Legal Sea Foods has filed suit against the Metropolitan Washington Airports Authority over its lease at Ronald Reagan Washington National (DCA).
The suit alleges the airport authority leased the space to another restaurateur in violation of a law that requires an open and transparent bidding process.
Roger Berkowitz, president and CEO of Legal Sea Foods, says the restaurant’s lease had expired in December, but the company was going to month to month during negotiations to stay in the space. Negotiations had been agreeable until he says the authority conveyed that Legal had to spend $2.3M on renovations.
“Given it was a recession,” he says, “we felt that we may not have to hit that figure because contractors and vendors were dropping their prices, so it may not be that amount. … We had to spend at least that amount, and anything that we hadn’t spent up to that amount, we could write a check to MWAA. That rubbed us the wrong way.”
Berkowitz says MWAA also told Legal that it would have to completely close during the renovations in August, which is a busy time for the restaurant. Legal wanted to do it in stages, so it could keep people working and have revenue coming in during the three or four months the renovations would take place. The company offered to close in January instead; MWAA said no to both requests, he says.
The restaurant has been at the airport for 12 years and has won numerous awards; Berkowitz says it has been a solid contributor to airport revenues. He says he had thought all parties were moving forward with negotiations in good faith until he found out about a month ago that MWAA had signed a lease with a licensee that would operate a restaurant concept that had been out on the street but had no airport experience. It was a licensee, not the owner/operator, and an unproven restaurant in an airport setting.
“During the process, there really wasn’t an RFP that came out,” he says. “They were very vague when I asked them about it, and there was zero degree of transparency in how this was carried out.”
The relationship between Legal Sea Foods and the airport had been a bit strained the past couple of years, he says, with a few odd things happening.
“It’s difficult, I think, to operate in an airport anyway, because you have to have approval for menus and prices and street prices,” he says. “One of the things we found is that it’s been taking an inordinate amount of time to get approval for menu and price changes and new items coming the menu. Other vendors were getting turnaround times in a week or so. … We were wanting to change out seats that were torn – this is going back 1½ to 2 years – and they were delaying the OK to change the seats for five weeks.
“It’s stuff we put up with because I think it was something that a working scenario for us, for our employees [and] certainly for the guests of the airport,” he continues.
The restaurant was told by the authority to be closed Aug. 16. A hearing has been tentatively scheduled for Aug. 7, but the parties were expected to be in court Friday, trying to get some discovery.
MWAA declined to comment, saying, “It is unfortunate that Legal Sea Foods has chosen to file a lawsuit in this matter and the airports authority will respond appropriately in court.”
