Excited over the $10 million investment that real estate developer Merlone Geier Partners was making to update the University Village, restaurateur Jeff “Fro” Davis opted to keep his Tokyo Fro’s restaurant open after construction began last spring in the shopping center at Fair Oaks Boulevard and Howe Avenue.
Davis’ excitement gave way to frustration, he said, when his San Francisco-based landlord raised fees for insurance, maintenance and utilities without making what he felt were much-needed improvements to security and maintenance. Earlier this month, Davis’ frustration boiled over into a lawsuit that asserts his landlord has financially devastated his business by fencing off his patio, limiting parking access and providing inadequate safety measures.
“We’re probably down 35 to 40 percent,” Davis said, referring to comparable sales figures. “We can’t crack our number on a Friday night going on almost 12 weeks. We just can’t. Where are the people? The lunch crowd is typically faithful, but now they’re not coming anymore because they can’t find (parking) spots. You hang out here, and before we open, every parking spot will be taken in here. If you drive around the corner, all the construction vehicles are in the spots they’re telling us to park in.”
Greg Geertsen, a managing director at Merlone Geier, told me that he couldn’t comment on ongoing litigation but noted that his company is focused on rejuvenating University Village and has leases signed with 16 tenants. My colleague Bob Shallit reported on two new tenants – Zocalo and Buckhorn Grill – in March, but Geertsen said he has since signed deals with Pieology, Jimmy John’s gourmet sandwich shop, Menchie’s yogurt, Pressed Juicery, Edge yoga and spin studio, plus one of AT&T’s superstores.
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The center, he said, has 90,000 cars a day passing by it, and it also has attracted The Organic Coup, a chain of USDA-certified organic fast-food restaurants being built by former Costco executives Erica Welton and Dennis Hoover.
Davis and his attorney, Scott Radcliffe of Sacramento’s Alves, Jacobson Radcliffe, said they believe that Merlone Geier wants him out in order to give his space to a high-profile tenant who will pay today’s leasing rates. Davis’ lease, negotiated with the previous landlord in 2012, doesn’t expire until 2022. While Merlone Geier has publicly included Tokyo Fro’s in its architectural renderings of the shopping center, Davis said in his lawsuit that Geertsen privately offered him money to leave.
“We had a powwow on the bench at Bandera where the guy told me I had lost my passion for the restaurant business,” Davis said. “I had met this guy once or twice before, and he’s telling me that I had lost my passion. He said they were prepared to give me $100,000 to leave.”
Davis said he put a target on his back by challenging Merlone Geier on utility fees, construction plans and security measures. For the first time in Davis’ 13 years at the center, he said, two employees had their cars stolen. He said he also went out and swept up glass from the parking lot after break-ins of customer cars because he thought it would put off business.
He received a water utility bill for the first time, noting the prorated portion that various businesses owed on the water bill. Only Tokyo Fro’s portion of the bill factored in his patio space as part of the businesses’ square footage, even though Starbucks, Capitol Beer and Tap Room and others have tables in the center’s courtyard. So Davis went to the county to challenge the bill. It took eight months, Davis said, and he paid the bill in protest for the entire period until it was removed.
Since he began lodging protests, Davis said, he has received notices that he’ll be evicted for neon signs that advertise some of the 10 beers he has on tap because his lease does not authorize him to run a taproom. A construction fence blocked off access to his patio and rear door: That patio is often the springtime site of choice for graduation parties for students at nearby high schools and at Sacramento State. Without a rear door, Davis’ staff had to cart trash and food deliveries through the dining room.
Davis said he had to call the fire marshal to get access restored to the rear door. His landlord had the fence and padlocks removed, but in its place is a wooden tunnel that still effectively blocks hand trucks from delivering food. Employees, he said, won’t exit the rear door at night out of concern that a mugger might be lurking in it.
“They should have told us very clearly from the get-go what was going to happen here,” Davis said. “They should have came to us and given us compensation before all this. Instead, it’s ‘You didn’t get the hint. You didn’t get the buyout offer. You’re still here. Well, guess what? We’re going to turn up the heat until you leave.’ That’s exactly how it’s been. Every day, there’s something else goofy.”