Nov. 16 2018 10:00 AM

Waterfront Bar & Grill loses lawsuit over lease extension

This story has been updated.


FRIDAY, Nov. 16 — The doors at Waterfront Bar & Grill are still open, but likely not for long.


Ingham County Circuit Judge Joyce Draganchuk tossed out a lawsuit on Wednesday that the riverside restaurant had levied against the Lansing Entertainment and Public Facilities Authority. The ruling effectively halted its case against the city and will lead to its eventual eviction from the Lansing City Market, officials said.


Lansing Mayor Andy Schor said the ruling put to bed a case that lasted for months and will eventually allow a developer to help breathe new life into the struggling market alongside the Grand River. Plans are far from solidified, but Waterfront will ultimately need to vacate the premises before the transformation can take shape.


“The arguments we've made since the beginning were accepted by the judge, and we believe that we've proven victorious in this case,” Schor said. “We can start moving forward now. We believe LEPFA has ended the contract with Waterfront and they have to leave that space in a certain number of days.”


Schor announced plans earlier this year to close the City Market by the end of summer after the City Council slashed its annual subsidy in half to $40,000. Officials subsequently solicited proposals that would help allow the embattled facility to find a financially viable path forward into next year — just without Waterfront on board.


In May, after LEPFA had already moved to terminate its lease with Waterfront, owner Scott Simmons sought to take advantage of a perceived option to renew the agreement for the next three years. His lawsuit contended LEPFA illegally refused to honor the deal and had repeatedly “interfered” with Simmons’ business operations.


LEPFA attorney David Russell argued the choice for a renewal was written into the lease but that it didn’t give Simmons the right to unilaterally extend the agreement into 2021. That would only be feasible if both parties agreed to the decision. And they didn’t. He repeatedly noted those terms were never settled.


Russell and LEPFA President and CEO Scott Keith couldn’t be reached for comment for this update.


Simmons’ attorney, Laura Eisele, also didn’t return calls after the hearing but previously argued that any attempts to evict the bar from the market would have been illegal. She argued the restaurant would face “irreparable harm” should the lease be cut short, pushing the business to close and forcing 25 employees out of a job.


She also contended LEPFA had failed to effectively operate, promote and maintain the market. City officials turned away viable tenants, clogged parking spaces with food trucks and made “disparaging or disrespectful” comments about the restaurant after deciding to close the market and send Simmons packing, records state.


Russell noted LEPFA had every right to terminate the lease and was subject to governmental immunity for any claims of business interference. And Draganchuk ultimately agreed, granting a motion for summary disposition that effectively ended the lawsuit. Waterfront — barring a possible appeal — is expected to vacate the site.


“It certainly opens the door to move forward with whatever we're going to do with that property,” said Deputy City Attorney Joe Abood. “Now we'll need to get the premises vacated. There are a few more steps. There may be some appeal rights by the parties. We’ll see how this goes but LEPFA certainly won’t be appealing the ruling.”


LEFPA previously claimed Waterfront charted health, noise, parking and liquor licensing violations, giving the city an “independent and separate” basis to terminate the lease regardless. Simmons altered the space without permission and was once “intoxicated” at the bar before he “allegedly” committed an assault, filings state.


Records indicate, however, those liquor violation charges — including assault — were eventually dismissed.


Patrice Drainville, vice president of Simmons’ company, said the eviction hinges on a prior health code violation that was interpreted by Draganchuk as a violation of the lease. She said it was uncommon to be booted for a single violation and cautioned the restaurant’s eventual replacement to tread cautiously on city-owned waters.


Drainville also pointed to the ongoing operations of other LEPFA-managed properties like Groesbeck Golf Course — which was dinged by a county health inspector in 2016 for not having a food safety manager on staff — and the Cooley Law School Stadium, where mold was once found along beer keg lines inside a walk-in cooler.


“Everywhere in the county has had them,” Drainville added. “I’d hope they’d hold others to the same standards.”


Eisele, for her part, previously claimed those newly introduced violations were only a distraction crafted by the city to deflect her arguments. She also said Simmons was never notified about any potential breaches in the lease. Waterfront remained open on Friday, but officials said it was only doing so without a valid, written lease.


Drainville isn’t sure how long she’ll keep the doors open while her attorneys continue to ponder an appeal.


LEPFA, in accordance with state law, must still obtain a court-issued eviction order before anyone can forcibly remove Simmons and his staff from the premises. Schor also suggested he’d ultimately like to find a more amicable solution that would allow Simmons to vacate the premises on his own, peaceful accord.


Meanwhile, a handful of proposals to reshape the City Market space have been floating through city offices. Schor suggested “a few” people have voiced plans for the future of the site, including a crowdfunding effort to eventually reinvigorate the building. Those plans will be evaluated but were not available for immediate release.


Visit lansingcitypulse.com for previous and continued coverage at Lansing City Market.