS would stay and Western-Southern would be allowed to develop the floors above the pharmacy. Western-Southern would also take control of properties on the west side of Sixth and Race for a Walgreens store.
Western-Southern spokesman Herb Brown would not confirm specifics of the settlement, saying “we are still trying to work through all of the details.”
But Councilman James Tarbell said the settlement is the best “overall result” for the city.
“Our goal is not to take the northwest corner for pure and simply relocating Walgreens,” he said. “The northwest corner is very underused real estate.”
But the cost to taxpayers for clearing land and relocating businesses could be expensive. When the city cleared the Fifth and Race Street Tower, including Walgreens, officials relocated 15 businesses from the site and each business was eligible for up to $20,000 in relocation assistance. The city also spent about $1 million razing buildings from the site.
City officials refused comment on how much the new deal would ultimately cost taxpayers. City Manager John Shirey referred questions to the city solicitor's office, which referred them back to Mr. Shirey.
Merchants on Sixth and Race question how much good the assistance will do. They say it might cover the physical costs of the move but not the loss in customers.
“Western-Southern is driving this train, but the city is behind it,” said Dodd Jewelers owner Michael Gilbert, who is on notice that he will have to relocate his Race Street business.
“The city should be thrilled to have a 60-something-year business downtown,” he said. “But the city has done a great job of driving away retailers from downtown. ... It's not my fault they screwed up with Walgreens.”
Around the corner on Sixth Street, the owners of Jade Wigs and Kathman Goodyear Shoe Repair say they have been put on month-to-month leases.
“After 10 years I have been here,'' said Son Jahn, owner of Jade Wigs. “We have been told we're going to have to move. But they don't say when.”
At his shoe repair store, Buck Kathman complained about having two pharmacies across the street from each other. He said the city has bungled development in the area and he is being made to suffer for it.
Mr. Kathman said it could cost upwards of $70,000 to move the heavy equipment and machines used in his work.
“An unfortunate byproduct of development is that some businesses get relocated,” said David Ginsburg, executive vice president of Downtown Cincinnati Inc., which oversees downtown development issues.
“Most property owners want to be a part of this,” Mr. Ginsburg said, adding that he has met with several business owners at Sixth and Race.
He acknowledged that having two pharmacies so close to each other is “not what you would create in a development plan.” But he said the move could spur retail construction at Fifth and Race in addition to the new housing.
Mr. Kathman, whose family has owned the shoe repair since 1905, said it's ironic that Walgreens will be just around the corner from where it used to be — and is chasing out businesses to reopen one that was closed for a development that hasn't happened.
“This will be the third time I have had to relocate because of the city,” he said. “It's a deal the city has to do in order to placate Walgreens.”
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