Hooters, HPU sue each other over Aloha Tower Marketplace issues

Aloha Tower Marketplace

Two lawsuits have been filed over Hawaii Pacific University’s recent move into Aloha Tower Marketplace.

First, HPU (under Hawaii Lifestyle Retail Properties LLC) announced a lawsuit against Hooters (under Hoowaii) for not paying its portion of the rent. The university also says Hooters agreed to fix its faulty exhaust system, but never did.

According to the complaint:

As of July 22, 2015, Hoowaii is in default of the Lease for failing to pay Rent and other charges totaling Thirty-One Thousand Four Hundred One and 25/100 Dollars ($31,401.25). (This total is based on a fifty percent (50%) abatement in minimum rent starting April 2014. Hoowaii did not formerly accept the terms HLRP proposed for the 50% rent abatement, however, HLRP has accounted for this abatement for purposes of this Complaint. The 50% rent abatement will end when the renovation of the Aloha Tower Marketplace is substantially complete.) …

Hoowaii thereafter acknowledged its obligation under Section 14.01 and therefore, by letter agreement dated September 24, 2014, agreed to repair and replace its exhaust system, including but not limited to the exhaust duct, exhaust fan and associated equipment. Hoowaii further agreed that the design and installation of the new vent system would comply with all applicable codes and county and state laws, and that the design of the new exhaust system would be submitted to HLRP for review and approval before equipment was ordered. …

Hoowaii, however, failed to repair/replace its exhaust system by June 1, 2015, despite having more than eight (8) months to complete the work.

Then, Hooters announced its filing a lawsuit against HPU for breach of contract. Hooters said the contract stated that HPU’s recent construction at Aloha Tower Marketplace wouldn’t affect businesses, but it did.

According to the cross-complaint:

As of August 7, 2015 Defendant continued to materially adversely affect the access to Plaintiff’s Premises from the common area without Plaintiff’s consent, restricted parking for Plaintiff’s customers and employees, and hindered Plaintiff’s ability to peaceably and quietly enjoy the Premises during construction of dormitory spaces above Plaintiff’s Premises which includes the presence of dust, debris, and noise. …

Defendant is constructively evicting Plaintiff by substantially changing the character and use of the Marketplace, as well as adversely interfering with Plaintiff’s business being conducted on the premises with respect to access, construction disturbance, parking and by creating hazards affecting patrons and employees of Plaintiff. …

Plaintiff has suffered, and continues to suffer, damages as a result of Defendant’s acts and omissions, including substantial loss of income and other revenue and the inability to pay certain expenses, including loan payments to its lenders; the amount of such damages will be established at trial.

HPU recently renovated the marketplace to install an education center and dorm rooms.

Janet Kloenhamer, HPU executive vice president for administration and general counsel, says HLRP’s lawsuit is the culmination of a long history of notices to and discussions with Hooters regarding payment and maintenance.

Read Kloenhamer’s full statement below:

“Hoowaii’s complaint was preceded by a complaint filed by Hawaii Lifestyle Retail Properties (HLRP), an entity through which Hawaii Pacific University manages the Aloha Tower Marketplace, against Hoowaii in Honolulu District Court on July 23, 2015.

“HLRP’s complaint against Hoowaii was the culmination of a long history of notices to and discussions with Hoowaii concerning payment for and maintenance of the Hooters restaurant at the Aloha Tower Marketplace. We stand by the facts contained in our complaint and the evidence establishing Hoowaii’s actions and obligations. These are long-standing issues, as to both timely and accurate lease and related payments as well as maintenance of their equipment in working order. Nevertheless, with residents moving into the Waterfront Lofts in less than two weeks and thousands of additional students, faculty, alumni, staff and community members who will soon be on the premises every day, it became imperative from a safety standpoint that we take formal action to ensure that HLRP is meeting its responsibilities to all tenants and customers of the Aloha Tower Marketplace.

HLRP and HPU have continued to try to work collaboratively with Hooters over the course of the necessary and beneficial $50 million dollar renovation of Aloha Tower Marketplace. In addition to offering a rent abatement during construction, signage welcoming patrons and directing customers to Hooters’ location was provided, while access along Pier 8 remained unimpeded. By the time HLRP acquired the Aloha Tower Marketplace, the development was nearly seventy percent vacant and attracted minimal foot traffic. The renovation itself placed several hundred construction workers on-site five-to-seven days a week.

“HLRP has continued to fulfill its responsibilities to all tenants and customers of Aloha Tower Marketplace while taking necessary action to provide a safe and secure premises as it has transformed and revitalized the facilities. Resorting to litigation to resolve disputes is a last resort used only when necessary to preserve our rights as a landlord.

“HPU takes very seriously our duty to preserve our educational mission and protect the comfort and safety of our students and guests. We remain hopeful that Hoowaii will work with us to arrive at a businesslike solution to these matters. Otherwise we look forward to presenting the full facts and obtaining a favorable outcome in court.”

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