Friday, February 27, 2009

Illinois court rules against tenant exclusive

Crain's moved a story this morning regarding a dispute over a tenant exclusive involving the InterContinental Hotel in Rosemont. As I understand it, Capital Grille occupied a standalone pad in the project under a lease that prohibited another “high-end steakhouse themed restaurant concepts serving liquor with price points above $22.00 per entrĂ©e” in the project. Apparently several types of competing restaurants were named.

Apparently an Italian restaurant was supposed to go into the hotel but then blew out of the deal. Along came Wildfire, which was not listed among the competitors although it does sell steaks above $22.00 per entree and is a pretty classic supper club type atmosphere, though certainly noisier and more lively than Capital Grille, in my opinion. The developer's hand was forced because the franchisor declared a breach under its franchise agreement for not having a restaurant on site (and then granted an extension), although you wonder in this market if you can raise the old impossibility/force majeure defense like everyone else is or make it go away through other means....

I haven't read the exclusive language, but in this case Cook County Circuit Court Judge Rita Novak on Feb. 13 denied the preliminary injunction, in part because she found the provision — which singled out a number of restaurants, but not Wildfire — too vague to be enforced in this case." In short? Wildfire gets to open, unless Capital Grille tries to take this up on appeal.

Lawyer lesson? If you are a tenant, you'd better try as hard as you can to make the exclusive as air-tight as possible, and even then remember that litigation can sometimes be a crapshoot.

Finally, I guess the upside for a meat lover is that you get your choice between two more fine restaurants in Rosemont!


britney said...

It was having club atmosphere oops!!
Apply now Nation wide cash