Full opinion text
FINDINGS OF FACT AND CONCLUSIONS OF LAW ELLIS, District Judge. The central question in this action for declaratory judgment and injunctive relief is whether a supermarket tenant reasonably withheld its consent, pursuant to a provision in its lease, to the landlord’s proposed changes to a common area. The proposed changes, which are part of a larger renovation and revitalization project for the immediately surrounding urban area, involve the elimination of the existing above ground parking structure currently used by the supermarket’s customers to accommodate the construction of new retail development and the relocation of the supermarket’s parking to an underground garage immediately under the supermarket store. The supermarket has withheld its consent and seeks (i) a declaration that its withholding of consent was not unreasonable, and (ii) a permanent injunction to preclude the elimination of the common area surface parking that has heretofore been available to supermarket customers. After the entry of a temporary restraining order, a bench trial was held in which the hearing on the merits was consolidated with the preliminary injunction pursuant to Rule 65(a)(2), Fed.R.Civ.P. Set forth here are the Court’s findings of fact and conclusions of law pursuant to Rule 52, Fed.R.Civ.P. FINDINGS OF FACT I. Parties and Background Plaintiff Safeway Inc. (“Safeway”), the tenant in this action, is a Delaware corporation with its principal place of business in California. Safeway operates over 1,700 grocery stores nationwide. Defendant CESC Plaza Limited Partnership (“CESC”), the landlord in this action, is a Virginia limited partnership with its principal place of business in Virginia. CESC, a real estate developer, owns seventy percent of the office and retail space in Crystal City. Crystal City is a large office, retail and apartment building complex located in Arlington, Virginia, with approximately 400,000 square feet of retail space and approximately 10 million square feet of commercial office space. The Safeway store at issue in this litigation is located in the Crystal City Plaza Shops, between South 23rd Street and South 20th Street (the “Plaza Block”) in Crystal City. The Plaza Shops constitute an enclosed, retail mall of about 40 stores, located on the ground floor of the Plaza Block. The Safeway store opens onto the interior of the Plaza Shops mall; thus, customers coming from the surface parking lot must walk down an interior mall corridor, approximately 100 feet in length, to reach the entrance to the store. A two story parking structure runs alongside the Plaza Shops between the Plaza Shops and Crystal Drive. CESC developed and is seeking to implement a forty million dollar renovation project designed to transform and revitalize the Plaza Block and the surrounding area. The proposed renovations, which are subject to a consent provision in Safeway’s lease, include the removal of the parking structure, which provides surface level parking for the Plaza Shops and the Safeway store, and the construction of new retail stores in its place to revitalize the street front as part of a larger plan to redevelop the Crystal City area. II. Procedural Background This complaint was filed on October 8, 2002. Safeway seeks a declaratory judgment that its withholding of consent to the proposed alteration of the common area is reasonable, and claims that CESC’s plan to proceed without Safeway’s consent constitutes a breach of the lease. Safeway also seeks preliminary and permanent injunctions prohibiting CESC from altering the common areas without Safeway’s consent. CESC counterclaimed and seeks a declaration that Safeway’s withholding of consent is unreasonable, and also claims breach of the lease. On Friday, January 3, 2003, the parties appeared on Safeway’s emergency motion for a temporary restraining order. This motion was precipitated by CESC’s plans to close the parking structure and commence construction activity on its revitalization project on Monday, January 6, 2003. After a hearing, the motion for a temporary restraining order was granted in part and denied in part, permitting CESC to close the structure, but prohibiting any irreversible alterations to the parking structure, and requiring CESC to provide Safeway’s trucks with access to the Safeway loading dock. See Safeway Inc. v. CESC Plaza L.P., Civil Action No. 02-1497-A (E.D.Va. January 3, 2003) (Order). Pursuant to Rule 65(a)(2), Fed.R.Civ.P., the trial on the merits was advanced and consolidated with the hearing on the preliminary injunction, which was scheduled for January 7, 2003. See id. On January 7, after hearing argument from the parties regarding the need for further discovery and more time to prepare, the consolidated trial on the merits and the preliminary injunction was continued until January 30, 2003. By consent between the parties, construction activities were limited pending resolution of the merits of the dispute in the scheduled January 30 trial. Specifically, the parties agreed (i) that the surface lot would remain closed for parking, (ii) that the relocation of the parking to the underground lot below the store would continue, (iii) that CESC would continue to ensure that Safeway had access to Safeway’s loading dock as previously provided, (iv) that no irreversible structural changes would be made to the parking structure, and (v) that pedestrian access to the rear entrance of the Plaza Shops mall would be maintained. See Safeway Inc. v. CESC Plaza L.P., Civil Action No. 02-1497-A (E.D.Va. January 9, 2003) (Order). In the meantime, CESC was permitted to proceed with some construction activities, including (i) the relocation of utilities from the parking structure, (ii) access into Safeway’s leasehold space for the installation of new piping, (iii) utility work and traffic control on Crystal Drive, and (iv) alteration or removal of landscaping and fences in preparation for construction. Id. The bench trial commenced on January 30, 2003, continued on January 31 and, as a result of unavoidable scheduling conflicts, the presentation of evidence continued on February 19 through 21. Closing arguments were heard on February 25. The decision in this matter was announced from the bench on February 28, 2003, and is more fully set forth and memorialized here. Thus, trial of this matter was conducted and concluded as expeditiously as possible in less than eight weeks after the filing of the January 3 motion for a temporary restraining order. III. Historical Background The lease at issue here was originally entered into on May 11, 1967 by Safeway and CESC’s predecessor in interest, Crystal Associates and Plaza Associates. The term of the original lease was ten years, with two 10-year options. As modified, the current lease expires on March 31, 2005, with two renewal options of five years each thereafter. The relevant provision in the lease with regard to common area changes and consent is as follows: 4. COMMON AREAS. COMPLETION OF SHOPPING CENTER. All those portions of the shopping center not shown as building areas on Exhibit “A” shall be common areas for the joint use of all tenants, their customers, invitees and employees, and lessor hereby grants to lessee and its customers, invitees and employees the right to use all of said common areas and any enlargement thereof.... Lessor further agrees ... that, following completion of construction of any portion of the shopping