LOT 579 Tenant Says Food Court is No Anaheim Packing District

Food halls, Henry Grabar wrote in Slate two years ago, are the “hottest new idea” of the 21st century. “[A]n open floor plan; fresh food prepared in front of your eyes; a post-industrial space, or at least one with high ceilings, exposed wiring, and hanging air ducts,” he wrote. “Good-looking people hunched on long benches over small plates or perched on stools around dozens of tiny countertops. The accidental flash of a bad Instagram. The places brim with noise—perhaps even a kind of working sound, an occasional butcher’s chop, something left over from a more utilitarian period, or at least the roar of an espresso machine.”

If this sounds like the Anaheim Packing District, located in a redeveloped Sunkist fruit packing plant that dates to 1919, that’s because it’s probably the best Orange County example of a food hall. In fact, it’s such a good food hall model that one tenant of LOT 579, the food court at Pacific City in Huntington Beach, says it was the inspiration behind that mall’s food operation.

LOT 579’s website certainly makes this case, calling itself: “a true California culinary experience and home to some of the most sought-after and award-winning eateries in Orange County, serving everything from fish tacos to a spaghetti grilled cheese.” But a new lawsuit filed against Pacific City’s owners disputes all that. The suit says that while Pacific City owners allegedly promised their operation would be just like Anaheim Packing District, they instead produced a “largely dead” and “mundane” food court.

“Defendants represented (1) that the tenants of LOT 579 would be highly curated, like the Anaheim Packing District; (2) that the design, layout and atmosphere would be like the Anaheim Packing District; and (3) that Defendants would conduct frequent relevant programming, activations and entertainment events like the Anaheim Packing District in order to generate significant interest in as well as foot traffic to LOT 579 for the local community and visitors alike,” states the lawsuit, which was filed on May 24 in Orange County Superior Court on behalf of LOT 579 tenant Beau Soleil. “All parties recognized the need for LOT 579 to provide potential customers with a valid and ever-changing reason to visit.”

But that, say the owners of Beau Soleil, never happened. In fact, Beau Soleil’s owners say that the company that owns Pacific City also owns restaurants in that mall–Bungalow Restaurant and Bar and BlueGold Restaurant–that compete with its own Lot 579 food court.

“Even the most cursory review of the curation, build out and operation of LOT 579 reveals that Defendants never intended to actually carry out their promises, but made them purely to trick tenants into investing hundreds of thousands of dollars building out and operating their spaces,” states the lawsuit. “But far from the lively bustling atmosphere promised by Defendants, and in stark contrast to the continuously lively Anaheim Packing District, LOT 579 is largely dead most days of the week, and most weeks of the year with little to no programming and has been left languishing, relying on what sparse traffic it can draw from the adjacent Pacific City Mall where the Landlord is invested in the operations of competing Food and Beverage operations.”

Beau Soleil’s owners also contend that Pacific City has done nothing to stimulate business in the LOT 579 food court. “While the Anaheim Packing District has a stage near the center of the building where musicians are frequently performing live music, LOT 579 has no such center of activity or focus and, instead, has been arranged like the traditional and mundane food court it was not supposed to be,” states the lawsuit.

This isn’t to say that there’s no music at LOT 579. In fact, if you go to the LOT 579 website, you’ll see that it specifically says there’s “live music Friday nights from 7-9 p.m.” This, Beau Soleil owner Larry Russ says, may actually be making things worse for tenants.

“With respect to music on Friday nights, there was no music until a couple of months ago,” Russ said in a June 11 email. “Recently, an acoustic guitar player has appeared in the middle of LOT 579 from 7-9 p.m. on a Friday night. According to the tenants, this does the tenants no good because coffeehouse music that produces no excitement on a Friday night is counter-productive. The tenants believe that live music with a beat would be more appropriate, among other things. Incidentally, this music only started since we started threatening to sue based upon the allegations of the Complaint.”

In response to the lawsuit, a Pacific City spokesperson, who asked not to be named, offered only this brief statement: “Pacific City’s popular food hall LOT 579 is central to the Pacific City experience. The numbers speak for themselves: LOT 579 is over 95 percent occupied and averages between $700 to $800 per square foot in sales. That’s more than double the national average. DJM is proud of LOT 579’s success and that Huntington Beach and beyond have embraced this thoughtfully planned, vibrant food-and-beverage concept. We have always supported our tenants at LOT 579 and will continue to do so.”

As for Russ, he says nothing’s changed since he filed suit.

“Since the filing of the lawsuit, no changes, proposals or offers of compromise have been made,” Russ said. “In fact, before filing the lawsuit, we asked the defendants to sit down with us and negotiate a business resolution. That proposal was rejected and no meeting was held. After filing the lawsuit, we sent a proposal with three alternative approaches to resolve the issues raised in the complaint. Again, we invited the defendants to sit down with us to explore a reasonable business solution. Counsel for defendants simply responded that all of our proposals were rejected and there was nothing to talk about.”