Shy Ordered to Pay $14 Million in 6th & Spring Case

By Eric Richardson
Published: Friday, November 13, 2009, at 12:13PM

Mercury Liquors Eric Richardson [Flickr]

This February file photo shows the disputed space at 6th and Spring that was to be the site of Mercury Liquors.

DOWNTOWN LOS ANGELES — Controversial developer Barry Shy was ordered to pay over $14 million to restaurateur Andrew Meieran this week, as an appeals court reversed a lower court ruling that had reduced that amount to just $2 million.

The case centers around Mercury Liquors, a basement bar that Meieran had planned to open at the corner of 6th and Spring. Shy's residential conversion of the building above damaged the space, and the two have been in court for the last two years.

Mercury Liquors was to be the first of Downtown's bank vault bars. Set in the basement of the 1910 Los Angeles Trust & Savings Bank building at 6th & Spring, the bar by Edison creators Andrew Meieran and Marc Smith was often reported in 2005 and 2006 as being just months away.

Meieran had bought the 14-story building in 2000, but sold it to Shy in 2005 for $13 million. Meieran kept the rights to the ground-floor corner and basement bar space, while Shy began work on a residential conversion.

That work created water damage and mold in the bar space and rust on the vault doors, several of which were blocked by walls put in for seismic support.

The $14.5 million in damages and attorneys' fees was awarded in November of 2007, but was reduced by the trial court judge, who ruled that lost profits and business value had been improperly awarded.

On Tuesday, that decision was reversed by a three-judge panel from the state Court of Appeals, 2nd Division.

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Comments

1
nanorich writes:

http://nelsonhaha.com/

# on Nov.13.2009 AT 07:13 PM
2
Ginny-Marie Case writes:

I guess this might be a bad time to mention I've been having a difficult time getting our deposit back from SB Manhattan.

# on Nov.13.2009 AT 08:33 PM
3
Ryan writes:

Ginny - I had the same problem. Considering that this is a company that fraudulently charged back utilities a few months ago for a cash infusion, the best thing to do is remind them that after 4 weeks you can can sue for your twice your deposit for bad faith retention.

http://www.caltenantlaw.com/Deposit.htm

# on Nov.13.2009 AT 09:56 PM
4
Sam writes:

Ryan, get your facts straight about the utilities. They use a utility billing company that was mistakenly charging tenants very low utility bills for over a year. The utility company realized their mistake and made the corrections on the bills. When Shy received many complaints regarding the retro active bills, he ate all the costs and refunded the tenants. I don't know any other property management companies that would pay for your utilities.

# on Nov.14.2009 AT 05:34 PM
5
Ryan writes:

Hi Sam - I assume you work at in the leasing office. This brings up a question that sort of makes the whole thing moot: where is my refund check?

# on Nov.14.2009 AT 09:21 PM
6
scared writes:

I think Ive asked before, but is there any way to find out if our buildings are safe? Passed all inspections? I live in one of the newer ones, and after reading all the things about said owner, Im terrified of a earthquake.
Surely they couldnt open a building without the city inspections right?! I really like my place but hope it doesnt come tumbling down on me......

# on Nov.15.2009 AT 12:39 AM
7
Alex Brideau III writes:

scared: Code inspections for most City of LA apartment buildings are typically handled by the Los Angeles Housing Department. However, I've heard that "loft" apartments (not sure what defines a loft according to the City though) are inspected by the LA Department of Building and Safety.

# on Nov.15.2009 AT 01:27 AM
8
Oscar writes:

if there is an 8.0 or higher we are ALL going down, just pray to GOD that it doesn't get you in downtown or sleeping...

But then we'll all (alive) be friends....

# on Nov.15.2009 AT 10:37 AM
9
David writes:

Alex Brideau II: First off, the Department of Building & Safety issues the building permits even if it is an apartment/residential condo building. The Housing Department only does the future code compliance inspections but if the Housing Department finds a problem, they direct the owner to go to Building & Safety to get the proper permit to correct the problem.

Secondly, there is no definition of a "loft" building in the City of L.A. I think you are thinking of "live/work" buildings (which used to be called "artist-in-residence" but that label was replaced with the "live/work" one), which many of Shy's buildings are.

According to the City's definition, a live/work unit is 2/3 commercial space, 1/3 residential space and to live in the space, you are supposed to have a business license. This whole definition is a bit of joke since so few people actually have business licenses and the City doesn't really enforce this provision.

scared: Your building won't fall over in an earthquake. Think of how many earthquakes the building has already survived. To answer your specific question - Yes, the building passed all of its inspections. The City will not issue a Certificate of Occupancy until the building passes all inspections.

# on Nov.16.2009 AT 05:56 PM
10
suk writes:

Sam is lying about the utility situation. It was pure fraud and exploitation.

In addition, the attempt to back-bill was illegal, so it's kinda funny that he would chalk up the scuttling to BS' eternal generosity.

Propaganda!

# on Nov.18.2009 AT 05:32 PM
11
cancer writes:

investigate asbestos abatement in the higgins building.

# on Nov.18.2009 AT 07:12 PM
12
Ginny-Marie Case writes:

Magic! The Deposit has been returned!

# on Nov.19.2009 AT 01:38 PM
13
scared writes:

Thanks, I know these old buildings have seen it all...but I suppose with what everyone says about BS cutting corners and what not, it started to make me nervous since I only found out about this guy recently....I really like my building and thought it was nice..but you never know!

# on Nov.19.2009 AT 05:50 PM

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