Wa­ter­front Trust ends Sar­coa’s sub­lease

Claims it’s owed $226,000 in back rent

The Hamilton Spectator - - FRONT PAGE - NATALIE PADDON The Hamil­ton Spec­ta­tor

Hamil­ton Wa­ter­front Trust has ter­mi­nated Sar­coa’s 10-year sub­lease for al­legedly breach­ing its con­di­tions and rack­ing up hun­dreds of thou­sands of dol­lars in un­paid rent.

The gates at the har­bourfront pa­tio and eatery’s Dis­cov­ery Drive lo­ca­tion were locked and a no­tice of ter­mi­na­tion was posted on the glass doors Thurs­day morn­ing.

The move comes as a re­sult of “ma­jor and es­ca­lat­ing pro­tracted breaches of the sub­lease,” says a press re­lease from the wa­ter­front trust is­sued later in the day.

Events, in­clud­ing a wed­ding set for Fri­day night, are al­ready booked at the restau­rant’s Hamil­ton Wa­ter­front Trust Cen­tre lo­ca­tion, says Sar­coa’s lawyer, Kon­stan­tine Ket­set­zis.

“If the trust per­mits it, then we are very hope­ful that these wed­dings will con­tinue with­out re­stric­tion,” he said.

In a press re­lease, the trust said it is try­ing to work with Sar­coa and a “third party” to ac­com­mo­date pre­vi­ously sched­uled events.

The no­tice says Sar­coa breached the sub­lease by:

fail­ing to pay more than $226,072.68 in rent;

fail­ing to be open dur­ing the same hours and days as the ma­jor­ity of restau­rants in the Golden Horse­shoe;

op­er­at­ing a ban­quet hall on more than an oc­ca­sional ba­sis with­out the con­sent of the ten­ant;

us­ing the space for a pur­pose other than a fully li­censed restau­rant;

shar­ing the premises with JEM Hospi­tal­ity Group with­out prior writ­ten con­sent of the ten­ant.

The rent ar­rears are the ac­cu­mu­la­tion of “a num­ber” of un­paid months, said wa­ter­front trust ex­ec­u­tive di­rec­tor Werner Plessl.

Sar­coa’s lawyer said his client be­lieves there are no rental ar­rears and that the money owed is ac­tu­ally for hy­dro ex­penses.

Ket­set­zis said the restau­rant was charged a fixed amount for hy­dro, which in­cluded pay­ing for the roller rink and sur­round­ing prop­er­ties.

As for JEM Hospi­tal­ity, he said there has been no “struc­tural” change to the sub­lease but that a new gen­eral man­ager has come in and helped them re­brand.

“We deny each and ev­ery al­le­ga­tion,” Ket­set­zis told The Spec­ta­tor. “I will be ex­plor­ing my client’s le­gal op­tions at this time.”

Ward 2 coun­cil­lor and wa­ter­front trust board mem­ber Ja­son Farr re­ferred calls about Sar­coa to its lawyer, Louis Frap­porti.

Frap­porti could not be reached late Thurs­day.

The har­bourfront eatery has been locked in a $15-mil­lion le­gal bat­tle with the trust, its sub­land­lord, and the city since late 2015 for pre­vent­ing it from throw­ing pa­tio par­ties with am­pli­fied mu­sic. The up­scale restau­rant stopped play­ing out­door mu­sic be­fore bring­ing it back last year in an ef­fort to save its lag­ging busi­ness.

Sar­coa ar­gued its sub­lease with the wa­ter­front trust al­lows the busi­ness to hold the par­ties de­spite noise and zon­ing by­laws.

The trust has in­sisted the lease spells out that Sar­coa must com­ply with all city by­laws and de­nies it promised to ob­tain ex­emp­tions for them.

The restau­rant is on wa­ter­front lands that have been de­scribed as a jewel in the re­gion.

Co-owner Sam De­stro told The Spec­ta­tor this spring Sar­coa was shift­ing its fo­cus to spe­cial events to stay afloat after run­ning into by­law trou­ble over noise com­plaints about pa­tio par­ties.

Sar­coa’s wa­ter­front pa­tio was sup­posed to be open week­days with a brunch buf­fet on Sun­days, but flood­ing caused by high wa­ter lev­els in Lake On­tario had caused the pa­tio to close un­til the wa­ter re­ceded, Ket­set­zis said.

De­stro pre­vi­ously told The Spec­ta­tor the busi­ness was op­er­at­ing as best it could given “the lim­i­ta­tions that have been im­posed” and that they were “go­ing to do what­ever it takes … to keep this thing alive.” Ket­set­zis said that is still the case. “They will do what­ever they need to do to re­main there,” he said.

When asked about fu­ture plans for the space, Plessl said the board plans to meet next week to dis­cuss op­tions.

JOHN RENNISON, THE HAMIL­TON SPEC­TA­TOR

The Wa­ter­front Trust had the gates at the busi­ness locked Thurs­day morn­ing.

JOHN RENNISON, THE HAMIL­TON SPEC­TA­TOR

Sar­coa’s lawyer says he and his client “deny each and ev­ery al­le­ga­tion” made by Hamil­ton Wa­ter­front Trust.

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