Return Rent and seized wine: the legal battle behind the closure of Shirokiya
Shirokiya, the department store turned into a food court, may never reopen at the Ala Moana center after its leases were revoked in January and it found itself embroiled in a legal row with the mall over unpaid rent, pledges. unfulfilled investment and blocked wine.
Publicly, Shirokiya has said the closure of the Japanese Village Walk and the adjacent Vintage Cave restaurant is due to the COVID-19 pandemic. The company had previously given a tentative reopening date in April, saying on its website that the shutdown was temporary until it can change its business concept or the pandemic ends.
But court records tell a different story.
Ala Moana Anchor Acquisition LLC, the company that runs Ala Moana and is owned by Chicago-based Brookfield Properties, sued Shirokiya Holdings Inc. in January for $ 8 million in overdue rent. Shirokiya counterattacked Ala Moana for $ 110 million. Shirokiya says she invested $ 50 million to move from her old location across from Macy’s to the Japan Village Walk and is also seeking $ 60 million in lost future profits.
Ala Moana locked Shirokiya out of its Japan Village Walk and Vintage Cave locations at the end of 2020.
The mall is auctioning off office supplies, dining tables, chairs, fine china, chandeliers, and statues of the Greek goddess Demeter that once filled the Vintage Cave Cafe. Ala Moana also deleted Shirokiya from her website.
The decision to terminate Shirokiya’s lease was difficult, writes Ala Moana’s legal team in court documents. But it was necessary because of Shirokiya’s “refusal to communicate in any meaningful way, to make a plan, to return to the premises or even to pay partial rent.”
Shirokiya’s legal team claim that Ala Moana wrongly terminated her lease.
Rika Jones, chief financial officer of Shirokiya Holdings Inc., declined to discuss the company’s future, citing the ongoing lawsuit.
Representatives for Ala Moana did not respond to messages seeking comment. Lawyers for Ala Moana and Shirokiya did not respond to calls on Friday.
Lawyers for Ala Moana and Shirokiya are due in court on Monday to settle the property of more than $ 200,000 in wine at the premises of Vintage Cave.
Unpaid rent during the pandemic
In May 2020, Derek Kobayashi wrote to Shirokiya on behalf of the Ala Moana Center asking him to pay around $ 900,000 in rent before COVID-19 for his three leases, the Japan Village Walk, the Vintage Cave Cafe and the Vintage Cave restaurant. Honolulu.
Ala Moana was willing to “pursue a resolution” that would allow Shirokiya to continue operating and retain its leases as long as the company paid rent by June 12, Kobayashi wrote in a letter submitted as part of the court case.
A day before the rent was due, Shirokiya’s lawyer Shaun Mukai responded, saying business was hampered by the pandemic. He noted that Shirokiya had invested a large sum to move.
“Unfortunately, Shirokiya has not been able to reap the benefits of its large investments,” Mukai wrote.
He said that Shirokiya has no plans to reopen anytime soon, that he has already started exploring other options and that he would appreciate “the opportunity and courtesy of finding a gracious exit with Ala Moana “if he couldn’t reopen at all.
In July, Ala Moana grew impatient. Kobayashi sent another letter informing Shirokiya that the unpaid rent had swelled to over $ 3 million for the three leases. Ala Moana demanded payment in 10 days.
Ten days later, Mukai said the company had considered reopening options but decided it was not feasible given the growing number of COVID-19 cases. Mukai said the company is in the early stages of negotiating with new investors in Japan and has asked Ala Moana to wait until September for updates.
In November, Ala Moana changed the locks on the Vintage Cave and Japan Village Walk and told Shirokiya she was taking control of the place.
In correspondence with the mall, attorneys for Shirokiya denied that the company was in default of its leases and said it was still seeking new financing in Japan and had started talks with at least one limited company. .
Shirokiya promised to present a plan for Ala Moana in December, but no plan came to fruition, according to Kobayashi’s letters.
“The tenant was still unable to provide (Ala Moana) a clear intention as to the premises or as to the amounts due and owed to the landlord,” Kobayashi wrote in a letter in December.
The mall terminated Shirokiya’s lease on January 15 and filed a complaint to recover the unpaid rent on the same day.
Shirokiya claims in court records that he is being treated unfairly.
It opened in Ala Moana in 1959 and moved to its previous location as part of a mall expansion in 1966, the Honolulu Advertiser reported at the time.
For 50 years, Shirokiya operated as a department store, selling jewelry, clothing, kimonos, tableware, and electronics. A food court on the second floor had groceries and bentos.
The company says it took a “leap of faith” in 2016 when it moved from its previous location to become a primary tenant in the mall’s new Ewa wing, near the old Sears downstairs site.
Shirokiya says Japan Village Walk started leaking during heavy rains in 2018 and Ala Moana never made any repairs. The company also says the mall rushed to end its lease earlier this year to make way for a new tenant.
Lawyers for the company wrote that “Ala Moana’s mismanagement and empty promises threatened Shirokiya’s new business model as the main tenant of Japan Village Walk with its stores and food court.”
Ala Moana has denied Shirokiya’s allegations.
In exchanges between the lawyers, Shirokiya maintained that he could not open due to government restrictions during the pandemic.
Lawyers for the mall are arguing in court cases that restaurants could open under Honolulu guidelines.
“Shirokiya could have but did not operate on a delivery basis and did not take over catering services as authorized,” Kobayashi wrote.
Lawyers for the mall also claim that Shirokiya acted in bad faith when she asked for more time to work out a payment plan while exploring new Vintage Cave locations in New York and Tokyo.
Ala Moana’s legal team further argued that if Shirokiya thought she couldn’t reopen, she should have given up her lease.
Now Ala Moana and Shirokiya are arguing over the wine.
When the mall locked Shirokiya out of its restaurants, lawyers for the company raised concerns about the wine stored in the Vintage cellar.
Ala Moana applied to the court in June for permission to take possession of the wine. He wants to sell the wine to recover part of Shirokiya’s rent.
Shirokiya says the wine does not belong to the company but to the members of the Vintage Cave Club.
Club members would deposit $ 5,000 which could be used to pay for food and drink at the Vintage Cave. In return, members would get perks, including the use of lockers to store bottles of wine purchased at the restaurant.
Shirokiya says he should be allowed to keep wine for his members and produced receipts showing renewed liquor licenses from the Honolulu Liquor Commission.
But Ala Moana countered, saying taking the wine is legal because it equates to a privilege.
A judge is invited to settle the dispute at a hearing scheduled for Monday morning.
Kazuyo Souza, a tax preparer in Honolulu, is one of the members of the Vintage Cave Club. She said she couldn’t go into the restaurant to pick up her wine. She is confused as to how Ala Moana can claim it is theirs now.
“It’s our personal property,” Souza said. “It’s not Vintage Cave’s. I don’t know why they don’t let us take our personal things.
Souza said she had several thousand dollars of wine in a locker at the restaurant. She says the other members have a lot more.
Court records show that 130 of the club’s members have a combined total of $ 200,437 in wine stored in the Vintage Cave. The most expensive bottle on the list is a 2010 Screaming Eagle valued at $ 11,000.
“It will be a huge loss for everyone,” Souza said.