Dallas restaurant gets locked out in legal dispute with Quadrangle landlord
After five years serving upscale tacos and margaritas at its Quadrangle Dallas address, TNT Tacos and Tequila finds itself in a David-and-Goliath struggle with its landlord, Stream Realty Partners, and has filed a lawsuit charging that Stream has wrongfully interfered with the restaurant's right to do business.
Twice in the past year, Stream agents have locked out owners Jim and Liz Baron, including changing locks on the restaurant right as they were ready to reopen following the coronavirus shutdown.
That most recent lockout was on May 20.
On that day, the Barons had scheduled staff and ordered food and supplies. When they arrived at the restaurant ready to do business, they found that the locks had been changed with a default notice on the door.
In a letter to the landlord, William Wolf, the Barons' lawyer, called it "the latest illegal conduct" and "a tactical, carefully timed ambush by Landlord to try to destroy TNT's business without compliance with the terms of the Lease."
If the Barons were up to date on paying their rent, which they say they were, why would a landlord lock out a successful tenant?
Stream did not respond to a request for comment.
But from what the Barons and some other operators at the shopping center say, it appears that the businesses there stand in the way of a multi-story building Stream has in the works.
TNT's original lease was with Clover Quadrangle Corp., previous owners of the Quadrangle. Their lease was for 10 years, with options for 10 more years.
Stream Realty Partners bought the property in January 2019 with a plan to build a 12-story office building and retail, in the space currently occupied by TNT and other operators including British Beverage Co., Dream Cafe, and the Sigel's liquor store.
None of the businesses would speak on the record. So far, the only business that Stream has signed on as a tenant in the new build is Crushcraft Thai.
TNT was first locked out in March 2019.
In that situation, Liz says that, with the prior landlord, they had established a pattern where they paid rent mid-month. In addition, the address they were given to send their rent to had an incorrect zip code, and their rent check was returned.
Their lawsuit says that Stream used this as an excuse to terminate the Barons' existing lease, then forced them to sign a new lease in which the Barons can be given a 60-day notice to leave.
"Stream cited two reasons, that they hadn't received our rent that month, and the late payment, which was true — we paid rent on the 11th or 12th when it has to be in by the 10th," Liz Baron says. "In the past, the property management had accepted that. We had a history with the prior owner to pay in the middle of the month. Stream used this as a reason to lock us out."
TNT also apparently ruffled some feathers with a weekly event on its rooftop patio that brought in a rambunctious crowd every Sunday night.
"Our lease gives us the right to have music, but there is no question that in any mixed-use neighborhood, a restaurant or bar roof patio is going to occasionally get noise complaints," Jim says.
Liz says that parties and groups are in their DNA.
"TNT is a fun place," she says. "We have communal tables, we attract millennials and young groups, and we do a drag brunch on Sundays that's extremely popular."
TNT resumed business until March 2020, when they shut down for the shelter in place. They sent in a rent check on May 1 which has not been cashed. Stream gave notice to TNT to vacate the premises by May 4.
A letter from Stream's legal representative says that, "in the event that TNT remains in the Premises after May 4th, Landlord will treat TNT as a holdover tenant under the Lease and will begin charging TNT holdover rent as provided in the Lease."
"In addition, if TNT is still occupying the Premises after June 5th, the current expiration date of the Dallas County order suspending eviction proceedings, Landlord will proceed with evicting TNT."
That "June 5th" date led the Barons and their lawyer to believe they until at least then to resolve the issue.
TNT is not the only business that got locked out: British Beverage Co. also got its locks changed and has a notice on its door.
The situation is complicated further by the ever-present coronavirus which has postponed Stream's start date on its new building until fall 2020 at the earliest.
"The kosher thing would have been for them to come to us and pay us, based on potential earnings and the money we invested in the property," Jim says. "Instead, we feel like what they have done is both illegal and in light of the current coronavirus crisis, unethical."