Restaurant News & Reviews

Halal Guys franchisees sue Ice Blocks over rent dispute that has them facing eviction

The local franchisees of The Halal Guys, a fast-casual chain with a planned spot in midtown, have filed a lawsuit alleging their landlord at Ice Blocks gave them notice to pay rent or get out, even though they still haven’t been given keys to the place.

In a complaint filed last week in Sacramento County Superior Court, the local Halal Guys franchise, THG West 5 LLC, claims that following months of construction, Ice Shop LP has yet to provide the business with a square-footage measurement or access to the location at 1610 R Street.

THG West 5 says in the suit that it received a three-day notice, issued Oct. 8, to pay rent or quit the property.

According to the lawsuit, a lease agreement signed by both parties last October calls for an exact measurement of the space, at one point estimated at 1,454 square feet, to be provided to the franchisees in writing.

“In the event ICE SHOP has performed such a Premises Measure, ICE SHOP failed to provide a Premises Measurement Notice to THG or otherwise communicate such measurements to THG and therefore THG has no knowledge of what the BOMA (Building Owners and Managers Association) measurements of the Premises (are),” part of the complaint reads.

The Halal Guys franchisees also say in the lawsuit that the lease terms require 30 days advance written notice before providing access to the premises. It also states that rent obligations begin 120 days after the lease goes into effect.

The lease agreement in full is not included in the lawsuit filed Oct. 15, but excerpts of it are quoted and referenced.

The terms of the lease were set to go into place when construction and improvements finished at the newly developed Ice Blocks, the franchisees said. THG says it took photos May 15 showing ongoing construction, adding that at that time, the landlord “had only begun the framework on demising walls.”

“Without any other advance notice, on June 21, 2018, ICE SHOPS sent a Commencement Date Memorandum with a ‘retroactive’ term commencement date of April 7, 2018,” the complaint continues. “ICE SHOP chose the April 7, 2018 (date) arbitrarily without any prior discussion with THG. THG did not execute the Commencement Date Memorandum.”

The local franchisees say that along with the Oct. 8 three-day notice, Ice Shop LP’s attorney sent a letter informing them that rent was owed Sept. 4, the complaint says.

The franchisees seek “a judicial determination as to when and if the Lease term has commenced,” the lawsuit says, adding that it is ready and able to pay rent upon such a judgment.

The lawsuit additionally seeks recouped lawyer fees and “other and further relief as the court may deem proper.”

A spokesperson representing THG West 5 declined The Bee’s request this week for comment or further information, citing the recently filed lawsuit.

Ice Blocks is a mixed-use development along three blocks of R Street containing offices, residences, restaurants and other retail shops. Its first apartments sprung up last year.

Ice Blocks was conceived by Heller Pacific, a Sacramento-based developer with projects throughout the region and one in North Lake Tahoe.

Neither Heller Pacific nor its president, Michael Heller, are explicitly named in the complaint filed Oct. 15. Heller did not immediately return a request for comment Friday.

The Halal Guys was still listed under the “Coming Soon” section for Ice Blocks’ website Friday. A Halal Guys location in Davis opened over the summer.

In a separate case decided earlier this year relating to eatery square footage, a Sacramento jury ruled in favor of Estelle Bakery & Pâtisserie, which had sued developer Moe Mohanna for misrepresenting a downtown building’s size to charge the tent higher rent. That lawsuit was first filed March 2015.

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