Mall owner counterclaim: Hard Rock Cafe used pandemic as excuse to close

This story first ran on BusinessDen.com, a BizWest news partner. 

Hard Rock Cafe can’t always get what it wants, according to its Denver landlord, who is fighting the restaurant chain’s bid to have its 16th Street Mall lease terminated.

In a counterclaim filed last week, Denver Pavilions OwnerCo LLC — the owner of the Denver Pavilions Mall — said the Florida-based restaurant’s struggles predated the coronavirus, and Hard Rock “is using the pandemic as a pretext in a cynical attempt to cut costs company-wide.”

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“Hard Rock STP has used the pandemic as an excuse to shutter its Denver business and threaten DPO with economic harm unless DPO caves to Hard Rock STP’s ridiculous demands that are unsupported by the law,” the landlord said in court filings.

Hard Rock operates in 11,736 square feet at the corner of 16th Street Mall and Glenarm Place, within the mall. It says it has leased the space since 1996. The restaurant has been closed, and hasn’t paid rent, since last March.

In January, Hard Rock sued Denver Pavilions, which is owned by Denver-based Gart Properties and MetLife Real Estate Investors. The chain asked a judge to rule it has the right to terminate its lease this month, when pandemic-related government restrictions on business hit the one-year mark.

In its lawsuit, Hard Rock pointed to a specific provision of its lease that states if its use of more than 20 percent of its premises is “materially impaired by reason of Force Majeure” for more than one year, the tenant “shall be entitled to terminate this lease.”

The mall doesn’t buy that argument, and last week counter-sued the chain for breach of contract.

Denver Pavilions said in court documents that Hard Rock “began demanding lease and payment concessions from DPO as early as November 2019, pre-pandemic.” And it says the chain was also laying off staff and closing restaurants in other cities before the coronavirus was a factor.

The mall acknowledges that its tenants have been challenged by the pandemic. But it notes that other eateries have been reopened since June.

“Like those restaurants, Hard Rock STP could have opened, but it chose not to,” the counterclaim reads. “Instead, Hard Rock STP shuttered its doors and refused to pay the amounts it owes as rent and other charges under the lease.”

The mall notes that the portion of Glenarm Place by Hard Rock has been closed to vehicles for months, and that tables were put out so visitors could eat outside. The restaurant was “uniquely situated” to take advantage of that, it said.

Hard Rock is represented by attorney David Hutchinson of Denver’s Otten, Johnson, Robinson, Neff & Ragonetti. He declined to comment.