Tuesday’s closure of the Alizadeh family’s Crush 29 restaurant in Roseville caught employees and patrons by surprise. But for two years, the restaurant’s owners had waged a legal fight to prevent their landlord from evicting them from Eureka Ridge Plaza.
The shopping center, at 1470 Eureka Road, is owned by U.S. Bank National Association, a trustee for investors who hold the mortgage. That group foreclosed in 2012 on the property, which developer Abe Alizadeh built and owned. He amassed a huge development and restaurant empire, but his fortunes fell amid the real estate downturn; at one time, Alizadeh’s corporate entities owed as much as $390 million in debt. When investors gained control of Eureka Ridge Plaza, they moved to evict Alizadeh’s Crush 29.
“We don’t dispute their right to foreclose,” said Saied Kashani, an attorney for the Alizadeh family. “The mortgage was not paid. They had the right to foreclose. What we’re questioning is why cancel the lease after you foreclose. The court ruled that, because of the foreclosure, they had the right to cancel the lease, but they also had the discretion not to cancel it….They did not cancel anyone else’s lease.”
Real estate attorneys told me that lease contracts generally contain a provision that a lease can be nullified if there’s a foreclosure or other changes to the mortgage agreement.
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Contacted about the closing, a handful of current and former Crush 29 employees told me that they still were hoping to collect back wages for as many as seven pay periods.
“I took myself off the schedule a month ago, but I still technically was working there,” said Timothy Peters, a server who got a second job at P.F. Chang’s to ensure a steady paycheck. “I was about six or seven weeks behind on checks, and he owed me $330 in tips.”
If the family is not current on paying wages, Kashani said, it is working to pay them. He said that a federal lawsuit against the Alizadeh family for millions of dollars in unpaid payroll taxes is pending.