8 ERIE ST. JC LLC v. CITY OF JERSEY CITY

CourtDistrict Court, D. New Jersey
DecidedJuly 12, 2024
Docket2:19-cv-09351
StatusUnknown

This text of 8 ERIE ST. JC LLC v. CITY OF JERSEY CITY (8 ERIE ST. JC LLC v. CITY OF JERSEY CITY) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
8 ERIE ST. JC LLC v. CITY OF JERSEY CITY, (D.N.J. 2024).

Opinion

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

8 ERIE ST. JC LLC,

Plaintiff, Civil Action No. 19-9351 (SDW) (JRA) v. OPINION

CITY OF JERSEY CITY, et al., July 12, 2024

Defendants.

WIGENTON, District Judge. Before this Court are Defendants City of Jersey City, Jersey City Council, Jersey City Planning Board, and Jersey City Redevelopment Agency’s (collectively, “Defendants”) Motions for Summary Judgment (D.E. 145–47 (“Motions”)) pursuant to Federal Rule of Civil Procedure (“Rule”) 56. This opinion is issued without oral argument pursuant to Rule 78. For the reasons stated herein, Defendants’ Motions are GRANTED. I. FACTUAL AND PROCEDURAL HISTORY1 A. Facts

On or about May 13, 2015, the City of Jersey City (“the City”) enacted two ordinances2 (“Ordinances”) that required buildings in certain parts of Downtown Jersey City to limit “formula

1 Citations to “D.E.” refer to the docket entries for the Complaint and the parties’ motion papers, including briefs, affidavits, declarations, and exhibits attached thereto. Facts cited in this opinion are drawn from Defendants’ Statement of Material Facts, (D.E. 145-2, 146-1), Plaintiff’s Supplemental Statement of Material Facts, (D.E. 148-1), Plaintiff’s Response to Defendants’ Statement of Material Facts, (D.E. 148-2), Defendants’ Joint Response to Plaintiff’s Supplemental Statement of Material Facts, (D.E. 153-1), and the record documents cited therein. The facts are undisputed unless noted otherwise.

2 The two ordinances are Ordinance nos. 15-052 and 15-053. (D.E. 145-1 at 7.) businesses”—commonly known as “chain stores”—to no more than thirty percent of their ground floor commercial area. (D.E. 145-5 at 76–90.) Plaintiff 8 Erie St. JC LLC (“Plaintiff”), a New Jersey limited liability company with its principal place of business located in Jersey City, New Jersey, is the owner of a property located at 8 Erie Street, Jersey City, New Jersey, 07302, which

was one of the many commercial properties subject to the Ordinances’ restriction. (Id. at 89; D.E. 148-1 at 3 ¶ 1.) At all relevant times, Alfonso Carrino was Plaintiff’s principal and managing member. (D.E. 145-2 at 1 ¶ 1.) In 2015, a non-formula business restaurant named Talde began renting and operating in an approximately 3,500 square-foot ground floor commercial space at 8 Erie Street (“the Property”). (Id. at 2 ¶¶ 6–7; D.E. 145-5 at 101, 21:11.) Plaintiff began looking for a new tenant for the Property in early 2019 while Talde was still occupying the Property.3 (D.E. 145-5 at 110, 56:20-25; D.E. 148-1 at 34 ¶ 130.) Talde occupied the Property until about August 2019. (D.E. 145-2 at 2 ¶ 8; D.E. 145-5 at 112, 63:18-22; id. at 169.) Arto Ozgun, an investment partner and co-owner of RMA Holding, which owns six

Bareburger locations and the franchise rights to open Bareburger restaurants in New Jersey, learned through his broker in 2019 that the Property was available for rent. (D.E. 145-5 at 147, 12:1-11, 13:1-7.) Sometime between January 1 and July 30, 2019, Ozgun went to see the Property during which he expressed to Plaintiff his interest in leasing it. (D.E. 145-2 at 5 ¶ 22; D.E. 145-5 at 149, 20:4-15.)

