A lawsuit against a celebrated chef has added a new wrinkle to the troubled renovation of the old Ridpath Hotel tower in downtown Spokane.
The owners of the Ridpath are suing restaurateurs Jeremy and Kate Hansen, alleging the couple failed to pay rent and misspent more than $100,000 that should have been used to improve a restaurant space on the ground floor of the iconic building.
The Hansens, meanwhile, say construction setbacks forced them to abandon the restaurant venture and they hope to return some money to the Ridpath owners.
Jeremy Hansen, a chef who was nominated for a prestigious James Beard Award in 2015, and his wife, Kate, have run several popular eateries in Spokane, including Santé Restaurant & Charcuterie, which opened to much fanfare in 2008 in the downtown Liberty Building.
Last summer, they moved to Philadelphia, where Jeremy Hansen took a job as head chef of two restaurant kitchens. In December, they sold the last of their Spokane businesses – Inland Pacific Kitchen and Hogwash Whiskey Den, both in the Washington Cracker Co. Building.
Before leaving town, the Hansens had been expected to open another restaurant in the ground-level commercial space of the historic Ridpath building, which has undergone a yearslong renovation to become the Ridpath Club Apartments.
The Ridpath Brasserie was supposed to be a classic French restaurant serving breakfast, lunch and dinner, accompanied by a bar specializing in gin cocktails. The opening date was a moving target for nearly two years, as construction setbacks delayed the entire Ridpath project.
As of March 2018, the walls of the restaurant space had been painted, and French-style wicker chairs and kitchen equipment had been ordered. But carpet in the entryway needed to be replaced, and there had been problems with the plumbing, the sprinkler system and the smoke hood in the kitchen. In December 2018, Jeremy Hansen told The Spokesman-Review he was walking away from the venture.
“We were excited about the project and are equally disappointed that it didn’t work out,” Kate Hansen said in an email recently. “As with many build-outs, but especially one that requires such a restorative effort, we experienced significant delays that pushed us further away from the opening timeline. As time went on, it became clear to us that what actually unfolded was different from the initial vision for the building and we decided to part ways.”
According to a lawsuit filed last month in Spokane County Superior Court, the Hansens signed a six-year lease with Ridpath Owners LLC in April 2017, agreeing to pay $6,716 per month after a six-month startup phase. Developers Paul Mann, Mark Mackin and Lawrence Brown Jr. are listed as directors of the company.
In addition to rent, the Hansens were expected to pay property taxes, insurance and utilities for the restaurant space. In March 2018, the parties agreed to amend the contact so the Hansens would not begin owing rent until June of that year, according to the lawsuit.
The suit alleges they never paid rent before or after the contract was changed.
The Ridpath owners also offered the Hansens up to $150,000 to “build out” the restaurant space and get it ready for business, according to the lawsuit.
The suit alleges the Hansens “used only part of the $150,000 toward improvements on the restaurant and used the rest of it on operations, salaries for themselves and non-improvement items.” The company “paid out at least $117,388 that it believes was likely not spent on improvements.”
In an email, Kate Hansen said, “The funds were used for renovations and for getting the restaurant open. The remainder is in an account that we would like to give back.”
She said they did not pay rent, because “there were building construction delays that prevented the restaurant from opening with the timeline that we all hoped for.”
“It is unfortunate that things have come to this point but we are hopeful that we’ll be able to find a resolution that will satisfy all parties,” Kate Hansen wrote. Commenting on the scope of the Ridpath project, she said, “This process truly is a legendary undertaking and we wish them all the best.”
Construction delays were not the only problems affecting the renovation.
Developer Ron Wells, who spearheaded the project, was sidelined by investors after he was indicted in December 2018 on 17 counts related to a complex insurance-fraud scheme that involved staged car accidents and money laundering.
In federal court Wednesday, Wells, who has suffered serious health problems, was sentenced to a year of house arrest. He also owes nearly $240,000 in fines and restitution.
Mann, one of the developers now leading the Ridpath project, told KXLY this week about 180 of the building’s 206 apartments have been rented. It’s unclear what will become of the vacant restaurant space.
The lawsuit says the Ridpath owners have hired a real estate agent for the space, but the company “has been unsuccessful at finding a qualified lease, in large part because Ridpath no longer has money to offer for improvements.”
“We are still looking for the right tenant for the space,” Mann said in an email Thursday.
This is not the first time the Hansens have faced a lawsuit related to one of their restaurant ventures.
In 2008, when they opened Santé in the space previously occupied by the Liberty Cafe, the owner of the cafe accused the Hansens of breaching an oral contract to purchase the cafe business for $50,000.
“We replied to a Craigslist ad that the previous tenant listed and we expressed interest in the space,” Kate Hansen said in an email. “We then found out that she was being evicted and we needed to go through the landlord to lease the space, which is what we did.”
Hansen said the incident was a misunderstanding, and the case was settled for “a small amount.” Court records indicate the cafe owner was behind on the rent at the time.
In 2011, developer Jerry Dicker’s company, GVD Commercial Properties Inc., sued the Hansens over their early involvement in the Sapphire Lounge, a bar and restaurant attached to the Hotel Ruby at First Avenue and Lincoln Street.
According to the lawsuit, GVD had paid for $20,000 worth of kitchen equipment so Jeremy Hansen could launch the Sapphire Lounge as a “molecular gastronomy concept.”
The lawsuit alleged Hansen had inappropriately used that equipment, as well as GVD funds, at his other restaurant, Santé. And it alleged he had refused to return some of that equipment when the relationship between the parties “deteriorated.”
“Some of the items are also unusable for the Sapphire Lounge because the molecular gastronomy concept is not viable,” the lawsuit said.
In an email, Kate Hansen said the dispute arose because “we did research and development on the equipment and menu items at our other restaurant, and when we parted ways they wanted the items back.”
GVD withdrew its lawsuits just 10 days after filing it.
“We worked out a deal to give most of the items back and purchase the rest of the items,” Kate Hansen said. “We consider Jerry Dicker and his team good friends and have no hard feelings.”
Likewise, Dicker said in an email, “All issues were resolved amicably.”
Local journalism is essential.
Give directly to The Spokesman-Review's Northwest Passages community forums series -- which helps to offset the costs of several reporter and editor positions at the newspaper -- by using the easy options below. Gifts processed in this system are not tax deductible, but are predominately used to help meet the local financial requirements needed to receive national matching-grant funds.
Subscribe to the Coronavirus newsletter
Get the day’s latest Coronavirus news delivered to your inbox by subscribing to our newsletter.