GILROY
– With a business license for a new Monterey Street furniture
store finally in hand, lawyers for controversial 5-Day Furniture
are holding another document they’re not as pleased about – a
lawsuit.
GILROY – With a business license for a new Monterey Street furniture store finally in hand, lawyers for controversial 5-Day Furniture are holding another document they’re not as pleased about – a lawsuit.
Owner Hai Tran said his company is being sued by the landlord of his 5-Day Furniture store at Luchessa Avenue after inquiring about breaking his 10-year lease.
According to Tran, the Pebble Beach-based landlord, Leland Evans, is demanding 5-Day Furniture remain true to the lease or pay an eight-digit dollar amount.
Tran said he may need to stop leasing the 500 E. Luchessa Ave. site site since 5-Day may not be allowed to run a retail operation there beyond a 12-day-per-year limit imposed by the city. When he sent the landlord a memo stating as much, Tran triggered the legal reaction.
“I sent them the note asking for help, and a few days later my lawyers says I’m being sued,” Tran said.
The lawsuit represents yet another major business hurdle for the Vietnamese immigrant since beginning his furniture store venture in Gilroy roughly one year ago.
For several months, 5-Day battled the city over the amount of retail sales the store could do out of the Luchessa site. The Luchessa building is in an industrial zone which restricts retail operations to an “ancillary” level.
Tran claimed the city told him ancillary meant he could use 25 percent of his 162,000-square-foot warehouse for retail. The city claimed 5-Day’s weekly and sometimes daily blowout sales were hardly in line with the wholesale guidelines for the area.
Just weeks ago, a judge ruled in favor of the city.
As for the new retail store at Tenth and Monterey streets, things are looking up for Tran. The city has signed off on his business license, and he has taken a dilapidated corner building and refurbished it with new paint, windows, a loading ramp, landscaping and a fire sprinkler system. Most of the work has been done at Tran’s expense.
Perhaps no one is happier about that than Sig Sanchez, the building owner.
“The most that’s ever been done to that building is maybe a paint job 10 or 15 years ago,” Sanchez said. “People are raving about what’s been done.”
City Council last month approved a zoning law that more clearly states how much retail in relation to wholesale can be done in the area. The guidelines also give Council discretion to approve some projects that don’t fall completely in line with the zoning law. Tran has applied for a Conditional Use Permit under that provision, but has yet to receive approval and will likely not have his case heard until November.
“I’m still hoping for the (Conditional Use Permit), but I don’t know what’s going to happen with it,” Tran said.
The memo to his landlord was sent in the event the permit would not go through. However, Tran’s desire to back out of the lease raises doubts about his intention to operate primarily as a wholesale business in the Luchessa building.
Tran says the wholesale operation at Luchessa without the retail component does not fit the 5-Day business model. He prefers to operate a retail business out of Gilroy (at Tenth and Monterey streets) and keep his wholesale operation in San Jose.
“I have to make plans based on what’s best for my business and my employees. I feel obligated to get my employees out of this mess,” Tran said.
Regardless of Tran’s intentions, questions linger about the city’s consistency with enforcing the wholesale-retail guidelines in the Luchessa Avenue and Chestnut Street areas.
Several businesses in the area operate primarily on a retail basis and even Gilroy’s economic development director, Bill Lindsteadt, says 5-Day “fit into the overall picture of the area.”
“It’s the way businesses are operating today,” Lindsteadt said.
For the city, there’s a difference between 5-Day selling to regular retail customers and a lumber or granite yard, for instance, that sells to contractors who will resell the product or use it as part of a finished product they will sell.
For Tran, the argument is baseless considering there is a business nearby that sells discounted mattresses.
“I don’t want to be in a mode where I’m fighting all the time,” Tran said. “I just want to call it a day, open my new store and have a nice life.”
