Westfield sours on Sugar Factory over back rent in Century City

Unibail-Rodamco-Westfield is turning sour on one of its tenants at its flagship mall in Century City.

The landlord has sued Sugar Factory, claiming the celebrity-frequented novelty restaurant owes more than $1.6 million in back rent that accrued from 2018 through March 2020, according to a complaint filed in Los Angeles Superior Court last week. Unibail-Rodamco declined to comment on the litigation.

Westfield Century City alleges the restaurant has failed to pay rent since October 2018, when it first signed a lease for 14,080 square feet of space at the mall. The property, which became part of Paris-based Unibail-Rodamco-Westfield after its acquisition of Westfield in 2018, is a 1.3 million-square-foot outdoor mall on Santa Monica Boulevard and Avenue of the Stars.

Under its original 15-year lease, Sugar Factory agreed to an initial annual rent of $800,000 per year, which would be increased to $1.01 million in 2024 and $1.39 million in 2032.

The restaurant chain is owned by real estate developer and film producer Elie Samaha and Charissa Davidovici. It opened its first location in Las Vegas in 2009, and has since added spots in New York’s Meatpacking District along with Chicago, Miami, Atlanta and Bahrain.

The menu boasts a $99 sundae with 24 scoops of ice cream, along with $39 cocktails in goblets boasting neon colors and sour gummy worms. The Sugar Factory website touts Kylie Jenner, Mariah Carey and Nicki Minaj as customers.

Sugar Factory did not respond to a request for comment.

According to Westfield’s complaint, Sugar Factory failed to pay rent from October 2018 through October 2019, racking up $1.15 million in outstanding rent before failing to actually open its restaurant by a December 2019 deadline. The chain got the Century City location open in March 2020, just before pandemic-related closures were put in place.

In September 2020, Westfield filed an initial lawsuit against Sugar Factory, seeking $1.58 million in unpaid rent.

Two months later, the two firms settled the matter, with Westfield agreeing to a schedule that allowed Sugar Factory to pay 36 monthly installments of $45,753 from July 2021 through 2024. Its unpaid rent had ballooned to $1.65 million by then.

Westfield is now alleging that the Sugar Factory made its first installment late and failed to make scheduled payments in August and September, according to the complaint.

The mall owner is also alleging Sugar Factory owes more in back rent for months after the start of the pandemic.

“Westfield will amend this complaint at the appropriate time,” the firm said in its complaint.

Unibail-Rodamco-Westfield has gone after a number of its tenants seeking unpaid rent during the pandemic, though none date back to before the onset of the pandemic. Last year, the firm sued fashion retailer Express over $30 million in missed rent. It recently sued the Victoria’s Secret store in the World Trade Center in New York, seeking $32 million in unpaid rent.

The firm is also planning a “radical reduction” of its regional malls in the U.S., but will focus on its flagship locations.