UPDATED: JUNE 25, 2018 8:43 PM — A leading restaurant tenant in the I-Shops shopping center along International Drive is suing landlord Unicorp National Developments, claiming the developer hasn't protected its contractually guaranteed parking spaces -- a key factor in its choice to lease some of the most expensive retail property in Greater Orlando.
Chuy's Tex-Mex entered its lease agreement in June 2012 with Unicorp affiliate I-Shops, LLC for a prominent pad at 8123 I-Drive, just south of the intersection with Sand Lake Road.
The restaurant chain made a point to contractually acquire a covenant from the landlord, which stipulated only employees and customers of I-Shops tenants could use the common parking area.
Language in the lease specifies a ratio of parking spaces to be allocated to the I-Shops tenants (approximately 800), and that Unicorp shall not allow this parking area to be used by other businesses, temporarily or permanently. That would require active enforcement by the landlord.
But since a separate declaration was made in 2014, guests of the adjacent Wyndham Orlando Resort International Drive have been using the I-Shops parking lot freely.
For Chuy's management, the situation reached a boiling point after August 2017, when a growing number of events at the Wyndham led to a full parking lot nearly every day during peak dining hours, said Kevin P. Robinson, attorney with Zimmerman Kiser Sutcliffe P.A. representing Chuy's in the suit filed earlier this month in Orange County Circuit Court.
He contends Unicorp should be protecting the I-Shops parking spaces that it committed contractually to for the tenant.
"In order to get Chuy's to lease at I-Shops the landlord made promises of parking, and we want them to comply with those promises," he told GrowthSpotter. "Chuy's is also entitled to compensation for the landlord's failure to deliver what it promised between 2014 and now."
Unicorp CEO Chuck Whittall called the Chuy's complaint "completely without merit."
"I'm sure sometimes the hotel (guests) park there and go eat at Chuy's, or the Mango's (Tropical Cafe) customers park there because their garage isn't open yet," he said. "We don't police it, and Chuy's wouldn't want to pay for that if we did. When the parking area is full (Chuy's) will be full. I'm certain when the Mango's garage is open that will alleviate it all."
Unicorp's attorney, Ben Iseman with law firm Swann, Hadley, Stump, Dietrich & Spears in Winter Park, had yet to file an affirmative defense as of Monday.
I-Drive frontage between Sand Lake Road and the Orange County Convention Center is among the most expensive land in Greater Orlando for restaurant and retail leasing.
Its value lies in that area being the epicenter of Orlando tourism, with more than 47,500 hotel rooms in a three-mile radius, and the year-over-year record numbers of visitors from across the country and world.
"It's an opportunity for time-proven and new restaurant concepts to get exposure to parts of the world that wouldn't be feasible otherwise," said John Krzyminski, managing director for retail investment at Cite Partners.
"Prime locations on International Drive are highly sought after and allow landlords to have strong requests," he continued. "For example, it is not uncommon for landlords to be able to get new tenants without having to offer TI (tenant improvement) capital."
Parking is always a concern for retail sites along I-Drive, and any restaurant wants to make sure they have sufficient parking allocated, Krzyminski said. But walkability in that stretch of the corridor is also the best that vendors will find anywhere on I-Drive.
Chuy's attorney Robinson had photographs taken on the morning of June 11, when an event at the Wyndham filled most of the I-Shops parking lot before the restaurant opened for lunch at 11 a.m.
Evening valet parking for Mango's Tropical Cafe in the I-Shops lot is not viewed by Chuy's as a cause of their problem, he added.
Joshua Wallack, principal owner of Mango's and developer of the Hollywood Plaza parking garage next to it, anticipates having a certificate of occupancy to open the garage in the next 30 to 45 days.
Chuy's considers the lack of parking enforcement by Unicorp damaging to its bottom line, and a breach of the lease's parking covenants. The restaurant is seeking damages, and a court injunction that forces the landlord to enforce parking rules.
Other retail and dining tenants in I-Shops had mixed responses on Sunday over how shared parking with the Wyndham has been managed.
Staff at BJ's Restaurant & Brewhouse told GrowthSpotter their view is the same as Chuy's, that parking availability for customers has become a problem during peak dining hours.
At Orlando Ticket Store, manager Richard Kirkwood said his complaints to Unicorp within the past year about parking were heeded.
The landlord designated six spots directly behind the store with signs noting "30-Minute Limited Parking," which was a fair solution to the problem, Kirkwood said.
Chuy's attorney Robinson cited another case of a Unicorp affiliate in Winter Park where restaurant parking led to a legal dispute.
In October 2013, Unicorp entered into a lease with Romacorp, Inc., where it opened a TR Fire Grill restaurant on commercial frontage of the Ravaudage development at Orlando Avenue and Lee Road.
Romacorp sued the Unicorp affiliate this past February, the same month a closing was announced of that restaurant.
It claimed that a lack of parking led to TR Fire Grill's failure, and that Unicorp's Whittall promised the use of parking area during lease negotiations that was already part of an exclusive agreement for Miller's Ale House.
The two parties settled that case in mid-March, terms of which were not disclosed. Unicorp sold the property roughly a week later.