Balducci's Closes Door On a Store In District

By Ylan Q. Mui
Washington Post Staff Writer
Saturday, September 9, 2006

Gourmet grocer Balducci's said yesterday it would not open a much-anticipated store in downtown Washington. And this time they mean it.

The saga of the planned store in the revitalized Penn Quarter neighborhood has had more twists than a Calphalon pot full of spirelli. Spokeswoman Melissa Daly said the ride has finally come to an end.

"They are not moving forward with Penn Quarter," she said. "It is the final word on it."

The retailer signed a letter of intent last year to open a store in the ground floor of the Jefferson at Penn Quarter, a condominium complex on Seventh Street between D and E streets NW. In January it signed a lease. The store was scheduled to open this summer.

The love affair fell apart in April, however, with Balducci's saying it wanted to focus on its existing stores. Residents were devastated that they would not have an opportunity to buy products such as Provencal-marinade, cage-free, antibiotic-free and animal-byproduct-free chicken. There are no other grocery stores in the area, though a Safeway is planned for Fifth and K streets NW.

So residents did what any self-respecting Washingtonians would do: They protested. Jo-Ann Neuhaus, executive director of the Penn Quarter Neighborhood Association, helped lead an e-mail campaign aimed at Balducci's. D.C. officials hinted at financial incentives if the company decided to open the store.

The efforts made Balducci's take a second look. In July, co-chief executive Peter Krieger said the company would re-evaluate the project. James Duncan, a regional vice president of JPI, the Texas-based developer handling the project, thought the odds of Balducci's opening the store were better than 50-50.

It turned out to be just a fling. This week, Duncan was told by D.C. officials that the Balducci's deal was dead. The company called shortly afterward.

Daly yesterday reiterated Balducci's intention to focus on its current business rather than expand. The chain, part of the Sutton Place Group LLC, was bought by Bear Stearns Merchant Banking for $50 million in 2004.

Neuhaus said residents would be unhappy with anything other than a grocery store.

Duncan said he planned to meet with Balducci's officials late next week to discuss next steps, including the possible termination of its lease. Several grocers, as well as other retailers, have expressed interested in the space, Duncan said.

He still has their phone numbers.

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