center, the sizes and arrangements of said buildings and common areas (including parking areas) will not be changed without lessee’s written consent, which shall not be unreasonably withheld, and that if said buildings are not completed or if said sizes and arrangements are changed without lessee’s written consent, lessee may cancel this lease by notice to lessor. Lessee shall not have the right to cancel this lease if less than twenty-five percent (25%) of the shopping center common area outside the area crosshatched on Exhibit “A” is removed or changed and lessor can provide equivalent shopping center common areas of equal convenience to the leased premises [emphasis added]. In addition, Paragraph 21 of the lease states: 21. REMEDIES CUMULATIVE. No remedy herein conferred upon or reserved to lessor or lessee shall exclude any other remedy herein or by law provided, but each shall be cumulative and in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. The original lease was modified several times. In November 1983, the lease was modified to acknowledge Safeway’s consent under Paragraph 4 to the construction of a parking structure over the existing surface parking lot that served the Plaza Shops mall and the Safeway stores. After this construction, the existing surface lot was covered by a second parking level, but continued to serve the mall and the Safeway store. In April 1984, the lease was modified again, as the Safeway store was expanded in size from the original 10,000 square feet to the current size of approximately 17,000 square feet. The surface parking was preserved within the new parking structure. At the same time, the lease was extended to its current duration, with a base term expiring in 2005, and with two five year options for Safeway to extend the lease until 2015. IV. The Store The character, configuration, and location of the Plaza Shops Safeway store is important context for the issues at bar. Much evidence was presented by the parties to describe and locate the store within the Plaza Block. Also, a Court visit to the site provided a first-hand look at the store configuration and its environment. The salient details are outlined below. The Plaza Shops Safeway store differs from a typical, large scale suburban grocery store. To begin with it is far smaller, at 17,000 s.f., than the typical 40,000 to 50,000 s.f. “full service” store that Safeway now prefers. Nonetheless, the Plaza Shops Safeway store clearly offers a broader line than a typical convenience store or small market, as it offers a full range of groceries and various specialty departments including a deli, a bakery, a wine department and a floral department. Although the store is at the edge of the Plaza Shops mall and abuts the parking structure, it opens only into the interior of the mall, not directly into the parking structure. Therefore, in its pre-construction configuration, customers coming from the parking structure first entered the mall through a glass door and then proceeded down a straight corridor approximately 100 feet long to the Safeway store entrance. In addition, customers were not permitted to wheel their carts out into the parking lot; indeed, an automatic “Car-tronics” system operated to lock the cart’s wheels whenever a cart left the store. The parking structure served all Plaza Shops in general and there were no designated spots reserved for Safeway customers. To park in the surface lot, customers passed through a gate and received a parking ticket, which served as the basis for imposing a charge for parking. On Monday through Saturday, parking tickets were validated for Safeway customers with purchases from the store of at least $2. On Sundays, no tickets were required; there was no charge for parking. Depending on where spaces were available, customers might be able to park directly in front of the entrance to the mall, or they might be forced to park much further away. The underground parking structure which now serves the Safeway store likewise requires customers to drive through a gate and take a parking ticket, which if validated at the store, relieves the customer from paying the parking fee. A bank of four elevators leads from the underground parking up into the mall entrance corridor, just inside the door to the mall used by customers entering the mall from the surface parking lot of the now-closed parking structure. Again, customers might park near to the elevators or farther away, depending on where parking spaces were available. Thus, the only significant changes caused by the shift in parking are (i) that customers are parking underground, rather than in covered surface parking, and (ii) that customers must travel up one floor in an elevator, rather than enter the mall through a door. The walking distance in either case is essentially the same. More particularly, although the walking distance might vary depending on how close to the elevator or entrance door one is able to park, the distance from the elevator or entrance door to the store entrance is essentially the same. In neither case could customers drive their cars directly up to the store entrance, nor could they wheel their groceries out to their cars; instead, in both parking scenarios — surface or underground — customers must carry their groceries essentially the same distance from the store to their car. Given the store’s location in the interior of the mall and the placement of the parking structure between the store and the street, the store has no street “presence,” other than the signs that exist on the exterior of the parking structure, which are difficult to see from Crystal Drive. Neither the store itself nor the Plaza Shops mall entrance is readily visible through the two-story parking structure; indeed, absent the signs on the parking structure itself, there would be little or no evidence from the street of the presence of the store and the mall. The Plaza Shops Safeway store’s customer base and sales profile also differs from a typical large suburban grocery store. Both parties agree that the Plaza Shops Safeway store’s primary customers are pedestrians, either office workers or nearby residents who arrive at the store on foot. It is also clear that the average transaction size is relatively small, averaging about $8 per customer during weekdays, and about $13 per customer on the weekends. Unlike a typical grocery store where weekend sales are generally higher than weekday sales, Saturdays and Sundays at the Plaza Shops Safeway store show smaller average sales than weekdays, and together weekend sales appear to account for 24% of the store’s total sales. In sum, whether because of the nature of the store, the inability to cart groceries to a car, or the large number of office workers and residents in close proximity to the store, it is clear that most customers to the Plaza Shops Safeway store travel to their on foot and purchase relatively small quantities of groceries. Finally, it is important to note that competition in the general trade area (within 1 to 2 miles) has recently increased markedly, with the opening of two full-sized grocery stores in the area, a Shopper’s Food Warehouse store in 1997 and a Harris Teeter store in 2001. As discussed below, these competitive openings had a significant impact on the Safeway store’s sales. Furthermore, Safeway’s documents indicate that the store collects only about 5% of the area’s total grocery trade dollars. Yet another