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March 8, 2010 at 2:52 PM

Terra Plata vs. terra firma at Capitol Hill’s Melrose Project

In October, you read it here: Tamara Murphy, owner/chef of Belltown’s Brasa and owner of the Elliott Bay Cafe in Pioneer Square, was exultant over plans to open her new restaurant Terra Plata in the Melrose Project. Renovations were already underway on the merger of two historic buildings between Pike and Pine, and she expected her latest restaurant to be up and running by March. But time has a way of ticking on, and the best-laid plans can — and sometimes do — go awry.

While some businesses have already moved into the Melrose Project, and others (including Matt Dillon’s relocated Sitka & Spruce) are excitedly laying plans for a move-in, Terra Plata is not on terra firma: Murphy is in a contract dispute with her landlords that has the fate of the space headed for arbitration. Today, says her attorney Mick Fleming, she’s putting up her dukes, fighting for her tenant rights under a signed lease agreement, and praying for an outcome that will eventually have Seattle diners enjoying her “earth to table” menu here on Capitol Hill.

The would-be Terra Plata: the lease is signed, the space is empty and ready for build-out, but a contract dispute between Murphy and her landlords is raging. Today, there’s a “for lease” sign in the window.

News of the legal wrangling saw light Saturday when the Capitol Hill Seattle Blog posted photos of a “Notice of Unlawful Detainer” letter, courtesy of the law firm Caincross & Hempelmann. The notice, dated March 4 and sent on behalf of landlords Liz Dunn and Scott Shapiro, was found taped to the door of the would-be Terra Plata, describing $45,967 in unpaid-rent due, but few details.

In an e-mail reply to that posting, Dunn explained: “I don’t know who taped the letter up there and after seeing this I just went and took it down. However it’s true — in spite of our very best efforts, this deal did not work out, and the space is now available. That’s really all we can say at this point.”

Contacted today at Dunn + Hobbes, the developer reiterated her position via a prepared statement. “We are not able to discuss the situation at this time, except to say that we are disappointed that it didn’t work out.”

Murphy and her attorney, on the other hand, have plenty to say on the subject:

“There is no rent owned under this lease at all,” says Fleming, who has negotiated restaurant transactions for some of the biggest names in the business, including Chris Keff of Flying Fish and Jerry Traunfeld of Poppy. “I don’t understand why they’re trying to kick us out,” adds Murphy. “They’re doing this unlawfully, and we’re going to exercise our rights under this lease.”

Those rights have to do with the landlord’s installation of a bank of electrical meter bases in what was slated to be Terra Plata’s 20-seat private dining room and adjacent office. “That’s all of the electrical for all of the tenants in that part of the building,” Murphy says. “What this did was it totally wiped out our private dining space, and that was significant revenue for us.” Incredulous, she voiced her complaints. “They said, basically, `That’s too bad, we’re not going to do anything about it — and by the way, your commencement date [the date the tenant takes possession of the space] is December 1.”

These meters, in the lower-level space of the would-beTerra Plata, are heating things up .

The meters were installed after the lease was negotiated “without any discussion or forewarning,” agrees Fleming, who sent Dunn and Shapiro a formal letter of complaint November 20, stating the meters were a “material defect.” According to the lease, he explains, “If there’s notice of a material defect — something that won’t allow you to use your space as originally intended — that postpones the commencement date indefinitely, until the landlord either fixes it or proposes an alternative solution.”

The landlords’ solutions were either untenable or too expensive, Murphy and her lawyer say. Either way, the lease allowed two months free rent during the build-out process. “Tamara has spent a lot of time, a lot of money and a lot of energy” on Terra Plata, says Fleming. With him on as counsel from the start, “She’s always taken the position, `I want this space, and my investors want this space.'”

Fleming says multiple offers to take their dispute to a mediator have been met with no response from the landlords. “I’ve been in the restaurant business, worked as a lawyer, owner and investor for 15-20 years, and I’ve never seen anything like this,” insists the attorney, who has no investment in Terra Plata.

Until the news hit the blogosphere, Murphy hoped to quietly work out the dispute. In the wake of the news she felt it necessary to defend herself in public. Though “heartbroken” that her plans have come unraveled, “With the new cafe opening in the new Elliott Bay bookstore, and with my book `Tender,’ coming out this spring, there are still a lot of positives,” she says.

Tamara Murphy, hoping to hang on at the Melrose Project, seen hanging on at Brasa.

[Seattle Times photo, Mike Siegel]

Of her Pike/Pine predicament, “We have always hoped the landlord would do the right thing. Technically, we still have rights under the lease. It’s definitely not pretty, but it’s going to be decided in arbitration.” And if the law doesn’t lean in her favor? “Terra Plata will be built one way or another, and this year.”

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