3 Plaintiff alleges, and Defendants dispute, that it began seeking a new tenant because by early 2019 Talde was having financial difficulties and had not paid rent. (See D.E. 148-1 at 34 ¶¶ 128–29.) Plaintiff has not provided any evidence, other than Carrino’s own testimony, to support this assertion. Other than confirming that Talde had a lease, Carrino could not recall how long Talde’s lease was, the amount of rent Talde paid, or whether Plaintiff sought to recover rent owed by Talde. (D.E. 145-5 at 108, 49:10-18; id. at 109, 51:24-52:3.) On or about March 19, 2019, Plaintiff’s attorney sent a letter to the City demanding that “the City immediately repeal the Ordinance[s],” but the letter does not say whether the Ordinances prohibited Plaintiff from leasing the Property to Bareburger. (D.E. 148-16 at 2–3.) Plaintiff filed the instant suit on April 5, 2019. (D.E. 1.) On May 8, 2019, the City repealed the Ordinances.

(D.E. 145-5 at 92–94.) Ozgun and Plaintiff continued to negotiate Bareburger’s potential lease of the Property after the Ordinances were repealed. (D.E. 145-2 at 4–7.) In addition to leasing the commercial space at the Property to Bareburger, Carrino wanted to sell the liquor license it had purchased for Talde as well as the contents of the restaurant to Bareburger as part of the deal. (D.E. 145-5 at 105, 35:6-21; id. at 150, 25:2-8; id. at 169–71.) On July 30, 2019, Ozgun sent two letters of intent to Plaintiff: the first letter set forth proposed lease terms for the Property (“Lease LOI”); the second letter set forth terms for the purchase of Talde’s business and liquor license (“Purchase LOI”). (Id. at 165–71.) The Lease LOI states that the anticipated delivery of possession and/or occupancy date for Bareburger was October 2019. (Id. at 166.) At this time, Ozgun understood that “there was no restriction for [him]

to negotiate” for the lease of the Property. (Id. at 155, 45:9-10.) On August 21, 2019, Ozgun’s broker sent a revised letter of intent for the purchase of the liquor license to Carrino. (Id. at 175.) On September 18, 2019, Carrino indicated in an email to Ozgun that they had met the day before to “discuss the possibility of Bare[b]urger renting” the Property, that they were a “little a part [sic] on the numbers,” and that he had in mind a different “monthly ‘dollar amount.’” (Id. at 173.) In the same email, Carrino also provided a list of proposed terms to Ozgun. (Id.) Ozgun continued his negotiations with Carrino. On September 21, 2019, Carrino asked Ozgun over email to consider increasing his “key money”4 offer and recommended that Bareburger obtain financing from a bank called ConnectOne to “get the deal done.” (Id. at 175– 76.) On September 25, 2019, Ozgun advised Carrino that ConnectOne would not provide

financing to Bareburger. (Id. at 182.) On October 15, 2019, Carrino told Ozgun via text messages that the bank would not provide financing and that “[r]espectfully, [we] suggest you look at other possibilities.” (Id. at 185.) On October 19, 2019, Ozgun conveyed to Carrino that he might be able to provide additional cash and asked to speak with Carrino. (Id. at 186.) On October 20, 2019, Carrino advised Ozgun by email that Plaintiff had accepted an offer from a different restaurant that was “very close to our original asking price,” and that the parties would sign the lease contract the same week. (Id. at 179.) On February 3, 2020, Plaintiff executed a lease with a different restaurant named Hudson Hound, which agreed to pay more rent than Bareburger. (D.E. 148-1 at 44 ¶ 179.) B. Procedural History

Plaintiff filed the instant lawsuit on April 5, 2019, (D.E. 1), and the case was reassigned to this Court on September 19, 2023 from former Judge John Michael Vazquez. (D.E. 142.) In two prior decisions, (D.E. 56, 77), Judge Vazquez dismissed with prejudice Plaintiff’s: facial challenge to the Ordinances under the Commerce Clause as barred by the statute of limitations; and claim for declaratory and injunctive relief as moot. Plaintiff filed the operative Second Amended Complaint (“SAC”) on March 22, 2021. (D.E. 81.) The SAC asserts as-applied challenges to the

4 “When renting commercial properties in which the premises already contains various trade-fixtures, equipment, electric, and plumbing (items typically left when a former tenant vacates), such items have a value above the typical rent for an empty ‘vanilla shell’ premises.

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8 ERIE ST. JC LLC v. CITY OF JERSEY CITY, Counsel Stack Legal Research, https://law.counselstack.com/opinion/8-erie-st-jc-llc-v-city-of-jersey-city-njd-2024.