High Sierra Grill Files Claim for Damages Against Santa Barbara

High Sierra Grill Files Claim for Damages Against Santa Barbara title=
High Sierra Grill Files Claim for Damages Against Santa Barbara
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By edhat staff

High Sierra Grill, now Flightline Restaurant, has filed a claim of damages against the City of Santa Barbara.

The claim, filed on November 25, alleges the City constituted numerous contractual breaches resulting in substantial financial losses. 

High Sierra Grill, located at 521 Firestone Road on Santa Barbara Municipal Airport property, opened in 2015 and closed its doors this past August. The bar and restaurant attempted to transfer its lease to Flightline Bar & Restaurant when the city denied the transfer. 

 

High Sierra Grill states it had a 10-year lease with the City, with options to renew for three additional five-year terms. The claim states that under California law, the restaurant was allowed to assign its lease to a third party for the remainder of the lease term. The restaurant owners allegedly requested the City approve an assignment of its lease to the restaurant's manager, Warren Butler, and his company Flightline Restaurant. Butler intended to take over the restaurant lease, purchase High Sierra Grill's assets and revamp the property into an airport-themed restaurant, according to the claim.

In August, the Santa Barbara Airport (SBA) released a statement explaining the denial of the lease transfer. SBA asserted the City had provided rent relief to keep High Sierra Grill open. After reviewing the transfer proposal, the City had legitimate business concerns regarding Flightline's ability to assume the lease obligations and operate a high-quality restaurant and bar for the entire remaining term of the lease. 

“We had concerns about the proposal, and we provided both High Sierra Grill and Flightline ample opportunity to work with us. But in the end, they were unable to address those concerns,” said Airport Director Henry Thompson in the written statement.

The claim alleges that the City intentionally dragged its feet on approving the lease assignment to Flightline because it wanted to move forward with alternative plans for the restaurant site.

"It could only repurpose the property if High Sierra Grill shut its doors," says A. Barry Cappello, managing partner with Cappello & Noël LLP who represents High Sierra Grill as well as Flightline, which also filed a claim for damages against the City.

Cappello stated the City’s conduct was commercially unreasonable, a breach of contract and the covenant of good faith, and is claiming they are liable for several million dollars in damages to both parties.

An SBA representative stated the restaurant removed kitchen equipment and has not paid rent since July. The City demanded the business pay the rent owed to the City, upwards of $70,000, or release the restaurant so they can work with another business, reports KEYT.

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millimesa Dec 08, 2019 07:29 AM
High Sierra Grill Files Claim for Damages Against Santa Barbara

If you follow the whole story the City is opposed to the underlying business transfer because butler borrowed a substantial amount of money from ACI Jet, a fixed base plane operator, that currently operates in neighboring airports but not at SBA. The city doesn't want ACI to be a leaseholder or essentially a lienholder for a flopping business because they believe it will provide a competitive advantage when bidding opens in 2021 for new fixed base plane operators because they will already have access to the leased building.

a-1575825596 Dec 08, 2019 09:19 AM
High Sierra Grill Files Claim for Damages Against Santa Barbara

Millimesa, I had heard that explanation from City sources several times. But the thing that doesn't make sense about the City's position vis-a-vis ACI Jet is that ACI Jet is already leasing office space directly from the airport in one of the new buildings on Hollister. And another peculiar point on this is that ACI Jet has had an office in the Montecito Upper Village for years even though the airport staff refers to them as a SLO entity.

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