– The controversial 5-Day Furniture Warehouse will remain open
to the general public until at least August pending a trial on a
lawsuit the store’s owners filed last week.
GILROY – The controversial 5-Day Furniture Warehouse will remain open to the general public until at least August pending a trial on a lawsuit the store’s owners filed last week.
After a Tuesday hearing, Santa Clara County Superior Court Judge William Elfving stayed the city’s decision that the store must immediately close for sales to the general public save for 12 days a year.
Attorneys said Elfving’s decision is not a reflection on the merits of the case, but will allow the store’s current operations to continue until the case can come to trial before a judge Aug. 4.
The lawsuit does not ask for monetary damages but requests that the city’s decision to limit the store’s retail operations be cast aside.
“I’m delighted the court granted the stay,” said 5-Day attorney Thomas Griffin on Thursday. “It gives us an opportunity to present our issue to the court and pursue the other efforts we’re making through the city to take another look at conditional use and zoning issues.”
Store co-owner Hai Tran told a reporter last week that the store’s lawyers were also considering seeking damages for what Tran considered slanderous comments made by Mayor Tom Springer, but the legal filings do not address that issue.
Springer called Tran’s charges that the city’s decision was affected by Tran’s race “idiotic” and has also made comments about the store’s honesty during City Council hearings.
“It’s clear that Mr. Tran is frustrated – he’s run into a seemingly unfriendly business environment, and I think that’s frustrating to him,” Griffin said. “I think it doesn’t do anyone any good to go there (concerning legal action on slander).
“It’s not what the case is about.”
The city has not filed a formal response to the lawsuit at this point, said Deputy City Attorney Jolie Houston. Each side is expected to file more briefs later this summer.
Springer declined comment on the alleged slander issue Thursday. However, he said a lawsuit against the city would “let the truth come out” about the store.
“It will give us a chance to subpoena every record they’ve got,” he said. “It will show all of the information they’ve got, and let them prove to the courts that their business model in fact exists and let us do the discovery through their whole business structure.”
At issue in the dispute is whether the amount of retail traffic at the 162,000-square-foot store at 500 E. Luchessa Ave. exceeded boundaries the city set for the business. Surrounding it are charges of dishonest intentions, harassment driven by business competitors and allegations that race played a factor in the city’s decision.
City officials allowed for some “ancillary” retail use at the store, which lies in an industrial zoning area where retail is supposed to be limited. But spurred by “anonymous” complaints, they later determined the store was functioning primarily as a retail business, citing as evidence extensive hours of operation, advertising and local sales figures where retail exceeds wholesale sales.
5-Day attorneys argued that the city did not understand the store’s overall business model, where the Gilroy operation is but a small part of its parent company’s larger China-to-United States furniture wholesaling operation. In that context, retail sales in Gilroy are ancillary to the company’s overall West Coast sales, they said.
The majority of the City Council did not agree and voted 5-2 last week, with Councilmen Charlie Morales and Peter Arellano dissenting, to implement findings that the store violated the terms of its business license and must immediately close for sales to the general public except for 12 days a year.
After the hearing Tran said he believed he was misled by the city on his permits and thought his status as a minority affected the Council’s decision, as did complaints from competitor Rosso’s Furniture, which is owned by Gilroy schools trustee Jaime Rosso.
The Rossos have said they don’t reject competition but want all businesses to play by the same rules.
Springer – one of the Council’s most vocal critics of the store’s actions – said the decision had nothing to do with competitors’ complaints or race. He has called the store’s overall business model an “afterthought,” citing what he considers major discrepancies between sales estimates that the store provided in city applications and the ones furnished during appeal hearings.
Councilman Roland Velasco also denied the idea that race played a part in the decision.
“I understand Mr. Tran’s emotions are obviously running high,” he said. “I’m sympathetic. I understand he has a business. Unfortunately, the business is not zoned properly. I encourage him to open in an appropriate place and have his business in Gilroy …
“My decision was not based on race. It was based on the facts as they were presented to me.”