Cost of Growth: Real estate battle in downtown Asheville


    Mile Chen, owner of Champa Asian and Sushi Bar in downtown Asheville, is in a legal battle with his landlord over rising rent. (Photo credit: WLOS staff)

    A downtown Asheville restaurant owner is in a legal battle with his landlord over rising rent.

    Mile Chen, owner of Champa Asian and Sushi Bar, at 3 Biltmore Ave., said he's been paying monthly rent since 2017 to his landlord, Pack Square Investors II, LLC. But, Chen said he didn't renew the lease presented because it was significantly higher than the three-year lease that expired in 2017.

    According to court documents, Chen has paid is $4301.39 a month since then. Brian Gulden, Pack Square's Asheville attorney, said the LLC officially terminated what became a month-to-month least as of this month.

    Gulden has filed a summary ejection request to get Chen and his restaurant to vacate the space, which would allow for a new restaurant tenant willing to pay a higher rent to move in. Gulden would not comment further but expects North Carolina law to dictate that Champa and Chen must move.

    Chen said he's operated his restaurant in the building for eight years. His attorney, Stephen Barnwell, said he found case law he plans to present before a small claims court judge he thinks can prove Chen has a right to stay in the building, despite an expired lease.

    "There is case law,that if you have a term specified in the prior lease, in this case, it was three-years, and if the tenant (Champa) continues to pay rent, and the landlord (Pack Square) continues to accept it, there is an implied renewal for the full three-year term," Barnwell said.

    Gulden disputes that argument. He said the old lease contains a standard clause about a holdover tenant who stays past the lease term. He said the lease provides for a month-to-month rental agreement until one party has the legal right to terminate. In this case, Gulden said his client did that for the month of February.

    Chen confirmed the property manager who collects his rent for Pack Square Investors refused to take his February rent.

    Jim Diaz, a commercial real estate broker and developer, said it's the first dispute he knows about between a landlord and tenant in the downtown Asheville district that's gone public. But, Diaz said he's not surprised, considering that "market" rents, what people will pay, have jumped significantly since 2014 when Chen's three-year-lease went into effect.

    "We have more demand for space than we have space," Diaz said.

    Miles Bender has owned an Art Gallery in Asheville for 14 years.

    "Probably, for the last 10 years, we've been looking for space somewhere along this three-block area," said Bender, who now has his gallery on Biltmore Avenue, about a block from Champa.

    "The last five or six years, things have started to change because rents in Asheville have sort of sky-rocketed."

    Bender wasn't familiar with the lease dispute up the street but is well aware space on the street is hard to come by.

    Diaz, meanwhile, thinks the fact Champa has continued to pay monthly rent won't do much to bolster any court argument that he should be allowed to stay.

    "If the lease has expired, if it's a commercial lease agreement, in North Carolina there's likely a holdover provision, and they're in a holdover period," Diaz said.

    Diaz said that's typically when an expired lease defaults into a month-to-month agreement where either party can give 30 days notice. In this case, Champa's landlord has now done that.

    "If they're not willing to release (the space), I don't know that they have much leg to stand on," Diaz said.

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