Iron Hill Brewery sues Rehoboth Beach landlord for $466,948 in unpaid building repairs

Iron Hill Brewery has sued its Rehoboth Beach landlord for reimbursement of more than $466,900 in construction costs to the Del. 1 restaurant that opened last May.

The Wilmington-based chain says it has spent more than $1 million in improvements to the Sussex County building it's leasing and has only been paid a portion of the total amount owed, according to a lawsuit filed in Superior Court.

The building at 19815 Coastal Highway (Del. 1) is owned by Coastal Station LLC, a Delaware limited liability company whose registered agent is Bariglio Acquisition Co. in Wilmington. 

"We’re working to resolve the issue and are confident this matter will be resolved in the near future," Iron Hill officials said, in a statement to The News Journal.

Coastal Station could not be immediately reached for comment.

According to the lawsuit, on or about May 10, 2017, Iron Hill entered into a 15-
year lease for a rental unit in the Coastal Station shopping center in Rehoboth Beach.

The lawsuit states that when the lease was signed, the rental unit was in need of significant improvements before Iron Hill could occupy and operate it as a restaurant.

The landlord agreed to pay Iron Hill for out-of-pocket labor and material costs up to $1.65 million according to the suit, and said it would repay the restaurant company in three installments.

Iron Hill opened for business around May 24, 2018. In the lawsuit, it says that it made improvements that were the responsibility of the landlord under the lease. that included constructing demising walls that separate one space from another, insulating walls and installing drywall, plumbing work, installing a stone under a slab, kitchen repairs, and installation of sidewalk concrete.

Although a landlord typically provides the concrete slab
floor and a storefront, according to the lawsuit, the parties agreed Iron Hill would install those two items to its own specifications, and the landlord would provide a monetary credit for the amount it would have spent on these items.

Iron Hill says it spent a total of $1,016,171.30 at the site. The landlord paid $549,223.20 on Oct. 8, 2018, but the remaining $466,948.10 has not been paid, despite repeated demands for the money, according to the suit.

Iron Hill says the landlord’s failure to pay the total amount owed to them is a breach
of the lease. They're asking the court to force the landlord to pay the amount owed as well as incurred legal fees.

Iron Hill Brewery & Restaurant operates 16 restaurants in Pennsylvania, New Jersey and South Carolina, including its flagship operation in Newark that opened in 1996, and an eatery on the Wilmington Riverfront. It's named for a Revolutionary War battle that was fought outside of Newark. 

More Delaware food news

At last! Iron Hill offers new craft beer option at the beach

New restaurants: Hot bagels, burritos, Filipino cuisine on the plate for 2019

New vegan restaurant coming to Wilmington's Little Italy

Contact Patricia Talorico at (302) 324-2861 or ptalorico@delawareonline.com and on Twitter @pattytalorico