Safeway, Inc. v. Lee CA1/3

Background Safeway is the lessee of anchor space in a retail shopping center in El Cerrito now owned by respondents. Safeway holds its interest in the property pursuant to a written lease and a recorded amended declaration of restrictions and grant of easements (the declaration or CC&Rs1). “Paragraph 2 of the original declaration provides that “the tenants occupying the [shopping center] shall be primarily retail and service tenants of

1 CC&Rs is the abbreviation for covenants, conditions, and restrictions.

1 the type normally associated with a retail shopping center.” Paragraph 13 of the lease provides: “Lessee may assign this lease or sublet the whole or any part of the leased premises provided the use thereof by any such subtenant or assignee shall be for retail or service purposes.” After initially operating a market in the leased space, in late 2009 Safeway informed respondents that it would be ceasing operations in the leased premises because it would be opening a larger store in the same vicinity. In June 2010, Safeway advised respondents that it intended to sublet the premises to 24 Hour Fitness and requested respondents’ approval. In July, respondents responded:…