West Broad Village owners suing shuttered restaurant chain for $1.6M

ShopCore is suing Kona Grill for $1.7 million after failing to pay rent for three months and defaulting on lease agreement to pay rent on its Short Pump location through Jan. 31, 2024. (J. Elias O’Neal)

A bankrupt Arizona-based restaurant brand has been hit with a lawsuit from its landlord in Henrico a month after abruptly closing its lone local location in Short Pump.

An entity tied to San Diego-based ShopCore Properties, the owners of the retail portion of West Broad Village, this month sued Kona Grill for $1.6 million for skipping out on the lease for its restaurant at 11221 W. Broad St.

Kona closed the restaurant in mid-April, 10 years into a lease that runs through 2024.

Kona Grill was one of the restaurants operating in West Broad Village until it closed in mid-April. (BizSense file photo)

In addition to the $1.6 million – the amount Kona Grill owes for the duration of its lease – ShopCore is seeking nearly $76,500 in delinquent rent payments the firm said it’s owed for February, March and April, according to court documents filed in Henrico County Circuit Court.

It’s also requesting that Kona Grill fully vacate the premises and remove its property from the building immediately. The lawsuit states that ShopCore plans to lease the location to a new tenant, though that new tenant was not identified.

An upscale restaurant chain that served a variety of American cuisines, sushi and cocktails, Kona opened in West Broad Village in 2009 in an 8,500-square-foot, standalone building near the development’s primary entrance.

The restaurant’s closure was part of Kona’s corporate Chapter 11 bankruptcy, which was filed April 30 and resulted in the closing of some of its U.S. locations. U.S. Chapter 11 typically allows businesses to reorganize their debts and pay creditors over time.

For 2019, Kona Grill was paying ShopCore about $24,700 a month in rent, according to a transaction ledger submitted to the court. That’s up slightly from the $22,500 a month it was paying in 2018.

The ledger, which includes payments to ShopCore starting October 2012, shows Kona was current on its rent payments through January.

However, starting in February, Kona Grill stopped paying rent to ShopCore, according to court documents, racking up nearly $76,500 in delinquent rent and penalties.

ShopCore sent Kona Grill a default letter April 19, according to court documents, about two days before the restaurant posted a sign on its door announcing its closing.

Kona Grill remains delinquent on its rent payments, the court documents disclosed.

Kona Grill did not return a call for comment. The company also had not submitted a response to ShopCore’s lawsuit claims as of last week, according to court filings.

Melissa Foster Bird, an attorney with West Virginia-based Nelson Mullins Riley & Scarborough representing ShopCore, also did not return a call for comment.

The Kona building is one of two vacant outparcels along West Broad Village’s Broad Street frontage. Carolina Ale House vacated its location last fall a few doors down at 11275 W. Broad St. after about two years in business.

Chuy’s, Bonefish Grill and Carrabba’s Italian Grill continue to operate standalone outparcel locations at West Broad Village.

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9 Comments on "West Broad Village owners suing shuttered restaurant chain for $1.6M"

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Ashley Smith

$24,700 in monthly rent?!? 😲

Bruce Milam

that’s not out of reason for space such as this in this location.

Jeff Howard

You don’t want to know what some of the other places are paying at West Broad Marketplace etc… lol

Ed Christina

Now it makes sense why there are two vacant spots over there.

charles Frankenhoff

The rents out there actually make Scott’s Addition look cheap.

Brian Glass

If the Lease wasn’t notarized the Landlord will be out of luck ! In Virginia any lease over five years needs to be notarized or the Tenant can walk!

Regarding the rent if Ashley is correct, it’s still high for Short Pump. Did it include amortizing Tenant Improvements? What about pass thru charges for real estate taxes, common area maintenance and insurance. Was that part of the $24,700/month? Since it was a free standing building , in all probability, they were 100% the Tenant’s responsibility.

John worth Steele

Brian – In response to the Supreme Courts decision in the Game Stop case the Va legislature changed the law on “sealed” documents in the past session which I believe is what you are referring to. That requirement is no longer applicable to Virginia leases, whether previously signed or hereafter signed. See Amendment to Va Code Section 55-2

Craig Thompson

No wonder food prices are so high. Rediculous rent $.
I don’t care if that is the going rate.