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Commercial lease disputes bring restaurant closures in Malibu

Small business is heating up in Malibu, but not necessarily in a good way. In fact, small businesses in the area say the rent they pay on commercial real estate is too high to make a good profit. The result, according to some, is that locally owned establishments are closing down while too many high-end retail shops pick up the slack and drive away local business.

The Point Dume Village in Malibu is a prime example. Up until recently, the Village was home to Savory, a popular restaurant that opened in July 2010. But the executive chef and co-owner of Savory decided to close the restaurant's doors after a lease dispute with the Village landlord, who is also a co-owner.

The chef says the landlord tried to expand the business too quickly by pushing for a full liquor license, installing outdoor heaters, building a patio and raising food prices. As a show of solidarity in support of Malibu small businesses, protesters even converged on the shopping center to express disapproval of what they described as the landlord's bullying tactics.

The falling-out between Savory's co-owners comes after the chef didn't pay the November rent of $15,000.

For his part, the landlord said he invested $600,000 in the restaurant and that the chef wanted more. The landlord said that after two years of business, the restaurant was losing money.

The chef denied the landlord's claim about the $600,000.

Savory isn't the only Village restaurant closing its doors over a lease disagreement. Point Pizza Restaurant will also shut down under similar circumstances. And in nearby Malibu Village, Guido's Italian Restaurant is also closing due to a lease disagreement.

In response to these disputes, local activists and a group called the Preserve Malibu Coalition are pushing for new ordinances to protect small businesses. These kinds of measures may seem like a good idea at first glance, but they also carry the risk of future business litigation. In any case, Malibu business owners would do well to look into their available legal options.

Source: The Malibu Times, "Savory shutters after dispute with landlord," Melissa Caskey, Nov. 14, 2012

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