potential future adverse impact on the Plaza Shops Safeway store is the relocation of the United States Patent and Trade Office (“PTO”) from several buildings in the Plaza Block and nearby to another location several miles away in Alexandria. Record testimony indicates that it will take six months to a year to refurbish and lease the offices vacated by the PTO. Assuming, as the record reflects, that a substantial portion of the Plaza Shops Safeway store’s customer base is pedestrian traffic from the nearby office buildings, the relocation of the PTO is likely to have a significant adverse impact on the store’s sales for at least six months to a year while the vacated spaces are refurbished and re-leased. V. Quantifying the Significance of Safeway Customers Who Drive The parties dispute how many customers, in fact, drive to the store, and what percentage of sales are attributable to those customers. In an attempt to answer these questions, the results of parking validation data analysis and three separate surveys were presented in evidence. The most reliable data available for quantifying the number of Safeway customers using the surface lot in the parking structure before it was closed is the historical data on the number of customers who had their parking tickets validated at the Safeway store each day. Parking validation data is available for November and December 2002, which was prior to the closing of the parking structure, and for January 6 through February 7, 2003, which is after the closing of the parking structure and the shift to underground parking. The November and December parking data reflects that, on average, approximately 50 tickets were validated per day. Other Safeway financial data indicates that, from October to November of 2002, the number of transactions per day at the Safeway store averaged approximately 1900 customers per day. Thus, on an average day, according to this data, only 2.6% of Safeway’s customers had their parking tickets validated. Assuming that some small percentage of customers who parked in the lot fail to have their parking tickets validated, this data suggests that approximately 3% of Safeway customers used the surface parking structure prior to its closing. The Safeway parking validation data subsequent to the closing of the parking structure and the shift to underground parking reveals a sudden drop in validations followed by a gradual increase in the parking figures. The parking structure was closed on Monday, January 6, 2003. In the first week after the closure, there were 21 validations per day on average, well below the November-December average of 50 validations per day. Thereafter, however, the average number of validations rose to 23 per day for the second week, 36 per day for the third week, 40 per day for fourth week, and 38 per day for the fifth week, ending on February 8. This data suggests that while the switch to underground parking may have had an initially adverse effect on the number of Safeway customers who drive to the store, that effect was temporary, suggesting that customers’ perceptions regarding the underground parking are changing and they are adapting to the new parking arrangement. A second set of data available on parking for the Plaza Shops Safeway store is a parking demand study performed by Go-rove/Slade Associates, Inc. (“Go-rove/Slade”) in February 2002. In this study, interviewers positioned at the parking ticket dispensers for the first and second level of the parking structure questioned drivers entering the lot as to their destination. Drivers were asked whether their destination was office or retail, and those who indicated retail were asked if their destination was Safeway or some other retail store. Data was collected on four different days in February, in three different time slots for each day, 8-10 a.m., 11:30-1:30 p.m., and 3:30-5:30 p.m. From the data collected, the percentage of parking lot customers naming Safeway as their destination was calculated. In the various time periods on the four different days, the percentage drivers entering the lot indicating that Safeway was their destination ranged from 2% to 9%, with one period at 20%. The average number of parking lot customers per day in February 2002 was 599. Thus, multiplying the average number of parking lot customers per day by the percentage of parking customers who indicated that they were Safeway customers suggests that somewhere between 12 to 54 Safeway customers were parking in the lot on average per day in February 2002. Thus, this study yields figures lower than the parking validation data, perhaps because its data sample covers only portions of the day. Still, even if this factor is taken into account, this study is not inconsistent with the parking validation data. Thus, this survey, although flawed, is nonetheless useful confirmation of the parking validation data, and is accorded weight here only to the extent that it suggests that the parking validation figures are not inaccurate. In January 2003, CESC commissioned a second Gorove/Slade study. This study, performed in connection with this litigation, attempted to determine the percentage of customers who drove to the Plaza Shops Safeway store as compared to those who walked. Safeway customers were polled by two Gorove/Slade staff members, who asked the Safeway customers whether they had driven or walked to the store, and if they had driven, where they parked. Data was collected from 6 a.m. to 10 p.m. on Tuesday through Sunday, January 14 to 19, 2003, and Tuesday through Sunday, January 21 to 26, 2003. The survey staff was instructed to interview as many customers as possible; in total, in the twelve days 5,219 customers were surveyed. Of those surveyed, only 165, or 3%, indicated that they had driven to the store. Safeway objects to the use of this data on two grounds. First, Safeway contends that the sampling method is not scientific or random. Rather than following a predictable pattern, such as interviewing every fifth shopper, the survey staff was simply instructed to interview as many as possible. Safeway argues that this creates the possibility that the results are skewed as a result of convenience bias in the sampling. For example, those who were carrying more groceries might be less likely to stop and participate in the survey, and those customers might be more likely to have driven to the store. Furthermore, because only two staff members were conducting the interviews, they might not be able to keep up with the stream of customers at busier times. Safeway contends that shoppers at the busier times are therefore proportionately underrepresented in the sample. Second, Safeway points out that this survey is of limited use because it was conducted after the surface lot in the parking structure was closed to Safeway shoppers and after the parking had already been shifted underground. Thus, Safeway argues, the survey results cannot capture those Safeway customers who had decided not to shop at the store as a result of the parking switch; instead, it counts only those who were willing to park underground. In Safeway’s view, the number of customers lost due to the switch, if any, is a central issue in dispute here, and thus this post-closure study is of little value in answering that question. Contrary to Safeway’s assertions, however, these flaws in the customer intercept survey are not so significant as to render the study untrustworthy and hence