Yuca and Lincoln Road landlord in heated litigation over lease

Yuca, the longtime restaurant on Lincoln Road, is under threat of eviction, as litigation between the Latin-cuisine establishment and its landlord heads toward a boil, The Real Deal has learned.

After 20 years at 501 Lincoln Road, the restaurant’s lease is up on Thursday, and the landlord is looking to sell the building, amid escalating prices along Miami Beach’s pedestrian promenade.

An eviction trial is set for August, which the landlord’s attorneys, Andy Hall and Adam Lamb, have requested to be expedited, said Lamb, partner in Hall, Lamb and Hall, who represents landlord J. Berens & Sons Development Corp., owned by brothers Israel Berens and Fred Berens.

A separate trial, related to the lease, has not yet been scheduled. But Yuca’s attorney Robert Zarco, founding partner and lead trial lawyer of Zarco Einhorn Salkowski & Brito, said he will request that the eviction trial be postponed until after the trial on the lease.

Lawsuits and countersuits have been brewing for months in Miami Circuit Court. Last week, a judge denied the landlord’s request to dismiss the litigation, paving the way for a jury trial on the lease claims.

Yuca Restaurant Corp. alleges, in its lawsuit against the landlord that began last year, that Suarez had a verbal agreement to extend the restaurant’s lease for another five years under existing terms. The lease, which originated in 1995 for five years, with five-year extensions, allowed for a 5 percent increase each year. Yuca, owned by Janet Suarez, further says in its suit that it spent $500,000 in renovations, which it undertook because the landlord allegedly agreed to extend its lease for five more years.

“It would be commercially unreasonable and logically impractical and defies common sense for a tenant to invest $500,000 in a property when the return on investment would not possibly be able to be received, unless you were able to obtain a lease extension,” Zarco told TRD. The landlord was well aware of the financial investment that was being made in exchagne for the lease extention, he said.

Lamb said that last year, the landlord entertained three offers to sell the building: to Miami Beach-based Terranova Corp., David Edelstein’s New York-based TriStar Capital and New York-based Thor Equities — all of which own substantial holdings on Lincoln Road.

A clause in Yuca’s lease gives it the “right of first opportunity,” which allows that if the landlord ever decides to sell the building, it would have to tell Yuca, which would then have 20 days to reach an agreement with the landlord before it could execute agreement with someone else, Lamb said.

“The lawsuit was initiated by the tenant in order to enforce the written lease as to the right of first notice and opportunity to negotiate, as well as the lease extension agreement,” Zarco told TRD. “In order to counter our allegations, the landlord chose to file a notice of eviction, based on a fabricated default under the lease. The basis for the eviction was that the tenant failed to provide tax returns and financial statements for the last 10 years. However, during such time never was there one notice of default sent to the tenant due to the fact that there were no financial statements or tax returns.”

While Yuca, which also offers salsa dancing classes on its second floor, contends in its lawsuit that it reached a verbal agreement to renew its lease under existing terms, Lamb said market rents are now three times the lease’s previous terms, and no such oral agreement was ever reached.

Adding spice to the mix as unveiled in legal documents: an IRS levy against Yuca’s original owner, Amancio Suarez, for $392,220 for unpaid payroll taxes and Yuca’s settlement with Ocean Bank in October 2013 to pay $150,000 of a $500,000 debt.

“There is not a single document from 2011, 2012 or 2013, not a single email, no documented evidence whatsoever that even refers to a lease extension,” Lamb told TRD. “They just made it up. Their whole case is ‘I have this oral lease extension based on two casual conversations when [my client] was in the restaurant.'”

Counters Zarco: “The eviction and notice of default were a fabricated attempt by the landlord to find an excuse to accomplish wrongfully what it could not due legally.”

In an eviction case, as a “holdover tenant” with an expired lease, Lamb said the landlord is legally entitled to double the monthly rent. Furthermore, after the litigation began, Lamb said “Yuca tried to hold up our sale and insert themselves into a deal,” because he said the restaurant made a separate arrangement with Tri-Star to pay Yuca about $2 million fee if it buys the building. In exchange, Yuca would drop its suit and vacate the property, Zarco said.

“In our mind, the lease is up, there is no oral extension, and it’s time for them to leave, and they are just a holdover tenant,” Lamb said. “We’re looking to evict them as soon as possible, as soon as the lease is up.”