Owner of Perkins restaurant, leaders of Southland church exchange lawsuits

Attorney: church's bid to raise rent is 'skullduggery'

jkegley@herald-leader.com, ksheridan@herald-leader.comOctober 29, 2011 

Members of Southland Christian Church, which recently bought the long-dormant Lexington Mall on Richmond Road, are acting in "bad faith" by trying to interfere with a local restaurant owner's business at the property he has rented for 20 years, according to a claim filed in Fayette Circuit Court.

The claim, filed Thursday on behalf of Mark Perkins, the owner of Perkins Family Restaurant on Richmond Road, says the property manager has taken unscrupulous steps to drive the 24-hour diner out of business, including turning off or reducing the brightness of lights on the property, letting brush become overgrown and generally keeping the property "in a dirty and unsanitary condition."

"It's just some skullduggery that they're trying to pull," Perkins' attorney, Gatewood Galbraith, told the Herald-Leader on Friday.

Perkins filed the claim against Lexington Mall Properties Inc. and Southland Christian Church, which is building a satellite campus at the former mall site. The filing is a response to a lawsuit filed Oct. 4 in Fayette Circuit Court by Lexington Mall Properties.

The company contends Perkins' lease has lapsed, and that he should pay double his normal rent for each month he has stayed past the lease's expiration on May 31. Lexington Mall Properties, which is managed by officials from Southland Christian Church, also seeks the immediate surrender of Perkins' restaurant.

Perkins says in his filing that the lease has not lapsed. The filing says Perkins reached an agreement with Saul Holdings Inc., the former owner of the mall property, before it was sold to Southland last year. He made clear to church leaders his intention to renew his lease, according to the lawsuit.

"He asked several times whether, in fact, they were satisfied that he was going to renew, and they assured him that they were," said Galbraith, a Lexington attorney and an independent gubernatorial candidate.

Southland Christian's executive pastor, Chris Hahn, deferred all comment to Lexington Mall Property's attorney, Robert S. Ryan, who could not be reached Friday.

The two parties are in bitter disagreement over the value of fair rent for the restaurant. Galbraith said Lexington Mall Property's appraisers have said the property should fetch $10,000 a month based on the company's assessment of the property's value. That's more than twice what Perkins paid during his last contract. Under his old lease with Saul Holdings, Perkins paid $4,166 a month in rent, the lawsuit says.

Each side blames the other for stalling the appraisal process, which would set a rent amount. The process requires an appraiser for each company to select a third appraiser. The final rent total would be decided based on an average of the three appraisers, according to the lawsuit.

Lexington Mall Properties says Perkins' appraiser was unqualified. Perkins says the property owners did not submit their appraisal until after Perkins' lease already had taken effect.

Because the appraisal has not been completed, Perkins has paid a little more than $3,000 a month, based on his own appraiser's recommendation, Galbraith said.

Galbraith said the rent should be lowered because the property has been "an eyesore, a neighborhood nuisance and an embarrassment to the community" since the last of the mall's stores vacated in 2005.

The attorney says Lexington Mall Property's "astronomical rent" appraisal is based on projections of what the property's value will be once the satellite church is up and running. Hahn told the Herald-Leader that the church expected to open at the end of 2012.

The two parties also disagree on whether Perkins made clear his intent to renew his lease.

Lexington Mall Properties' lawsuit says Perkins did not provide written notice in a timely manner. However, Perkins said he made his intentions clear to leaders of Southland Christian Church.

Southland Christian Church became the owner of Perkins' lease after it bought the former Lexington Mall property from Saul Holdings in September 2010. The property was later sold in parcels to Lexington Mall Properties Inc.

Perkins said in his filing that Southland Christian, a non-profit organization with a charitable tax-exempt status, set up the for-profit Lexington Mall Properties in a bad-faith effort to cheat Perkins. "This is in fact a non-profit organization trying to use a private organization to obtain their own needs," Galbraith said.

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