inadmissible. See Dick’s Sporting Goods, 188 F.3d 501, 1999 WL 639165 at *5 (describing trustworthiness standard). Although far from perfect, the study did capture a significant percentage of Safeway customers. The 5,219 customers interviewed represents 435 customers interviewed on the average survey day, a significant proportion of the approximately 2000 customers per day who shop at the store. Furthermore, unlike the parking demand survey, data was collected from 6 a.m. to 10 p.m., including weekends. To be sure, the data can only provide a picture of the post-closure Safeway customer profile, but for this limited purpose it appears relatively trustworthy. In summary, the parking validation data persuasively suggests that approximately 50 Safeway customers use the surface parking lot on an average day, which represents only 3% of the Safeway store’s average daily customers. By comparison, taking the range of percentages of parking structure entrants headed to Safeway reported in the Gorove/Slade 2002 parking demand survey and projecting those percentages over the average daily usage of the parking structure yields the conclusion that a range of 12 to 54 Safeway customers used the parking structure on an average day. These figures correspond to approximately .6% to 3% of Safeway’s average daily customers. Finally, the 2003 customer intercept survey, performed after the closing of the parking structure, suggests that 3% of Safeway’s average daily customers use the underground parking lot. Taken together, these three studies tend to show that the percentage of Safeway customers who drive to the store and park in the retail parking lot is small and that the closing of the surface parking lot and the subsequent switch to underground parking has not had a significant impact on Safeway customer traffic. Safeway conducted its own study for purposes of this litigation. It commissioned the Polling Company, Inc. (“PCI”) to perform a telephone poll of Safeway card customers (i) to quantify the usage of the surface parking lot prior to its closure and (ii) to assess customers’ attitudes concerning underground versus surface parking and the likely effect the shift to underground parking would have on their shopping habits. The survey consisted of 37 questions. The poll was conducted using information provided by Safeway concerning Safeway shoppers with Safeway Club Cards who shopped at the Plaza Shops Safeway store during the fourth quarter of 2002. From the Club Card information collected by Safeway, a list of 12, 171 shoppers was compiled. From this list, 8,292 usable phone numbers were retrieved. On January 13 through 15, 2003, 21,000 telephone calls were placed to those numbers, resulting in only 353 completed interviews. Thus, of over 20,000 calls, 98% resulted in no data because there was no answer, because the respondent was not qualified, because the respondent declined to participate in the survey, or for some other unknown reason. Survey participants were screened to ensure that they were over 18 years of age and that they were primarily or jointly responsible for grocery shopping in their household, and to confirm that they shopped at the Plaza Shops Safeway store. In an effort to ensure a representative sample, PCI analyzed data provided by Safeway setting forth each card holders’ decile ranking with regard to the average amount spent per transaction, and weighted the survey results to ensure a proper representation of low, middle, and high spending shoppers. According to PCI’s president, Ms. Kellyanne Conway, the margin of error for this survey is plus or minus 5.7% at the 95% confidence level for the overall results, and higher for the data provided on smaller subgroups, such as the high spending shoppers. According to Ms. Conway’s testimony, 22% of the survey respondents reported that they drive at least half of the time to the store. This population is referred to in the study as “majority drivers.” Seventeen percent of those surveyed reported that they always drive. Thirty-eight percent of the customers reported that they drive at least 1% of the time to the store. Anyone who reported driving at least 1% of the time is considered a “driver” for the purpose of the study. Not all of these drivers used the surface parking lot that is the subject of this litigation. Of the drivers surveyed, only 66% reported that they typically parked in the now-closed surface level lot next to the Safeway store. These quantitative figures from the telephone survey are difficult to reconcile with the parking validation data. For example, if 17% of customers always drive, and they park in the surface lot 66% of the time, they should account for 17% x 66% or about 11% of Safeway’s daily average of approximately 2000 customers. This data thus predicts about 220 people parking in the surface lot per day from this group. That number is a low estimate of the overall number of Safeway drivers on an average day predicted by this study, as it does not include those who drive some of the time to the store but not always. On the other hand, we know that on average only 50 parking tickets per day were validated by Safeway in the two months prior to the closing of the surface parking lot. It is very unlikely that only a quarter of those who used the surface have their parking tickets validated. Yet, the telephone survey data is not completely irreconcilable with the parking validation data. For instance, the difference in results could be accounted for if those who drive to the store shop far less frequently at the store than those who walk, which would account for the drivers’ infrequent presence in the surface parking lot. At any rate, the methodological problems discussed below cast doubt on whether the telephone survey data can be reliably used to quantify the number of shoppers who drive to the Safeway and contradict the parking validation data. The telephone survey also seeks to provide information about the survey respondents’ attitudes towards surface parking and underground parking in general, as well as their attitudes about the change in parking at this Safeway store. Thus, when asked the general question of which type of parking they felt was more convenient, 71% of survey respondents reported that they found ground level parking more convenient, compared to only 12% who found underground parking more convenient. Of those who reported driving to the Safeway store at least half of the time, 87% found ground level parking more convenient than underground parking as a general matter, while only 6% found underground parking more convenient. Similarly, 71% of all survey respondents, and 83% of majority drivers felt that ground level parking was safer, as compared to 11% of all respondents and 6% of majority drivers who felt that underground parking was safer. After being informed that the surface parking lot was currently closed at the Crystal City Safeway store and that customers were now directed to park in the underground lot below the mall, 25% of all survey respondents indicated that this change made them less likely to shop at the store (11% reported they were “somewhat less likely,” and 14% reported they were “much less likely”). Of the majority drivers, 53% reported being less likely to shop at the Safeway store as a result of the current closure, while 24% of high spending shoppers, that is, those in the top 40% in terms of per transaction sales, indicated that they