By Matthew Santoni

Law360 (July 1, 2020, 3:07 PM EDT) -- The landlord for a historic office building in downtown Pittsburgh is demanding that a restaurant pay its back rent plus other damages related to breaking its lease when it permanently closed because of the COVID-19 pandemic, according to a lawsuit filed in Pennsylvania state court.

DIV 501 Grant LLC, which runs the recently renovated Union Trust Building, says that Union Standard broke its lease when chef and owner Derek Stevens announced in early June that it would not reopen after being closed since mid-March under state orders to reduce the spread of the coronavirus. The restaurant had missed its last three rent payments and did not reopen when the state allowed in-person dining to resume, according to the suit filed Tuesday.

"During at least a portion of the time between March 16, 2020 and June 1, 2020, tenant was open for take-out business," the complaint said. "Nevertheless, despite partially operating and generating some revenue, tenant failed to pay the rent due on April 1, 2020, May 1, 2020, and June 1, 2020."

The landlord seeks payment of about $72,000 in back rent, plus additional damages for income lost on the lease, which was supposed to run through 2027, according to the suit.

Union Standard, which was Stevens' first independent venture after he'd established himself with Pittsburgh's Big Burrito restaurant group, opened in one of the prominent corners of the office building in 2017. The landmark building, commissioned by industrialist Henry Clay Frick, is home to the Pittsburgh offices of several prominent law firms, including Blank Rome LLP, Pepper Hamilton LLP and Buchanan Ingersoll & Rooney PC.

The coronavirus caused the state to order the closure of all "non-life-sustaining" businesses in mid-March, though restaurants were allowed to continue carryout and delivery service.

The landlord says the state loosened its restrictions and allowed restaurants to resume dining room service May 29, and a June 1 Facebook post for Union Standard said it was still working to "menu test, train staff, and put all proper procedures in place" for reopening. But days later, the restaurant announced it would stay closed.

"In the first week of June of 2020, tenant informed landlord that it intended to cease operations entirely and close permanently," the complaint said. "Since informing … of its intention to close permanently, tenant has not opened or operated the restaurant at all. The lease does not permit tenant to cease operations."

Stevens, along with developers Robert Glimcher of Glimcher Group Inc. and Chuck Hammel of Pitt Ohio Express, had guaranteed the lease, and as a result they were also responsible for any back rent and other damages, the suit says.

Union Standard's closure leaves two prominent vacancies on the ground floor of the Union Trust Building, after Del Frisco's Double Eagle Steakhouse allegedly broke its lease and its promise to open a branch of the steakhouse chain in Pittsburgh after it was bought out by Landry's LLC. The landlord filed a separate suit against Del Frisco's in May.

An attorney for DIV 501 Grant declined to comment Tuesday. Representatives of Union Standard, Stevens, Glimcher and Hammel did not immediately respond to requests for comment.

DIV 501 Grant is represented by Eric M. Spada of Buchanan Ingersoll & Rooney PC.

Counsel information for the restaurant and other defendants is not immediately available.

The case is DIV 501 Grant LLC v. Downtown Arcade LLC, doing business as The Union Standard et al., case number GD-20-007278, in the Court of Common Pleas for Allegheny County, Pennsylvania.

--Editing by Abbie Sarfo.

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