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Sarcoa legal bill hits $759,000

Sarcoa legal bill hits $759,000

Details of the settlement that was reached between the Hamilton Waterfront Trust and the owners of the Sarcoa restaurant remain confidential, but the final tab for the HWT when the matter was finally settled in 2019 was $759,000. That was an increase of $443,000 from the accumulated expenses of a year earlier. The City picked up the legal tab and will be repaid out of the $230,000 the city is paying annually to HWT for the buyout of its lease on the former Discovery Centre. HWT Board minutes suggest the deal was approved  at the agency’s September 2019 Board meeting. The in-camera agenda for that meeting  contained a Sarcoa update, and a second item dealing with the sustainability of the organization.

The legal dispute arose after the City ordered Sarcoa to stop playing loud music on its patio. The upscale nightclub had become popular with young people but residents who lived in the neighbourhood complained about the noise. At issue was the contention by Scarcoa’s owners that the Waterfront Trust knew that the intention was to play live music and they had condoned it in a poorly-worded lease. Indeed, on the opening night of Sarcoa, Waterfront Trust Executive Director Werner Plessl and members of Hamilton City Council who were also HWT board members were photographed celebrating the opening on a bandstand that had amplifiers and instruments on it. As the music ban had seriously eroded Sarcoa’s revenues the restaurant fell behind on rent and an eviction order was executed, triggering the lawsuit.

Aside from the whopping legal bill, the Waterfront Trust posted an operating loss of $261,000, on the year and has lost more than $1.3 Million over the past five years. The agency relies for solvency on the $2.6 Million note it put on the books from the city for surrendering its lease on the Discovery Centre.  With the losses the HWT has incurred, since then, the book value of that note is down to $1.3 Million

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