are less likely to shop at the Safeway store. If this change were made permanent, 27% of all customers, 60% of majority drivers, and 24% of high spending shoppers reported that they are less likely to shop at the Crystal City Safeway store. Of course, this data indicates only that the shoppers report that they are “less likely” to shop there, it does not provide a basis by which one could calculate how many shoppers would in fact cease shopping at the Safeway store or reduce their visits to the store in response to the change in parking. It should also be noted that, of all the shoppers surveyed, 62% indicated that the current change in parking would have no effect on their likelihood of shopping at the store, while 11% indicated that they would be more likely to shop there after the change in parking. There are substantial methodological problems with the telephone survey data that cast doubt on the quantifiability and reliability of the results reported. First, the relatively small yield of interviews granted compared to customers contacted suggests that those answering the survey may not in fact represent typical Safeway customers. Out of 12,171 identified Club Card shoppers, 8,292 had usable phone numbers listed, yet the 21,000 calls which were placed yielded only 350 interviews. Clearly, many who were qualified to answer the survey chose not to do so, and those with the time and inclination to answer a 37 question telephone survey may not be representative of the customer base as a whole. This raises the possibility that some kind of sampling bias may have occurred in the gathering of the results. Second, the screening criteria used at the outset of the survey may have skewed the sample towards those who are more likely to buy groceries in large quantities, and hence, those who may be more likely to drive. Telephone numbers were available only for those shoppers who held Safeway club cards. Cardholders were responsible for 56% of the transactions in the fourth quarter of 2002, and thus represented a bare majority in terms of the number of transactions, but were responsible for 73%, or almost three-quarters, of the sales in the same period. This indicates that the cardholders as a group buy more per transaction than non-cardholders. Moreover, survey respondents were asked whether they were “primarily responsible for shopping and purchasing the food and groceries for the household.” Only those who answered yes were kept in the sample. It is clear that the Safeway store has a large population of lunchtime and convenience shoppers; yet these shoppers are not included in the survey unless they are also the primary grocery shoppers for the household. In short, the sample was likely skewed toward a subclass of Safeway shoppers. Next, with respect to the questions on customer attitudes towards underground parking, the questions posed did not make clear that the distance a customer would have to walk would remain the same, whether parking underground or above. Thus, there is no way to know what assumptions the shoppers made in responding to these questions. Taken together^ these methodological flaws, combined with the unexplained difference between the survey results as to the number of Safeway drivers and the much lower parking validation numbers, suggest that the telephone survey should be afforded less weight on the quantitative question of how many of Safeway’s customers regularly drive to the store. By contrast, the parking validation data and the results of the two Gorove/Slade surveys are more generally consistent, and the parking validation data in particular appears the most reliable data on this question. In sum, the data presented in all four studies, taken as a whole and considering the methodological flaws of the surveys presented, leads to the conclusions that substantially less than 10% of the Safeway store’s customers, indeed, likely closer to 3% of the customers, drove to the store and parked in the surface parking area on an average day. A more difficult question is what percentage of sales is attributable to these drivers. Both the average sales per transaction figure of $8 and the breakdown provided of the number of transactions in the various price ranges indicate that a large proportion of the transactions at the store are very small. In this regard, then, those who spend more per transaction will have an effect on overall sales disproportionate to their number in terms of percentage of transactions. In an attempt to quantify this effect, Safeway presented data late in the trial indicating that transactions over $30 account for 24% of the total sales revenue at the store, even though they represent only 4% of the total transactions. Safeway contends that this data shows that drivers, although a small percentage of customers on a given day, are responsible for a significant percentage of store sales. This contention depends on the unproven assumption that the highest spending shoppers are likely to be drivers. While this assumption is not implausible, it is not supported by any persuasive data on the precise point. In any event, even assuming that the small percentage of shoppers who are drivers account for a disproportionately large share of store sales, this does not affect the result reached here because the record persuasively reflects that the number of shopper-drivers and weekly sales revenues are returning to the levels that existed prior to closure of the surface parking area. This is consistent with persuasive record testimony that shoppers’ negative perceptions of underground parking, assuming they exist, are amenable to change and indeed that shopper-drivers adapt readily to underground parking. Safeway further argues that those who drive to the store are more likely to spend more at the store per transaction as compared to walkers, who must carry their groceries back to their destination. The conclusion that there is some correlation between high per-transaction sales and those who drive to the store is plausible, even though in this instance customers may not wheel their carts directly out to their cars, so that even the drivers must tote their groceries by hand at least some distance. Nonetheless, the strength of the correlation is unknown, and no persuasive data has been provided regarding the actual revenue generated by those who drive to the store. In sum, the best data available indicates that substantially less than 10%, and probably closer to 3% of Safeway customers drive to the store on an average day. While it is true that the majority of customers may regard underground parking negatively, Mr. Buckley, CESC’s expert, persuasively testified based on his experience with similar urban redevelopment plans across the country that these negative perceptions change readily and customers adapt expeditiously and well to underground parking, provided steps are taken to address concerns regarding convenience and safety. Indeed, the parking validation numbers from January 2003 persuasively suggest that Safeway customers at the Plaza Shops store are, in fact, following this pattern and in large measure are adapting well to the underground parking. VI. Recent Sales History and Performance Historical sales data indicates that there is a clear, long term-trend of declining sales at the store, dropping from an average weekly sales figure of $151,700 in 1996 to only $117,500 in 2002. The trend line is not uniformly negative, but