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Notice posted on restaurant’s door says it has failed to pay more than $226,000 in rent among other sublease breaches

Posted: July 14, 2017

Jul 07, 2017 by Natalie Paddon  Hamilton Spectator

The Waterfront Trust has terminated Sarcoa’s sublease. – John Rennison,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 will be meeting next week to discuss options.

https://www.thespec.com/news-story/7410667-notice-posted-on-restaurant-s-door-says-it-has-failed-to-pay-more-than-226-000-in-rent-among-other-sublease-breaches/