Desperate times
Owner of Flights restaurants fuming over Mountain View landlord’s lawsuit for back rent amid COVID-19 pandemic
CORONAVIRUS
LOS GATOS >>
Sarah Hult had just put her two young children down for a nap when she heard a loud, insistent knock on the door. Her husband, Alex Hult, founder of four Bay Area Flights restaurants and former professional hockey player, was at the Los Gatos location, eagerly welcoming outdoor diners.
When Sarah Hult opened the door Saturday afternoon, a process server handed her a lawsuit.
After nearly five months of the COVID-19 lockdown that has been crushing small businesses, the landlord of Hult’s Mountain View restaurant — which has been shuttered since March — was suing for back rent.
“In the middle of all this, when you’re fighting to keep your business alive, they sue,” said Alex Hult, 35. “It’s superruthless.”
The landlords of his three other Flights restaurants — in Los Gatos, Campbell and Burlingame, which all are open for takeout and some outdoor dining — all have given him breaks in rent.
Alex Hult is one of a growing number of desperate and frustrated small-business owners caught up in legal dramas with landlords and insurance companies while their quarantined customer base and revenue streams are nosediving or nonexistent.
The Swedish immigrant, who was drafted by the San Jose Sharks as a teenager in 2003 but never played in the National Hockey League because of an injury, took his case to social media this week. “I am making it my mission to ensure this unjust and ruthless tactic will not be tolerated,” Alex Hult wrote on his
Facebook page.
Because the Mountain View restaurant is in Santa Clara County, he is protected at least until Aug. 31 by an anti-eviction ordinance passed by the Board of Supervisors. Though the moratorium for both residents and businesses does not forgive rent payments, it allows tenants to pay them back within a year with no late fees.
But that didn’t stop Roger Fields, a partner at Menlo Land & Capital as well as Peninsula Land & Capital, which owns more than a dozen commercial properties on the Peninsula, from demanding back rent — at nearly $27,000 a month, plus late fees and other damages in the lawsuit filed July 10. Neither Fields nor his partner, Lois Quilalang who had met with Hult about the rent dispute, responded to repeated phone calls and emails nor messages left with their receptionist this week. Their lawyer, Brendan Brewer, also did not reply to a voicemail and message left with his receptionist.
Steve Mitra, an assistant county counsel who helped draft the anti-eviction ordinance, explained that though landlords aren’t prevented from suing, “There are protections for tenants. Tenants can also invoke the protections to get damages if they get sued wrongfully.”
In the tight-knit restaurant community of Los Gatos, where Alex Hult lives and opened his second Flights restaurant in 2018, several restaurant owners said it was unfortunate that the landlord appeared to be “playing hardball.”
“There are two sides. The landlord is trying to protect herself legally from losing rent, but at the same time the timing is horrific,” said Andrea Romero, owner of Cin-Cin Wine Bar and Centonove Italian restaurant in Los Gatos whose landlords have renegotiated her leases since the coronavirus lockdown orders began in midMarch. One of them has been “overly gracious,” she said, temporarily cutting rent in half.
Alex Hult said he already had worked out arrangements
with his other three landlords, which included paying full rent in April, May and June — with the help of federal payroll protection program loans — then paying 50% of rent after that for the rest of the year. He had made the same offer to Quilalang, he said, but when she said she would apply his nearly $53,000 security deposit to make up the other 50%, he balked and told her to talk to his lawyer.
One of Alex Hult’s other landlords, Dave Schraeder, who owns the Campbell building, said he understood that compromises needed to be made in such an unprecedented time.
“There are going to be so many restaurants that are going to die,” Schraeder said. “When the winter comes, you’ll see them fold unless we as landlords can help get them through this period.”
For Schraeder, it’s good business to negotiate with struggling tenants, he said. If they go out of business, he would miss months worth of rent looking for a new tenant, if he could find one at all in these wildly uncertain times.
“Once this pandemic goes,” Schraeder said, “I need my rent. If the restaurant is filled up, I expect you to start paying me again.”
Since early in the pandemic, Alex Hult started Feed The Need Bay Area, helping raise $150,000 and with other restaurants giving away 12,000 meals to front-line workers and the elderly while keeping some of his employees on the payroll. His restaurants are named for the “flights” of wine, cocktails and appetizers and other items that are served in threes. He has had to alter his outdoor menu because the original included many shared plates, a no-no during the coronavirus.
Since mid-March, state and local officials have mandated a series of restrictions intended to keep the virus from spreading, including the closure of theaters and salons, for instance, and the prohibition of indoor restaurant dining. Though many restaurants offer takeout, relatively few have outdoor seating.
Josh Weeks, owner of Plumed Horse and La Fondue and two restaurants in Saratoga, said the landlords at his chocolaterie offered three months free rent before he even asked. At La Fondue, which has been closed since the lockdown, Weeks said the building’s owners have only asked for property tax and insurance until there’s more certainty about the restaurant business.
“I’m empathetic to both sides,” Weeks said of landlords and tenants. “Unfortunately, it’s premature. The lawsuit is premature and emotions are premature because we don’t know where the bottom is.”