Judge rules for Brewery Arts Center in lease dispute against Foodies Bystro

The Brewery Arts Center prevailed in Carson Justice Court Tuesday morning in the nonprofit’s quest to evict Foodies Bystro from its spot in the center’s facility at the corner of King and Division streets.

Judge Steven McMorris agreed with the BAC’s request to invalidate a portion of the lease that would have allowed Foodies to renew the lease for another three years. The judge found that the wording of the section was vague because it allowed for the lease to be renewed, but didn’t specify that the renewal would be under the same terms and conditions.

Foodies’ lawyer John Bartlett claimed that the construction of this portion of the lease inferred that the renewal would be under the same conditions, otherwise the renewal clause would have no reason to exist.

BAC Executive Director Gina Hill said she was very pleased with the judge’s ruling.

“We need to appropriate that space to better serve our artisan community,” Hill said. “Having a for-profit restaurant in the middle of that space didn’t serve our mission.”

Hill said they have no plans to lease the space, and will instead expand the center’s artisan store and use the space for related events. She said the rent being paid by Foodies ranged from $600 to $900 a month, and that it would not have much impact on the center’s finances.

The BAC also intends to apply for a permanent liquor license to sell beverages at their events, according to Hill, which is expected to increase revenue for the center. In the past, Foodies had been selling alcohol for events in the main building, while the BAC had used temporary permits to sell drinks for certain events.

The restaurant had been closed for 19 days as the legal case awaited its court date.

Foodies co-owner Rupal Martinez said they would be appealing the decision. She also said they have no plans to reopen in another location.

The property in question is owned by Carson City and leased to the BAC.

The case put the BAC in an odd position of asking the judge to invalidate a lease that was authored by the BAC’s former Executive Director John Shelton. Hill said the lease agreement was solely the work of Shelton, that it was poorly written, and that he failed to seek advice from the board which included members of the legal and real estate communities.

“This is why you need lawyers to draft lease agreements,” Judge McMorris said during the hearing.

“This is really bad for small businesses in Carson City,” Martinez said of the judge’s ruling. “If anyone wants to get out of their lease they just have to go to court and tell the judge they changed their mind.”

Shelton and the BAC board had made previous efforts to evict Foodies, stemming from several disputes with the owners. At the core of many of these disputes were accusations the owners of Foodies leveled at Shelton that included not promoting enough events at the center, and charges of nepotism because Shelton hired his wife and her two sons to paying positions at the BAC. After being shut down for a short period, the court sided with Foodies and the restaurant reopened.

The Sheltons were removed from their positions by the BAC board in August 2014, and the organization announced at the time they were continuing operations without a paid staff.

Carson City also recently ended its $140,000 yearly contract with the BAC for broadcasting city meetings via the public access channel.

Financially, Hill said the organization is very stable, and cited their 40th anniversary members-only party as a recent success. She also noted that their latest membership drive exceeded their goal, giving them a total of 420 paid members.

Hill said there was some risk involved in pursuing the push to remove the restaurant. The BAC had to put up a $25,000 bond in the case, which Hill said they are now in the process of getting back.

Hill estimated that if BAC had lost the case, the damages owed to Foodies would have only amounted to a couple of thousand dollars.

The BAC will have legal fees to pay off as a result of this case, but Hill said they had many supporters in the community who backed the effort.