See You in court
No Ninfa's for Uptown Park? Landlord scuttles deal, lawsuit alleges
During last week’s episode of CultureMap’s “What’s Eric Eating” podcast, Legacy Restaurants CEO Jonathan Horowitz acknowledged that the company is still looking to open additional locations of The Original Ninfa’s on Navigation, including a deal that fell through “in the general vicinity” of the Gow Media office near The Galleria (Gow is the parent company of CultureMap).
Asked specifically about “a recently-closed Tex-Mex restaurant in Uptown Park,” meaning Anejo, the upscale Tex-Mex restaurant that closed in April, Horowitz replied, “There’s probably a story there somewhere which I’m sure somebody’s going to figure out. That’s not the one I think we’re going to get, but we’ll see.”
The story Horowitz alluded to appears to be told in court documents filed by Anejo Uptown Park, LLC in a lawsuit against its former landlords, AmREIT Uptown Park, LP and Edens Limited Partnership. According to the plaintiff’s original petition filed in April, Anejo and Legacy Restaurants had reached a deal to bring Ninfa’s to Uptown Park via a lease assignment.
According to the document, Legacy agreed to pay Anejo $1 million to assume its lease, which would allow the company to open a new restaurant called “The Original Ninfa’s at Uptown Park” in the space previously occupied by Anejo.
That Legacy and Anejo reached a deal shouldn’t come as a surprise. Prior to becoming Legacy’s CEO, Horowitz worked for Anejo’s parent company, Lasco Enterprises, in a variety of roles including marketing director. He maintains a financial interest in that company, which operates restaurants including Max’s Wine Dive and The Tasting Room.
The only problem is that the property’s landlord, AmREIT Uptown Park, LP, which is owned by Edens Limited Partnership, wouldn’t consent to the assignment. Anejo alleges in its document that the landlord told Anejo that it wouldn’t allow Ninfa’s to assume the lease, because it didn’t consider the restaurant to be sufficiently upscale for the ritzy shopping center. After a series of negotiations and a detailed proposal by Ninfa’s that addressed some of those concerns, the landlord agreed to allow the assignment if Ninfa’s met certain conditions, according to the document:
Following the meeting, on March 27th, Landlord sent its final communications to Anejo offering to consent to the assignment as long as (a) the menu Legacy previously proposed to Landlord became an attachment to the assignment document (an implicit concession Landlord now approved of the ‘upscale’ quality and pricing of the menu), (b) Legacy kept the interior design as is or otherwise approved by the Landlord, (c) Legacy used a tradename that does not contain the word ‘Ninfa’s,’ and (d) Legacy provide an 18-month rolling guarantee for the new legal entity.
Ultimately, Anejo asserts that these conditions, including forbidding Ninfa’s to utilize the brand equity of its name, hid AmREIT and Edens' true motivation, which was to sign a new lease at current market rates. Anejo’s lease, which it had assumed from Arturo’s Uptown Italiano in 2015, only charged $46 per square foot with two five-year renewal terms for $50 and $58 per square foot that would have kept the restaurant in the space through 2030. Current rates are much higher: $65 to $80, according to Anejo’s pleading.
Anejo's argument is that, by refusing to consent to the assignment, AmREIT and Edens denied the restaurant the ability to secure the $1 million payment from Ninfa's that it deserved. Instead, the landlord simply allowed Anejo to close so that it could find a new tenant at the much higher current lease rate, which would net the company far more revenue for the same space.
CultureMap has contacted Edens through the representative listed on its website about these allegations and will update this article when it responds.
Ultimately, a judge and jury could eventually end up assessing the merit of Anejo’s allegations. Until then, it's an interesting "what if" in the ongoing saga of Houston restaurants.