rather shows substantial sales declines in 1997 and 1998 followed by modest increases in 1999 and 2000, and then large declines again in 2001 and 2002. Safeway therefore argues that the store sales data indicates that the store had successfully “turned the corner” after taking a substantial “hit” in sales following the opening of the Shoppers Food Warehouse store in 1997, and that the recent sales figures suggest that the store was again “turning the corner” after the opening of the Harris Teeter store in 2001. Even assuming this characterization is accurate, the data nonetheless reveals that, by 2002, sales had decreased substantially as compared to the 1996 figures. In 2002, the store ranked 134th out of 136 Safeway stores in the Eastern Division in terms of average weekly sales. The clear trend of declining average sales over time establishes that the store is suffering competitively, and raises substantial questions concerning its long-term viability. Yet, despite the declining sales, the store remains marginally profitable. Aside from one negative year in 1998, the store’s operating income remained positive from 1996 to 2002. Nonetheless, the short range trend on operating income is negative, dropping from a high of $6,500 in average weekly operating income in 2000 to $3,800 in 2001 and then down to only $1,800 in 2002. In 2002, the store ranked 118th out of 136 Safeway stores in the division in terms of average weekly operating income. Again, Safeway argues that the sales data indicates that the store has recovered and will continue to recover from competitive pressure owing to new grocery store openings in the area. This optimistic view is questionable and does not erase the fact that, the figures indicate that the average operating income has recently declined to a barely positive margin averaging only $1,800 per week. In short, the historical sales and income data indicate that, prior to the closing of the parking structure on January 6, 2003, the store could aptly be described as “on the bubble,” ie., still a marginally profitable store for Safeway, but with serious questions regarding its long term viability and obvious vulnerability in case of a further sales decline. In this regard, Thomas Castleberry, the Vice President of Real Estate for the Eastern Division, testified in response to a hypothetical question that, given the current market conditions, he would not now choose to invest in a 17,000 s.f. Safeway store in the current store location, even if the surface parking situation remained unchanged. Nonetheless, Castleberry testified, unconvincingly, that in his judgment, the store would remain profitable through the end of the lease extensions in 2015, provided some remodeling and renovation were performed on the store, but only if the surface parking remained unchanged. Also available in the trial record is recent sales data concerning the weeks immediately before and after the January 6, 2003 closing of the surface parking structure and the redirection of Safeway customers to the underground parking lot. For the last four weeks of 2002, weekly sales at the store averaged $108,700, and for the week ending January 4, 2003, the final week before the parking structure was closed, sales totaled only $94,169. Immediately after the parking structure was closed, in the weeks ending January 11th and January 18th, sales rose to $118,899 and $118,574 respectively. Sales decreased to $112,703 for the week ending January 25. Taken together, these three weeks of sales figures suggest that the removal of surface parking did not affect sales, as these sales figures actually increased slightly over recent sales figures, and are more or less in line with .the $117,500 weekly sales average for all of 2002. Safeway, however, contends that the January figures indicate that closing the parking structure hurt sales, because the weekly figures are 3.9% to 6% lower than sales figures in the same three weeks in January 2002. Significantly, however, sales in the week ending January 4, 2003 were down 12% over sales in the same week in 2002. In other words, it appears that the 2003 sales figures are generally lower than the 2002 figures, so that comparison with 2002 figures may reflect a general downturn in sales rather than any effect attributable to the closing of the surface lot. Moreover, the increase in sales from $94,169 to $118,899 in the very week that the parking structure closed not only casts doubt on Safeway's contention that the change is actually hurting its sales, it also persuasively suggests that something other than the parking changes are driving the store’s performance figures downward. VII. Negotiations to Expand or Move the Safeway In 1997, Safeway began considering plans to renovate, expand or move the store, none of which were ultimately implemented. The store has remained essentially unchanged since the 1985 expansion and renovation. Typically, according to testimony from Mr. Castleberry, Safeway considers remodeling its stores every eight to twelve years; thus, by this standard, the Plaza Shops Safeway store was then due, and is now long overdue, for a revitalization. In addition, the series of plans to renovate, expand, or move the store reflect Safeway’s efforts to address the challenges the store faced, due to its size, location, and increased competitive pressure. Beginning in 1997, Safeway considered remodeling the store in its current location. Plans for the renovation were developed by local Safeway executives and were submitted to the corporate headquarters in California. At different times, renovation proposals costing $1.3 million and $1.7 million were submitted, but never finally approved. The renovation plans were abandoned in early 1999 when Safeway and CESC commenced discussions regarding the expansion of the store at its current location to 30,000 s.f. This plan would have expanded the store toward Crystal Drive, where the parking structure is located, but would have retained some surface parking for Safeway customers. Besides providing greater sales space, the expansion would have improved Safeway’s visibility and street presence by expanding the store towards the street. Safeway ultimately rejected this plan, largely because 30,000 s.f. did not provide enough space to offer a full-service Safeway grocery store, although site plan considerations were also an issue. In sum, Safeway determined that the cost of the expansion to 30,000 s.f. could not be justified by the expected returns on a store that size in that location. In the summer of 2000, negotiations between the parties turned to a possible relocation of the store to a new location within Crystal City, at the intersection of 18th Street and Crystal Drive (the “18th Street location.”) There, the parties planned to construct a much larger store of approximately 50,000 s.f. This space would allow Safeway to provide a full service grocery store with all the amenities typical of a large, full-service Safeway store. The corner location would also greatly improve Safeway’s visibility and street presence. Notably, parking at the 18th Street location was to be entirely underground. To mitigate Safeway’s concerns that grocery customers typically find surface parking more convenient, plans were discussed to provide dedicated underground parking spaces for the grocery store as well as a dedicated elevator, an escalator, and stairs leading from the parking garage to the store. Local