Woodbury, restaurateur sue each other over sports center plans

The city of Woodbury and a Stillwater restaurateur, who agreed to work together to build a full-service restaurant in the newly revamped Bielenberg Sports Center, are suing each other after their partnership dissolved in discord.

The main point of disagreement, according to court documents filed in Washington County District Court, is over plans by Gartner Restaurant Holdings (GRH) and owner Greg Gartner to expand the restaurant that was to be part of the expansion and renovation at the sports center — more than doubling the agreed-upon restaurant costs to the city when it signed a lease agreement last August.

Under the seven-year lease, the city agreed to contribute a maximum of $500,000 toward the cost of the restaurant on the sports center's second floor, along with a smaller first-floor concession area. The city's costs were to include more permanent fixtures like a fireplace, freezer, cabinetry and plumbing and heating.

GRH was to fund smaller capital improvements like seating, decor, grills and fryers, estimated to cost $300,000.

The city was to take a share of the restaurant's profits, based on revenues: 12 percent of gross revenues up to $1 million; 10 percent beyond that.

The concession area will be built as planned, and the city plans to explore other options for food service in the second-floor space.

According to the city's suit, GRH steadily added improvements to the plan after the lease was signed, with the new tally of costs presented to city of $1.3 million.

The added costs cover plans to more than double the restaurant's seating capacity from 106 to 235 seats, expanding the fireplace from a $2,500 unit to one costing $66,000, and to increase the overall size from 1,789 square feet to 2,877 square feet.

The city balked, and is suing GRH and Gartner for breach of contract for not complying with the lease, with the aim of recovering damages of at least $100,000.

In its suit against Woodbury, GRH and Gartner also accuse the city of breach of contract, saying Woodbury did not live up to the lease terms, and seek damages to recover their costs.

The city, GRH and Gartner argue, was on board with its plans for the restaurant, but ran into major cost overruns on the overall Bielenberg project, driving the total cost from $17 million to $22 million. Because of that, they contend, the city diverted money it would have spent on the restaurant to unrelated costs of construction and the work was not completed on time, keeping GRH from proceeding.

Because the city didn't complete its share of the promised work, GRH and Gartner were unable to begin their construction work, they argue.

Jim Anderson • 651-925-5039