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City Ready to Strike Restrictive Lease Deals

CHICAGO-Covenants that bar a competitor from taking over a 7,500-sf or larger space block abandoned by a grocer or pharmacy would be forbidden by a law going to the city council next months. Deals in place before May 11 would be grandfathered.

By Mark Ruda | Updated on August 11, 2005

(For more retail coverage, click GlobeSt.com/RETAIL.)

CHICAGO-In a move being watched—if potentially copied—from Atlanta to British Columbia, Chicago aldermen are likely to prohibit restrictive use covenants on 7,500-sf leases or greater involving grocery and pharmacy tenants as early as next month. While a formal vote will not be taken until next month, the consensus of a joint meeting of the zoning as well as economic, capital and technology committees was unanimous Thursday.

If passed by the city council, which could come as early as next month, the law would grandfather restrictive use covenants in place before May 11, when 1st Ward Alderman Manuel Flores and 39th Ward Alderman Margaret Laurino introduced the measure aimed at reducing the number of shuttered grocery stores across the city. However, restrictive use covenants would be allowed for up to three years if the tenant relocated within a half-mile of the vacated store and completed the move within two years.

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