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Tuesday Mar 13, 2012

Suncoast casino wants restaurant evicted

The owners of the Suncoast Casino and Entertainment World have brought an urgent application in the Durban High Court to evict the popular Centre Court restaurant so they may build a R35-million extension to the gaming floor.

The matter was argued before Judge Jacqui Henriques yesterday and she reserved judgment.

Tsogo Sun Kwazulu-natal, the casino owners, said it cancelled a five-year lease agreement with the restaurant last year.

In court papers, Tsogo Sun's executive director, Michael Dowsley, who is responsible for Suncoast Casino, said the lease agreement had been cancelled in February last year. Thereafter, Tsogo Sun embarked on court action to evict the restaurant.

The casino said the restaurant had breached the lease agreement as it had failed to pay its rent in time on several occasions in the past few years and at least 16 letters of demand had had to be sent.

Dowsely said that after meetings with the restaurant's owners, they withdrew the court action and decided to reinstate the lease on a monthto-month basis.

He said that Tsogo Sun had been unwilling to make the contract for a longer period as it needed the area occupied by the restaurant for expansion. In November, the restaurant was given notice that its month-to-month lease was being terminated and it had to move out.

Dowsely said extending the casino floor would cost about R35.2 million and take four months.

He suggested that at least 36 new employees would be hired once the expansion was complete. It was expected that monthly revenue of R3.3m would be gained.

"The delay in commencing with the expansion work accumulates to a substantial loss."

Opposing the eviction, Panayiotis Economou, one of the restaurant's directors, said in an affidavit that the restaurant was the "largest and most successful of the casino's tenants".

He said the restaurant had spent about R7m in installation costs, training and advertising. It incurred losses when it initially began trading.

"The respondent suffered substantial losses in its first eight months as the casino was not a popular venue.

"The applicant recognised that foot traffic on the premises was due to the attraction of the respondent's restaurant and in fact that it was a model tenant. The restaurant is not only fully booked every day, but there are also queues outside."

Economou said the cancellation of the lease by the casino was not valid.

"There is no genuine dispute with the lease. The real agenda was to place the restaurant in a position where it would be receptive to a proposal to relocate.

"They expect the restaurant to shut down a large business, retrench 76 employees and abandon its initial costs. The applicant seeks to destroy the business without any attempt to compensate it."

Economou said the restaurant's directors had been given a verbal undertaking that they would be asked to move only once alternative premises were found.

The restaurant also filed a counter-application and asked that the matter be set down for oral evidence or trial and that the casino be prevented from evicting it until the matter was finalised.

It argued that the municipality had refused Tsogo Sun permission to extend its casino floor because its integrated development plan would have to be changed and the city's strategic projects unit would have to be consulted. Also, the Gambling Board had not approved the extension.

The Mercury

    
 

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