UNC real estate disputes lawsuit

UNC’s real estate arm is fighting back against a former University Square business after being accused of dishonest business practices.

Maisie Coborne, who owned former University Square restaurant Butternut Squash, filed a lawsuit in October against Chapel Hill Foundation Real Estate Holdings, the University’s not-for-profit real estate group.

Coborne said the real estate group failed to inform her about the restaurant’s chances of keeping a location in the redeveloped University Square.

Coborne did not return multiple calls for comment Tuesday.

University Square will be demolished in 2014 and be rebuilt as a mixed-use development with 125,000 square feet of office space and 50,000 square feet of residential properties, along with retail and civic spaces.

Coborne alleged that the Chapel Hill Foundation made promises to help Butternut Squash and other tenants find temporary spaces during the redevelopment and allow them to move back into their spaces once renovation was complete.

But Chapel Hill Foundation denies it made such a deal. In a response filed Dec. 12 through the Orange County Courthouse, the Foundation said it never promised to extend leases to the tenants or relocate them after redevelopment.

The Foundation held that it wanted to work with tenants to minimize the impact of the redevelopment, but said specific arrangements were never discussed.

The Foundation also claims it went above and beyond it’s legal obligations to help Butternut Squash stay in business when it was struggling financially.

According to the court document, the restaurant’s January 2010 rent payment was rejected by the bank due to insufficient funds.

The payment was successfully made later in the month, but the business defaulted on its rent again the next month. The Foundation offered the restaurant an installment plan, which Butternut Squash accepted, to help them make up the missed payment.

The restaurant couldn’t make its payment again in June 2010, so the Foundation agreed to reduce the rent amount for June through September, according to the document.

The reduced rate was later renewed until May 2011 and then extended to June 2013.
According to the document, the property manager tried to help the owners find a new location for the restaurant in August 2012, but a location was never found.

In the lawsuit, Coborne said she had an opportunity to sell Butternut Squash to a third-party restaurant owner for $90,000, but declined the offer because of the promises Chapel Hill Foundation made.

In its response, the Foundation said the person identified as the potential buyer denies he made the offer.

The Foundation also denies that Walter Holt — senior property manager for Thomas Linderman Graham, the company that manages the development — harassed and bullied the owners of the restaurant, contrary to Coborne’s claims.

Gordon Merklein, executive director of real estate development for the Chapel Hill Foundation, and University representatives refused to comment on the case.

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