Lawsuit claims poured concrete floor caused Cheeburger Cheeburger's collapse
June 2nd, 2017in Business Around the Region
The 141-year-old brick building in downtown Chattanooga that housed the Cheeburger Cheeburger restaurant collapsed March 29 because the building's owner had let a concrete floor be poured upstairs in the Vaudeville Cafe, a separate business that closed in 2015, according to a lawsuit filed by the restaurant in response to an earlier claim against the business.
The countersuit claims the building owner's son also unlawfully took Cheeburger Cheeburger's restaurant equipment after the partially-collapsed building at 138 Market St. was condemned and off limits.
But Walls' $1 million lawsuit against Cheeburger Cheeburger filed earlier in March claims the brick wall's collapse was the restaurant's fault, citing a 1997 lease that says — in "plain language" and "no uncertain terms" — that maintaining the exterior walls was the tenant's responsibility.
So, although the old, brick building has been demolished and hauled away — and previous tenant Chattanooga Ghost Tours has found a new home — the dust-up over who's to blame hasn't been settled.
Walls' lawsuit and Cheeburger Cheeburger's counter lawsuit haven't yet had a hearing before Circuit Court Judge L. Marie Williams.
Cheeburger Cheeburger to return?
Charlie Eich, who co-owns the local Cheeburger Cheeburger franchise with his wife Renee Eich — along with another Cheeburger Cheeburger in Huntsville, Ala., — isn't sure if they'll reopen the restaurant downtown.
"We appreciate the outpouring of support from the community, and at this time we are evaluating our options," he said.
Chattanooga Ghost Tours finds new location after building collapse
The Eichs might open a restaurant other than Cheeburger Cheebuger, Eich said. They live in Hixson and might open a restaurant there, he said.
What will happen to the property at 138 Market St., which has a prime location in the heart of downtown?
Efforts to reach the owner, George W. Walls Jr., through his son, Kenneth Walls, who managed the property, were unsuccessful.
Owner wants 'ground lease'
Going forward, Walls doesn't plan to sell the property; instead, he wants to use a "ground lease," said Bailey Bullard with SquareOne Real Estate, a Chattanooga boutique real estate firm.
Under a ground lease, Walls would continue to own the land. A developer would lease the property and construct a building there. Then Walls would get to keep the building, once the lease was up.
"A ground lease doesn't surprise me," said David DeVaney, president of NAI Charter Real Estate Corp., a commercial real estate broker. "Ground leases are common when you have a highly desirable location."
"A Starbucks or a McDonald's — you tend to see those on ground leases," DeVaney said. But ground leases aren't used exclusively by corporate chains, he said. A local restaurateur or other business could agree to a ground lease.
Bullard didn't know how much Walls wants for the ground lease.
Walls paid $50,000 for the property in 1972, according to Hamilton County Assessor of Property records. That was two decades before the Tennessee Aquarium opened on the other side of Market Street and helped spark downtown's renaissance.
The city of Chattanooga spent about $175,000 on temporary fencing around the crumbled building and to pay a contractor to tear it down and haul away the debris, said Deputy City Attorney Phil Noblett.
The city hasn't yet been repaid, Noblett said Tuesday. But the city put a lien against the property to ensure it will recoup the expense.
Contact staff writer Tim Omarzu at email@example.com or www.facebook.com/MeetsForBusiness or on Twitter @meetforbusiness or 423-757-6651.