A recent state Superior Court decision could pave the way for a proposed Sheetz convenience store at the Old Fort intersection near Centre Hall.
The court upheld an April 20, 2012, Court of Common Pleas ruling that rejected a lawsuit seeking to block developer Bob Poole and Old Fort Road Limited Partnership from selling property at the intersection of state Routes 144 and 45 for the construction of a Sheetz store.
J.J. Powell Inc., which operates a Snappy’s convenience store on leased land across Route 144 from the property in question, had appealed the 2012 decision.
The company’s lawsuit centered on whether Poole and Old Fort Road Limited Partnership were trying to lease land to Sheetz, violating a covenant in the lease between J.J. Powell and the Smith-Pletcher Home Association, which owns all four corners of the Old Fort intersection.
J.J. Powell argued a 2009 deal for Sheetz to buy a retail condominium unit from Poole — who had divided a 3.6-acre corner parcel purchased from the Smith-Pletcher Home Association two years earlier into three lots — amounted to a lease.
Under the J.J. Powell lease covenant that runs until 2023, the former Smith-Pletcher Home Association parcel cannot be leased for a competing convenience store.
But the state Superior Court said J.J. Powell failed to make a convincing case that the Sheetz deal violated the covenant.
“It has been demonstrated that the restrictive covenant does not forbid the sale of the property to Sheetz and there is no evidence of record to support the claim that the sale is anything other than a sale,” the court ruled.
According to court papers, the dispute between J.J. Powell and Old Fort Road Limited Partnership goes back to 2007.
That year, when Poole exercised an option to buy the parcel and entered a tentative lease agreement with Sheetz, J.J. Powell filed a lawsuit to halt the sale.
Judge Thomas King Kistler ruled that, though the covenant did prevent the land’s owner from leasing it for a convenience store, the Smith-Pletcher Home Association could sell it to a buyer with a store in mind. J.J. Powell did not appeal.
But shortly after, Poole proposed selling the land to Sheetz for $800,000, with a buyback provision allowing him to purchase the land for the same price when the covenant expired and then lease the land to the company. Sheetz, however, rejected the proposal.
J.J. Powell sued again in 2009 after learning that Poole had divided his parcel into three retail units, with Sheetz agreeing to buy Unit 1 and develop it into a “prototypical Sheetz Convenience Store with gasoline pumps.”
“Powell claimed the sale to Sheetz is actually a lease and is therefore barred by the covenant,” the state Superior Court decision said.
Poole, the partnership and Sheetz argued that the company was purchasing the property, and that “the 2008 order permitted the owner of the property the right to use the land for any purpose, including a convenience store,” the decision said.
In his 2012 ruling, visiting President Judge J. Michael Williamson ruled that Kistler “properly determined the extent of the covenant” and that “Powell had presented no evidence the sale to Sheetz was a sham,” the Superior Court decision said.
The Superior Court’s review concluded that Williamson also “correctly determined the covenant allowed the owner of the land to use it for any purpose, including use in competition to Powell.”
In addition, J.J. Powell had claimed Kistler’s 2008 order was biased because Poole contributed to the judge’s re-election campaign. Although Kistler revealed the tie during the trial, J.J. Powell thought he did not clarify the extent of the donation, the Superior Court decision said.
But, the Superior Court judges noted, the 2012 trial court “refused to address this claim as it represented an improper attempt to appeal the 2008 order.” The judges agreed, saying “Powell is not entitled to relief on this issue.”
Philadelphia attorney Jack Meyerson, representing J.J. Powell, declined to say whether his client would continue its appeal.
“We’re still evaluating our legal position,” Meyerson said.
State College attorney Katherine Oliver, representing Poole and the Old Fort Road Limited Partnership, could not be reached for comment. Information about Sheetz’s plans was unavailable.