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City Sued Over Restaurant Leases

Great Southern Restaurant Group

Unable to reach a settlement over leases for the city-owned Pitt’s Slip property, two businessmen are taking the City of Pensacola to court.

Seville Harbour Incorporated – owned by Ray Russenberger – holds the master lease for the property on which Collier Merrill’s Fish House Restaurant and Atlas Oyster Bar are located as Great Southern Restaurant Group. The city claimed that the eateries owed more than five million dollars in payments dating back to the year 2000 when the lease was first signed.

Attorney Bruce Partington filed the lawsuit Monday in Escambia County Court, requesting that a jury be convened. He says they’re seeking relief in two areas.

“That our interpretation and everyone’s interpretation of the lease and the sublease are the correct interpretations,” says Partington. “We’re basically asking the court to confirm the manner in which the parties have been operating for more than 13 years. And then each of the complaints also has claims for damages based on the improper declaration of default by the city and the effect that that’s had on the business operations of each of the parties.”

The city contends that the Pitt’s Slip lease expired in June. In November the city threatened eviction if the disputed lease payments were not forwarded. The five million dollar claim was based on a percentage of sales plus interest over the past 13 years. That’s calculated to be roughly one year’s worth of revenues for the two restaurants.

Defense attorney Nix Daniel was unavailable for comment on Tuesday. City Administrator Colleen Castille issued a written statement late in the day. She said – quote – “It would be irresponsible for the City to comment on pending litigation. We will rely on the courts to make this decision” – end quote.

Last month the city rescinded its claim to back royalties and interest, but Mayor Ashton Hayward then sent a mixed signal, reading from a prepared statement.

“The city’s position has not changed, and most definitely the city’s not backing down,” said Hayward.

The Mayor added that the lease notice that went out to Great Southern Restaurant Group was only one of a number of similar notices sent out in a mass mailing.

Two civil complaints have been filed in Escambia County Court — the first by Seville Harbour and the second filed jointly by Merrill Land and Great Southern Restaurant Group. Attorney Bruce Partington says the separate filings reflect differences in compensatory and punitive damages.

The City of Pensacola has 30 days to file a response to the lawsuit.