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Rock Bottom Brewery tries to hang onto downtown lease

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Landlord John Goodman wants Rock Bottom Brewery out of its West Washington Street location in downtown Indianapolis by next June.

Goodman recently rejected the restaurant's attempt to renew its lease for five more years. Rock Bottom, part of a Colorado-based chain, has occupied 14,600 square feet at 10 W. Washington St. since June 1, 1996.

The renewal notice was invalid, he said in an Oct. 8 Marion Superior Court filing, because it didn’t come from the proper entity, which is the named tenant Walnut Brewery Inc., and wasn’t delivered by the U.S. Postal Service.

“It is unusual,” said Jon Buerge, director of development and property management for Rock Bottom Restaurants Inc. in Louisville, Colo. “I think this is more he wants the space back for whatever reason.”

Buerge insists that Rock Bottom’s notice was adequate because it arrived via overnight delivery from UPS and required a signature. Similar cases in other states have been resolved in the tenant’s favor, he said. Rock Bottom filed a notice on Tuesday to have the case moved to U.S. District Court of Southern Indiana.

It’s easy to see why Rock Bottom wants to hang onto the lease. The restaurant started out paying a base rate of $16.55 per square foot, plus 4 percent of gross sales, according to the lease document that accompanied Goodman’s complaint.

Rent escalated every three or four years until it reached the current rate of $20.55 per square foot. Under the first of two five-year renewal options, Rock Bottom would pay $22.60 per square foot.

“It’s probably a little below what the market is for downtown right now,” said Steve Delaney at Sitehawk Retail Real Estate. Rents for prime locations start at $25 per square foot and go up, depending various factors, he said.

Goodman’s attorney, Gregory Zubek, said he couldn’t comment on pending litigation.

In the petition for declaratory judgment, Goodman said he needed to quickly resolve the dispute with Rock Bottom so he would have time to find a suitable tenant for the space, which is adjacent to state Health Department offices. A compatible tenant would not “leak water, grease and other fluids into the ISDH space or otherwise introduce or produce noisome odors … as has happened from time to time in the past," the filing said.

Buerge said he doesn't know of any source of tension between the restaurant and landlord. “We’ve never had any sort of bad blood with Goodman. He’s been easy enough to work with.”

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  • Sounds fishy
    Sounds like he already has a new tenant lined up for the space...one that is willing to pay more for the space, but he signed RB up with a first right of refusal lease (that he is trying to get out of). Out of anyone downtown RB is constantly busy. I don't believe this leaky this or that business...
  • Pro business?
    Rock Bottom has been in that location since Circle Center was practically still a large hole in the ground. A lot of business did not survive waiting for the Mall to open. Is this how we treat a tenant that weathered the downtown resurgence from nearly the beginning?
  • Huh?
    Why would Rock Bottom's attorney want the case in federal court? Goodman's chance of winning on a bogus contractual technicality is much higher in the Southern District of Indiana than in a state court.
  • Frivolous Litigation
    So the landlord is trying to get out of the lease because the renewal was delivered by UPS instead of the Post Office. And it had the wrong entity's name on the renewal. (Very typical in the corporate world that you are owned in one name and do business in another name.) I hope that judge socks the Landlord for such a frivolous lawsuit. I know Zubek. He's a good guy. But he should be filing such a frivolous lawsuit.
  • Wouldn't want to be Mr. Zubek
    I think everyone, including Goodman's attorney, knows how this is going to unfold. Most judges would not be amused at the argument mentioned here, as it sounds like the notice was reasonably good. This might just be an attempt to renegotiate the lease terms with the tenant.
  • moron alert
    Seriously, it seems there are enough vacancies downtown that Rock Bottom can do better. What does this moron think this is Manhattan? Leave him high and dry Rock Bottom. I'll limit my future jewelry purchases to the universe of retailers that don't include this clown. Hate to end up with a cubic zirconium.

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