Beijing Restaurant's closing allows CVS to build at eastern Duluth siteFor more than a year, a small family restaurant has held up the construction of a CVS pharmacy at Superior Street and 12th Avenue East in Duluth. But no more. The Beijing Restaurant will close this weekend.
By: Candace Renalls, Duluth News Tribune
For more than a year, a small family restaurant has held up the construction of a CVS pharmacy at Superior Street and 12th Avenue East in Duluth.
But no more. The Beijing Restaurant will close this weekend.
With a long-term lease at the old Plaza strip mall, the owners of Beijing had turned down a lease buyout from the pharmacy giant that most other tenants took.
With the Chinese restaurant’s lease valid through December 2014, construction of the store was pushed back to 2015.
But their holdout did more than that. It held up CVS’ plans to open more than three stores in the Twin Ports as it entered the Duluth-area market.
“We started in Minnesota in the Twin Cities, so Duluth was our first market outside the Twin Cities,” said Mike DeAngelis, a CVS Caremark spokesman.
At the Plaza strip mall, the last of the other six tenants moved out last summer. That left Beijing Restaurant — flanked by empty and boarded-up storefronts — the only business operating in the small mall across the street from the Plaza Shopping Center.
But now the restaurant owners say they’ve accepted a lease buyout and will close on Saturday.
That allows construction of the CVS pharmacy to move up from 2015 to 2014.
“This accelerates the timetable about a year, with it likely opening in late 2014,” DeAngelis said. “If all stays on schedule, demolition and construction would be in the spring of next year.”
It typically takes four to five months to build and open a CVS store, he said.
Some demolition for the new CVS pharmacy that will take up the entire upper side of Superior Street between 12th and 13th avenues east already is done. The SuperAmerica station that once stood on the corner of Superior and 12th, and a house next to it, were razed in early 2012 to make way for the store.
Buyout negotiations with mall tenants with longer leases began in 2010.
Chang Wong, who owns the Beijing Restaurant with his wife, had one of the longest leases. He said last week that they finally agreed to a lease buyout because of a planned three-month trip to China. The restaurant, which has been at the Plaza location since 1995 and has a loyal following, will close after its regular hours on Saturday. They have until July 31 to vacate the premises, he said.
Wong said they will reopen at another location — possibly downtown — after their return. So far, they don’t have a site.
More stores stalled
If not for Beijing’s holdout, the Plaza CVS store would have opened in early 2013 and been the Rhode Island-based pharmacy chain’s first entry into the Twin Ports market.
It was the original location sought by CVS as they entered the Duluth market.
“The original battle was to get on that corner,” said Greg Follmer, a Duluth broker who works with CVS. “This particular location was a difficult acquisition; to get this corner was a difficult thing.”
The strip mall and the house were purchased from Plaza Associates of Duluth in late 2011 for nearly $3 million, while the gas station was purchased for $1 million, city records show.
It was to be CVS’ first store in the Twin Ports. But while construction of the Plaza store was on hold, the two other CVS stores planned for the Twin Ports — one in Superior and one in West Duluth — were built and opened last year.
Like the West Duluth CVS store, the Plaza store will be across the street from a Walgreens store. That’s a strategy CVS has taken in the Twin Cities and elsewhere as it aggressively takes on the industry leader.
Industry observers say locating by Walgreens stores is controversial but also makes business sense. Walgreens is known for picking the best locations in a city or town to locate its stores, preferring corners that are convenient with a lot of drive-by traffic. CVS also analyzes traffic patterns during its site selection process and comes to similar conclusions as Walgreens, observers say.
But the Plaza location has another thing going for it. It is near Duluth’s growing medical district. And two pharmacies will create a shopping hub to fill the district’s pharmacy prescriptions.
“We’re really looking forward to opening at the (Plaza) location” DeAngelis said. “It’s a great site, for convenience and access for customers.”
With construction of the Plaza store now moving forward, the hold on opening more stores in the Duluth area also may lift.
“Now that that’s settling out we’ll probably be pursuing other locations in Duluth,” Follmer said.