Safeway executives submitted and favored a plan to the corporate office in California, projecting an $11.6 million investment in the new store at the new location. Corporate headquarters voiced a concern that the plan required underground parking and questioned whether the store location was sufficiently accessible to consumers in the trade area. Nonetheless, the expansion was still under active consideration by Safeway at the time it fell through and it is clear that the responsible Safeway executives in this division, ie. Mr. Castleberry, were entirely willing to accept underground parking in connection this proposal. Through no fault of either party, this relocation plan was scuttled after September 11, 2001, because of security concerns regarding public parking under a building in which the Department of Defense was a tenant, as was the case at the 18th Street location under discussion. Thereafter, negotiations between the parties returned again to plans for the store at its current location in the Plaza Block. Significantly, however, in 2000, while the parties were considering the relocation of the Safeway store to the 18th Street block, CESC developed plans to transform, revitalize, and redevelop the Crystal city area, including the Plaza Block. These plans and their timing are fully discussed below and include replacing the parking structure that served the Safeway store with a row of new retail stores facing onto Crystal Drive. Thus, once it became clear that the Safeway store would remain in its present location, the parties’ negotiations turned to accommodating or expanding the existing store within the new plans for the Plaza Block. It is these negotiations, and Safeway’s refusal to consent to the elimination of its parking structure, that led to this action. VIII. The Crystal City “Repositioning” Project The demolition and replacement of the parking structure with new retail space is part of a larger revitalization plan affecting much of Crystal City. Changes include the development of a new “main street” by changing Crystal Drive, currently a one-way street, into a two-way street lined with outdoor cafes, restaurants, and shops. These and other changes will alter the current, awkward one-way street layout into a more typical and convenient urban grid plan. With the elimination of the parking structure, all parking would be moved underground, with two new entrances to the parking garage replacing the current single entrance. The plan also involves an improved landscape for pedestrians, a broad sidewalk, and new pedestrian access points to the Plaza Shops mall. CESC plans to invest as much as $40 million in the project. CESC’s redevelopment plans for the area including the Plaza Block required significant changes to the Arlington County’s master plan as well as rezoning. Given this, the plans were subject to thorough review and approval by Arlington County. The plans were submitted to the County beginning in October of 2000, and were ultimately approved in May of 2001. Thus, long before the necessary abandonment of the plans for an 18th Street store, CESC had already invested substantial funds in planning, retaining experts and consultants, and in winning planning and rezoning approval from the County. CESC’s expert, Mr. Buckley, who also served as a consultant on the development of the Crystal City revitalization project, described the revitalization project as typical of the modern “street retail” approach to urban development, and contrasted it sharply with the existing Crystal City environment, which he described as an outdated holdover from the 1960s and a “concrete jungle” with little or no street presence. Mr. Buckley opined, convincingly, that the project would benefit all of Crystal City’s tenants and the general public by “rebranding” the area as a “retail destination.” According to Mr. Buckley, the more active street front and new mix of restaurants and shops would extend retail activity into the evening hours and weekends and draw more customers from the general area, to the benefit of all tenants and the general area. Based on his experience with similar projects in other urban areas, Mr. Buckley also predicted the changes would be of great benefit to the Safeway store, notwithstanding the change in parking. Specifically, Mr. Buckley argued that the revitalized street front and increased retail activity would draw more customers into the Plaza Shops mall and the Safeway store, that those driving to the store would find the new traffic configuration more convenient. Mr. Buckley also testified persuasively, based on his experience with the Prudential Center redevelopment in Boston and elsewhere, that customers’ negative perception of underground parking can be altered, and that urban customers readily adapt to new traffic patterns and parking situations given an improved overall shopping experience. The record does reflect that no leases have yet been executed, that the mix of tenants remains in flux, and that the ultimate redevelopment plan may not reflect the ideal plan and mix of tenants advocated by Mr. Buckley. Safeway points to some evidence that this is so. A heavier emphasis on restaurants and fewer retail stores might be less beneficial to Safeway, because, as Safeway argues, dining customers may be less likely to combine going out to dinner with a shopping visit, and because the new restaurants may capture some of Safeway’s customers’ food dollars. Mr. Buckley countered, noting that customers are not so rigid, and may often grocery shop after a dinner at a restaurant, though they are concededly not likely to do so before dinner. While the precise tenant mix remains unsettled, it appears likely on this record that CESC’s urban revitalization project will have a beneficial effect on the Plaza Shops Safeway store even given the switch to underground parking. IX. Safeway’s Withholding of Consent to the Proposed Common Area Alterations Understandably, much record evidence is devoted to the negotiations concerning Safeway’s refusal to consent to the proposed changes to the common area required by the urban revitalization project. Testimony was provided by Mr. Castleber-ry and Avis Black, who handled the negotiations for Safeway, and Henry Fonvielle, CESC’s Senior Vice President in charge of the retail department, who handled the negotiations for CESC. In addition, the record contains numerous letters between the parties with regard to the negotiations. The salient details of the negotiations are recounted here. After the 18th Street relocation plan fell through, Safeway’ once again returned to considering how to renovate the store in its existing location in the Plaza Block. In the meantime, CESC considered how to incorporate the Safeway store into its plans for the redevelopment of the Plaza Block. In November of 2001, CESC had plans drawn up which included a Safeway store of approximately the same size (50,000 s.f.) as had been planned for the 18th Street location within the Plaza Block. These plans were unsatisfactory, however, as the vastly expanded store took up almost all of ,the street front space, thus conflicting with CESC’s urban revitalization design for an active and varied street front. These plans were not presented to Safeway. Starting in December 2001, CESC presented plans to Safeway showing either the existing Safeway configuration within the remodeled Plaza Block, or a proposed expansion of the Safeway store