Hunter House given ultimatum for ground lease
By Grace Lovins
A tri-party ground lease agreement between Birmingham, Hunter House Hamburgers and Select Commercial Assets Hospitality for the city-owned property on the corner of Woodward Avenue and Maple Road finally moved forward at the city commission meeting on Monday, November 14, effectively giving Hunter House an ultimatum to sign the agreement or lose the lease.
Kelly Cobb, owner of Hunter House Hamburgers, and Hesham Gayar, property owner of Select Commercial Assets Hospitality, have been in a dispute over the development of 35001 and 35075 Woodward Avenue for nearly six years. Gayar has proposed a five-story mixed used building that would occupy the two land parcels in addition to the city-owned lot, which was approved by the planning board back in 2021.
During the process, Cobb and Gayar appeared before the commission at multiple meetings laying their outside disputes in front of the board. Cobb and Gayar have both attempted to enter lease agreements separately with the city in the past but have been denied given the conflict between the two. The city opted to deny the leases in the hopes that Cobb and Gayar would reconcile, but that hasn’t been the case.
City attorney Mary Kucharek explained to the commission that the ground lease agreement between the city and two other parties was created from two previous agreements that went before the commission but were shot down. The key difference with the new lease is that it will allow Hunter House to continue to use the city’s lot for parking up until construction for the new development begins. Once all permits are in place and construction begins, the lease for the city’s lot will transfer over to Gayar.
While it is typically expected that a lease presented to the commission would be signed by whichever parties' necessary, Cobb had declined to sign the agreement. Cobb’s counsel, David Harden, explained that Cobb would not sign the agreement because the city attorney would not accept an invitation to meet about the contract she said was non-negotiable, the language in the agreement suggests Gayar could give no notice to Cobb before he boots him out of the restaurant to begin construction, and he was sent different versions of the agreement that, according to Harden, allowed Gayar to make changes although Kucharek said it was non-negotiable.
Harden also took issue with the fact that Gayar is not obligated to complete the project and could displace Cobb and leave him without a new building to operate in. In response, Kucharek thoroughly explained that the lease makes it clear Gayar must give written notice, at the very least, and the Hunter House won’t lose the city’s lot for parking until construction of the new development begins. Gayar's new development provides a space for a new Hunter House operation.
“This has been going on for years and years and years. At some point something has to give. The purpose of the tri-party agreement was that time to give. The reason I was not interested in sitting down and negotiating was because we’ve already done that on two separate leases,” Kucharek said. “Both of their contracts that they agreed to are part and parcel in this agreement. The lease transfers upon construction. Construction only occurs with all the proper permits, approvals and with the building official saying, ‘You may proceed.’ … It’s up to the two of them to make any further agreements, which they can’t seem to do, which they keep dumping on [the commission’s] lap.”
Commissioners Katie Schafer and Brad Host both told the board they weren’t comfortable with entering a lease agreement with either party given that the commission has asked Gayar and Cobb to resolve their issues outside of the city meetings but have yet to do so.
“It’s been my observation over the last several years as an observer, and now on the commission, that what has been requested by the city commission is that these two parties come to some agreement,” Schafer said. “It seems to me over the last few months that this keeps coming in front of us with a different wig on it to try and make sense of it, and I think it’s been clear tonight that none of this seems to make any sense. There’s a lot of smoke going into the room, and I don’t know what the right answer is.”
After lengthy discussion, other commissioners felt that it was appropriate to move forward, and the new tri-party lease agreement made the best use of the city-owned property. Commissioner Pierre Boutros shared that he felt this was in the best interest of the city, and if the commission didn’t decide to act at the it could be another 10 years before Gayar’s proposed development comes to fruition.
The commission voted 5-2 to move forward with the tri-party lease agreement, giving Hunter House until Friday, November 18, at noon to sign or the lease will automatically be given to Gayar. Schafer and Host both voted against the motion.
