Specialty grocer Jimbo’s Naturally is asking a San Diego Superior Court judge to block any efforts by developer Stockdale Capital Partners to turn Horton Plaza into a technology office campus.
The locally owned business earlier this month amended its existing lawsuit against the downtown center’s previous owner to incorporate Stockdale, arguing the real estate investment firm is also violating the terms of the grocer’s lease. In addition, the complaint now includes two charges specific to Stockdale and requests that the court prevent the property owner from doing anything further to hurt Jimbo’s business.
Jimbo’s first sued previous mall operator Wesfield in May alleging a breach of contract that led to a multi-million dollar loss in sales.
“To the extent the proposed redevelopment of Horton Plaza would violate the new owner’s obligations under the lease and restrict access to Jimbo’s — e.g. interfere with Jimbo’s parking or locate a crane directly in front of Jimbo’s door — we intend to seek an injunction from the court to prevent such interference with Jimbo’s rights,” said Jack Leer, an attorney for Jimbo’s Naturally.
Horton Plaza, which opened in 1985, is a 900,000 square-foot retail center that has devolved from a San Diego landmark to what is often referred to as a homeless encampment. The mall, visited by 25 million people in its first year, is currently home to just a handful of retail tenants, including Jimbo’s, 24 Hour Fitness and Macy’s. Last year, Stockdale Capital Partners purchased the property for $175 million with a plan to repurpose Horton Plaza’s post-modern buildings as an employment hub that would appeal to elite tech companies.
That plan could be put on hold, or killed altogether, if Jimbo’s gets its way in court.
Founded by Jim “Jimbo” Someck in 1984, the grocer operates five stores in San Diego County, and specializes in local and organic produce. It has been a Horton Plaza tenant since 2012, when it signed a 15-year lease agreement and pumped $5 million into the location to make it a flagship venue. That investment, Someck contends, was only made because Westfield promised to spend hundreds of millions on upgrades to the center.
“However, at some point after Jimbo’s had signed the lease and opened its store, Westfield apparently abandoned its plans to renovate Horton Plaza and decided to sell the mall instead,” the lawsuit states. “Rather than improve and operate Horton Plaza as a first-class regional shopping center, Westfield cut off any further investment in Horton Plaza while it sought a buyer.”
For its part, the new owner has “continued to allow Horton Plaza to deteriorate …. They have taken no steps to bring Horton Plaza back up to a first-class regional shopping center. To the contrary, given their plans to close the mall for at least two years, they have no interest in operating the mall in any manner, let alone a first-class manner,” the complaint now reads.
The phrase “first-class regional shopping center” appears often in the legal challenge and is key to the complaint. Jimbo’s believes that the terms of the lease that it signed guarantee it such a facility. Instead, the grocer is an anchor tenant in what the suit calls, “at best a third-rate shopping mall that feels desolate and abandoned, where crime has flourished and shoppers and retailers alike are concerned for their personal safety.”
And Westfield isn’t the only one to blame. When reached by phone Thursday, Someck said he was disturbed by the new owner’s disregard for the businesses still operating at the mall, which deal with frequent safety issues. Incidents have escalated in their frequency and severity since Stockdale took over, according to a letter and incident log, with pictures, that Jimbo’s attorney sent last week to firm director Dan Michaels.
“You’ll see that the location of Jimbo’s mailbox and other common areas have turned into restrooms for the homeless that staff members are afraid to enter,” the letter states.
Stockdale Capital Partners, through spokesman Chris Wahl, turned down inquiries to participate in this story. Westfield, for its part, has denied all allegations of wrongdoing in filings with the court.
Both firms are, however, about to be named in another suit related to Horton Plaza’s condition. The franchise owner behind the former Burgerim location at Horton Plaza will soon file suit against Westfield and Stockdale for breach of contract, fraud and other claims. The company is seeking $2 million in damages, said Niv Davidovich, a lawyer for Burgerim franchise owner, Irwantio, Inc.
The fast-casual burger chain opened at Horton Plaza in November 2017 in a 1,500 square-foot kiosk that was built as part of the city’s $18 million investment in the center’s park space. The location closed 13 months later.
“The tenant was told (by Westfield) when they signed the lease that Horton Plaza park would host 150 events every year, and none of that came about,” Davidovich said in a phone interview on Thursday. “From our perspective, when you buy a property, you step into the shoes of the prior landlord. It becomes your responsibility.”
The legal challenges come as the city works with its downtown planning agency, Civic San Diego, in private negotiations to determine what to do about land entitlements. One restriction, as noted in the Horton Plaza Owner Participation Agreement, stipulates that a minimum of 600,000 square feet of the site be used for retail.
Someck, however, is taking preemptive action to keep Jimbo’s lights on, despite claiming to lose money on operations on a daily basis. He fears even greater loses should Stockdale shutter the center’s parking garage and place a construction crane in front of his store. Hence the legal plea to stop any development that interferes with his business. He’ll also take his grievances to City Council, should he get the opportunity.
“If they go in front of the city, I'm going to fight it,” Someck said. “Someone from the city should force them to do something — irrespective of the future — so that the present gets taken care of.”
Jimbo's Natural Family Inc vs Horton Plaza LLC, case No. 37-2018-00025251-CU-BC-CTL, was filed May 22, 2018 with the Superior Court of California, County of San Diego. The amended complaint was filed Jan. 11, 2019.