Raleigh’s business sues Downtown South, saying developers are kicking them out

The small business sued the developers of the planned Downtown South project, claiming it was being removed from the lease early.

GreaseOutlet.com, an LLC owner renting about four acres just inside the Interstate 440 beltline, also leased a lawsuit filed Tuesday that allowed him to stay until 2031. Regardless, he claims to have been kicked out in April.

“All we want to do is run our business,” said Charles “Chip” Haskell, co-owner of Grease Outlet, in an interview with The News & Observer. “That’s it. We want to run the business and let (they) say that our lease is valid.”

Downtown South is proposed as a $ 2 billion sports and entertainment district, with retail stores, homes, hotels and offices all anchored in an outdoor stadium. The developers say it will be the southern gateway to downtown Raleigh.

The proceedings oppose MK South II, which was created to acquire the assets of the project on behalf of Steve Malik, owner of the North Carolina Football Club, and John Kane of Kane Realty Corporation. And the property manager of GreaseOutlet.

“We cannot freely comment on the details of this proceeding, but we continue to focus on ensuring a clean site for the benefit of the community and the environment,” Kane Realty Corp said. Said Bonner Gaylord, Chief Operating Officer of. I said it when I was contacted by The News & Observer on Wednesday.

The company collects restaurant grease

Haskell and co-owner Robert Boyd Andrews chose the location from Walker and Wilmington streets because of its heavy industrialized zoning and ability to obtain permits from the city and state. They can process and process “brown grease” from the restaurant’s dishwasher, use it for composting, and then return the water to the city’s water system.

“I heard about downtown South through the news,” Haskel said. “Frankly, our factory manager said,” Have you ever heard of what’s called South Downtown, which builds a football stadium in downtown Raleigh? “” No, that’s great. More restaurants. ” Uh? I was looking forward to them being built. “

Then they realized that it was likely to be built on top of their current location.

The proceedings alleged that they had spent $ 1.5 million to “secure all applicable environmental permits” needed for the business and sought amendments to the lease to extend the contract until 2031. The amendment was agreed by the previous owner. Raleigh Reclamation, LLC, said the proceedings.

According to the proceedings, due to the amendment of the lease, GreaseOutlet will lease up to 10 years beyond the original 5 year period instead of paying “an additional 3% rent for each year anniversary of the lease during the extension period” Can be extended. ..

According to the proceedings, “In order to make a large investment in real estate equipment and safely comply with all applicable environmental regulations, (GreaseOutlet) will include an option to amend the lease and extend it to 2031. I tried to do it. “

Lease also requires GreaseOutlet to obtain all required government permits and licenses, but according to the proceedings, MK South will not sign a state renewal permit application.

“Instead, around January 24, 2021, MK South will receive a limited two-year (North Carolina Department of Environmental Quality) approval instead of the standard five-year approval, provided that (GreaseOutlet) agrees. I offered to sign it. According to the proceedings, I changed the terms of the lease and it expires in two years. “

The proceedings say the developer knew of the lease extension

According to the proceedings, MK South was notified three times of the modified lease leading up to the purchase of the Grease Outlet rental property. MK South was also notified during the closing.

According to the proceedings, Greast Outlet told MK South in August that it would extend the lease for the first five years of extension and prepay the annual rent of more than $ 41,000 deposited.

According to the proceedings, five months later, “MK South suddenly changed course, considered the lease amendment invalid, and terminated the lease on April 30, 2021, the original expiration date (GreaseOutlet). ) Was notified. ” MK South also refunded the rent payment.

“We spent a lot of time, energy and resources and finished this long before everyone thought of Downtown South,” Haskel said. It wasn’t like we said, “We’re going to build it in downtown south.” That was a couple of years ahead. So it’s not surprising that we are a leasing company. That’s what we believe is a valid lease for 2031. “

Raleigh City Council Approved controversial rezoning request Towards downtown south in December 2020. Buy the last land, Includes $ 38 million in assets occupied by Grease Outlet for the project. Currently, the city is developing a tax increase subsidy policy that may help finance other equipment such as stadiums and affordable housing planned for the project.

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