For the second time this year, the city of South Bend is taking legal action against a company over claims they didn’t live up to their side of a business deal.
On Thursday the South Bend Redevelopment Commission unanimously voted to issue a letter of default to the Granger-based Bare Hands Brewery saying the restaurant has not lived up to its promise to build a brewery on the south side of downtown.
In 2016, the city sold the property to Bare Hands for just $1 with the stipulation that the local company would open a brewpub on the site of the former Gates Service Center building within walking distance of Four Winds Field. The brewery was also required to invest a certain amount of dollars into the site.
By moving to file a default notice, redevelopment commissioners hope to regain ownership of the property. According to South Bend’s Director of Community Investment Caleb Bauer, Bare Hands has 30 days to return the deed to the property. If the restaurant doesn't return the deed, the issue could again go to court.
“This is simply about the commitments made to the commission and seeking to make sure they’re met,” said Bauer. “I think everybody’s excited about what Bare Hands was proposing here, but after seven years if we’re not seeing that come to fruition and there's not a path to see it come to fruition, I think it’s appropriate for the redevelopment commission to consider other opportunities for the site.”
Thursday’s vote is the latest step in the saga over the property, though it’s not even the first time the city has taken legal action against Bare Hands.
The eatery was originally supposed to open five years ago, but that never materialized and the redevelopment commission sued Bare Hands in 2018. After a round of litigation, the city dropped the suit in early 2020 and gave a new deadline of 2022 for the restaurant to open.
But that deadline was pushed back yet again due to COVID until Sept. 1 of this year. But as of Thursday, two weeks later, there is no brewery at that location. All told, Bauer said the agreement with Bare hands was amended seven times with later deadlines and often with less required capital investments.
Bare Hands owner Chris Gerard was not at Thursday’s meeting and representatives from the brewery did not return a request for comment from WVPE. The company's website still advertises the opening of the South Bend taproom on Sept. 1. Bauer said Bare Hands did some plumbing and electrical work on the interior of the building and that money can be reimbursed by the city.
Redevelopment commission member Eli Wax has his office near the Gates Service building and said he’s eager to see the area finally get renovated. He and other commission members noted the property is much more desirable than it was nearly a decade ago given theslew of developmentscoming to the south side of downtown.
“There’s a lot of really exciting development that’s coming within these four blocks,” Wax said. “This project was something I was hoping would be part of it. If that’s going to happen in the long term, I’m sure there will be some other exciting development to take place there.”
Thursday’s action marks the second time this year the redevelopment commission has moved forward with legal action against a downtown business.
In January, the city sued developer Dave Matthews for failing to install a grocery store and pharmacy into his high-rise apartment building at 300 East Lasalle Avenue. In that case, the city seeks $7.5 million for Matthews allegedly failing to follow through on his agreement. Matthews filed a motion to dismiss the suit earlier this year and a judge has yet to rule on whether or not the case will proceed.
Bauer said the two recent instances where the commission has taken legal action don’t reflect a change in attitude from the city. Instead, he said, the Bare Hands saga shows both the city’s willingness to work with developers when circumstances allow, but also the willingness to hold businesses accountable.
“We make adjustments and we work with developers to make sure we can see a project move forward successfully,” Bauer said. “What we can’t tolerate are projects that are not meeting the terms and expectations laid out as part of the original agreement.”
