Resort’s food and beverage company is sued
A lawsuit filed last week in El Dorado County Superior Court by the food and beverage company at Embassy Suites Resort seeks more than $1 million in damages from the owners of the hotel.
Turzak, Inc., which operates Turtles and Zachary’s inside the Stateline resort, claims Koar-Tahoe Partners, L.P. violated the lease contract in a way that made it impossible for the company to run its once-lucrative wedding business.
“These people (Turzak) are all locals who have been here in excess of 10 years. They are loyal, award-winning tenants,” said George Echan, Turzak’s attorney. “All of us are at a loss for why (the owners) are running roughshod over a tenant who generates hundreds of thousands of dollars in rent each year.”
The damages are based on Turzak’s loss of wedding business as a result of the alleged breach. The amount is expected to be in excess of $1 million, but depending on the outcome of the case, could be “well in excess of $2 to $3 million,” Echan said.
“If in fact the business is not salvageable, we would obviously seek income for the course of the lease,” he said. “If the right to extend the lease five years is exercised, there’s a better part of nine years left.”
Martin Flannes, attorney for Koar-Tahoe Partners, would not comment on the specific allegations made in the claim, but did confirm that the two parties have been at odds for some time.
“There are a number of ongoing disagreements between the restaurant and the owners that I would call lease interpretations – they interpret the lease differently,” he said. “I think my clients remain interested in reaching a mutually acceptable resolution.”
The defendant has until May 15 to file a formal response.
Turzak’s complaint stems from a change the owners made regarding use of the conference and meeting rooms inside the hotel, Echan said.
In order for Turzak to book the wedding chapel nine months in advance and the meeting rooms – used for receptions -60 days in advance, the company was required to reserve a certain number of suites in the hotel.
Echan said this requirement effectively prevented Turzak from successfully booking wedding parties.
“The wedding business is an advance-notice kind of business. In order to practically operate, you have to be able to do two things – book in advance the location of the wedding ceremony and the location of the wedding reception,” he said. “The owners weren’t prepared to allow long-range booking. The only way the tenant was allow to do it was if they complied with this unrealistic room reservation policy.”
Flannes said when the dispute was discussed before the lawsuit was filed, his clients felt they had not breached the lease.
“The owners have merely exercised their rights to establish policies for the hotel,” Flannes said. “They have not prohibited the wedding business. Weddings continue to take place and to our knowledge have not stopped at any time.”
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