to 30,000 s.f. within the remodeled Plaza Block. All of these plans involved the elimination of the parking structure and the surface parking lot that served the Plaza Shops mall and the Safeway store and its replacement by new retail stores. All retail parking, including Safeway’s, was to be rerouted to the underground garage. Safeway deemed the plans presented in December 2001 “utterly unacceptable,” in part because Safeway would lose its loading dock area adjacent to the store and would be required to share loading space with other tenants 100 feet away from the store. Subsequently, CESC developed revised plans in January 2002 which addressed these loading area concerns. Safeway was to retain its loading dock precisely as it presently exists, and other tenants would be required to use a central loading facility immediately adjacent to Safeway’s loading dock. On February 1, 2002, CESC submitted the two new, alternative designs to Safeway, and requested Safeway’s consent to the proposed changes to the common area. Safeway rejected both plans and refused consent. Safeway did not deliberate over this decision; instead, the matter seemed relatively clear to Safeway. On the one hand, earlier studies regarding expansion in this location suggested that the added benefits of a store expanded only to 30,000 s.f. would not match the benefits of a larger expansion, and could not justify the cost of such an expansion. Indeed, in Safeway’s view, this alternative was essentially the same as the previously considered 30,000 si. expansion, yet with the added negative of the elimination of the surface parking. For Safeway, remaining in the current location at the current size, but without the surface parking lot, was not acceptable. In addition, Safeway continued to have loading and visibility concerns. In response to this refusal, CESC sent letters on February 15 and March 21, 2002, further explaining the expected benefits to Safeway of its urban revitalization project, offering additional concessions, and again requesting Safeway’s consent. Thereafter, in an April 8, 2002 letter, Safeway formally stated the reasons for refusing to consent to the plans. Safeway voiced three main concerns, consistent with its earlier explanations, namely (i) that the elimination of surface parking and the shift to underground parking would be viewed negatively by customers and would result in a loss of sales, (ii) that the construction of new retail stores in place of the parking structure would relegate Safeway to a “secondary, interior retail area,” reducing its visibility and presence, and (iii) that the consolidated loading area would require Safeway to share its loading area with other tenants, creating interference with Safeway’s vital loading operations. In further letters and telephone conversations, the parties continued to discuss the matter, with CESC arguing that Safeway would benefit from the overall plan and offering further concessions, while Safeway continued to refuse to consent. During the course of these letters and conversations, CESC sought to alleviate Safeway’s concerns on several fronts. With regard to loading, CESC made clear that Safeway would retain its current exclusive loading dock, with better access, and a dedicated dock master to handle any potential interference between Safeway’s deliveries and those of other tenants using the adjacent common loading area. With regard to visibility, CESC promised new and improved signage indicating the presence of Safeway and directing customers to the underground garage, as well as improved pedestrian access and new treatments of the entrance to the Plaza Shop malls designed to attract more pedestrians into the mall. CESC sought to counter Safeway’s concerns regarding the negative impact of the switch to underground parking by pointing out that the urban revitalization project would bring new traffic and customers to the general area, which would, in CESC’s judgment, outweigh any negative effects on parking. CESC also suggested other concessions, such as dedicated parking in the underground lot for Safeway customers, and the construction of a dedicated new elevator that would take customers from the parking lot to a location directly opposite the store entrance. By August, 2002, CESC had also offered Safeway a reasonable guarantee of profitability, although the size and duration of that guarantee was never discussed because Safeway never indicated any interest. Nonetheless, Safeway remained firm in its position that the proposed changes were not desirable for the Safeway store and that the refusal of consent was therefore reasonable. Accordingly, Safeway did not pursue, or make inquiries concerning, any of the proposed CESC concessions. While these negotiation were ongoing, the parties also discussed a possible buyout and termination of the Safeway lease. Ms. Black performed a store closing analysis which suggested that the continuing value of the store and the lease was $2.5 million, and received permission from corporate headquarters to negotiate a buyout on that basis. When presented with this offer in the summer of 2002, CESC rejected it as far too high. In September, CESC eventually offered Safeway $1 million to terminate the lease and vacate. Neither party budged from its buyout negotiating position, and these talks did not bear fruit. By the end of August 2002, negotiations had deteriorated to the point that CESC informed Safeway that its refusal to consent was unreasonable, and that CESC would be forced to consider pursuing its urban revitalization project notwithstanding Safeway’s refusal to consent. In response, Safeway reaffirmed its intention to refuse consent. The instant action was filed soon thereafter, in October 2002. Notably, throughout this period of negotiations, Mr. Castleberry and Ms. Black did not conduct any analyses, quantitative or otherwise, to attempt to determine the actual effects on the store of the switch to underground parking. During this period, they did not attempt to discover how many of their current customers used the surface parking structure, or the sales attributable to those customers. They did not review available data on sales, nor did they review parking ticket validation records, in an effort to answer these questions. Instead, in refusing to consent to the elimination of the parking structure, they relied entirely on their business judgment, based on past experience with stores of various sizes in the area, with and without surface parking lots. In Safeway’s view, the company’s substantial experience in the grocery business was an adequate basis to conclude that the proposed changes would adversely affect the Plaza Shops Safeway store. Only after the entry of the temporary restraining order did Safeway and CESC undertake to conduct studies seeking to ascertain and quantify the effect of the loss of surface parking on the store. CONCLUSIONS OF LAW I. Jurisdiction and Venue There is subject matter jurisdiction pursuant to 28 U.S.C. § 1332 because there is diversity of citizenship and the amount in controversy exceeds $75,000. There is personal jurisdiction over both parties here because both parties regularly transact business in Virginia and both parties have an interest in real property that is the subject of this action. There is venue here, pursuant to § 1391(a)(2), because the real property that is the subject of this action is situated in this district. II. Reasona