Shirokiya, the department store turned food court, may never reopen at Ala Moana Center after its leases were revoked in January and it became embroiled in a legal feud with the mall over unpaid rent, unfulfilled investment promises and locked-up wine.
Publicly, Shirokiya has said that the closure of the Japanese Village Walk and adjacent Vintage Cave restaurant is due to the COVID-19 pandemic. The company previously gave a tentative reopening date in April, saying on its website that the closure was temporary until it could change its business concept or the pandemic ends.
But court records tell a different story.
Ala Moana Anchor Acquisition LLC, the company that runs Ala Moana and is owned by Chicago-based Brookfield Properties, sued Shirokiya Holdings Inc. in January for $8 million in overdue rent. Shirokiya countersued Ala Moana for $110 million. Shirokiya says it invested $50 million to move from its old location across from Macy’s to the Japan Village Walk and is also seeking $60 million in lost future profits.
Ala Moana locked Shirokiya out of its Japan Village Walk and Vintage Cave locations in late 2020.
The mall is auctioning office supplies, dining room tables, chairs, fine china, chandeliers and statues of the Greek goddess Demeter that once filled the Vintage Cave Cafe. Ala Moana also removed Shirokiya from its website.
The decision to end Shirokiya’s lease was difficult, Ala Moana’s legal team writes in court documents. But it was necessary because of “Shirokiya’s unwillingness to meaningfully communicate, enter into a plan, return to the premises or even pay partial rent.”
Shirokiya’s legal team argues that Ala Moana wrongfully terminated its lease.
Rika Jones, the chief financial officer for Shirokiya Holdings Inc., declined to discuss the company’s future, citing the ongoing lawsuit.
Representatives for Ala Moana didn’t respond to messages seeking comment. Attorneys for Ala Moana and Shirokiya didn’t return calls Friday.
Lawyers for Ala Moana and Shirokiya are scheduled to appear in court Monday to sort out ownership of more than $200,000 worth of wine on the premises of Vintage Cave.
In May 2020, Derek Kobayashi wrote to Shirokiya on behalf of Ala Moana Center asking that the company pay about $900,000 in pre-COVID-19 rent for its three leases, the Japan Village Walk, Vintage Cave Cafe and the Vintage Cave Honolulu restaurant.
Ala Moana was willing to “pursue a resolution” that would allow Shirokiya to continue operating and keep its leases as long as the company paid the rent by June 12, Kobayashi wrote in a letter submitted as part of the court record.
A day before the rent was due, Shirokiya’s attorney Shaun Mukai wrote back, saying business was hampered by the pandemic. He noted that Shirokiya had invested a significant amount to move.
“Unfortunately, Shirokiya has not been able to reap the benefits of its sizable investments,” Mukai wrote.
He said Shirokiya had no immediate plans to reopen, that it already had begun exploring other options, and that it would appreciate “the opportunity and courtesy to work out a graceful exit with Ala Moana” if it were unable to reopen at all.
By July, Ala Moana was getting impatient. Kobayashi sent another letter informing Shirokiya that the unpaid rent had ballooned to more than $3 million for the three leases. Ala Moana demanded payment in 10 days.
Ten days later, Mukai said that the company considered reopening options but decided it wasn’t feasible given the rising number of COVID-19 cases. Mukai said the company was in the early stages of negotiating with new investors in Japan, and asked for Ala Moana to wait until September for updates.
In November, Ala Moana changed the locks on the Vintage Cave and Japan Village Walk and told Shirokiya that it was taking control of the premises.
In correspondence with the mall, Shirokiya’s lawyers denied that the company was in default of its leases and said it was still pursuing new financing in Japan and that it had begun talks with at least one unnamed company.
Shirokiya promised to outline a plan for Ala Moana in December, but no plan materialized, according to Kobayashi’s letters.
“Tenant was still unable to provide (Ala Moana) with any clear intention as to the premises or as to addressing the amounts due and owing to the landlord,” Kobayashi wrote in a letter in December.
The mall ended Shirokiya’s lease Jan. 15 and filed a lawsuit to reclaim unpaid rent the same day.
Shirokiya claims in court filings that it’s being treated unfairly.
It first opened in Ala Moana in 1959 and moved to its previous location as part of a mall expansion in 1966, the Honolulu Advertiser reported at the time.
For 50 years, Shirokiya operated as a department store, selling jewelry, clothes, kimonos, dishware and electronic equipment. A food court on the second floor offered groceries and bentos.
The company says it took a “leap of faith” in 2016 when it left its previous location to become an anchor tenant in the mall’s new Ewa Wing near the former site of the ground floor of Sears.
Shirokiya says Japan Village Walk started leaking during heavy rains in 2018 and that Ala Moana never made repairs. The company also claims that the mall hurried to end its lease earlier this year to make way for a new tenant.
Lawyers for the company wrote that Ala Moana’s “mismanagement and empty promises threatened Shirokiya’s new business model as the anchor tenant for Japan Village Walk with its shops and food court.”
Ala Moana denied Shirokiya’s allegations.
In exchanges between the lawyers, Shirokiya maintained that it could not open because of government restrictions during the pandemic.
The mall’s lawyers contend in court filings that eateries could open under Honolulu’s guidelines.
“Shirokiya could have but did not conduct business on a carry out basis and did not resume dine-in services as permitted,” Kobayashi wrote.
The mall’s attorneys also claim that Shirokiya acted in bad faith when it asked for more time to put together a payment plan while also exploring new Vintage Cave locations in New York and Tokyo.
Ala Moana’s legal team has further argued that if Shirokiya believed it could not reopen, then it should have surrendered its lease.
Now, Ala Moana and Shirokiya are arguing about wine.
When the mall locked Shirokiya out of its restaurants, lawyers for the company raised concerns over wine stored in the Vintage Cave.
Ala Moana asked the court in June for permission to take possession of the wine. It wants to sell the wine to recoup some of Shirokiya’s rent.
Shirokiya says that the wine doesn’t belong to the company but to members in the Vintage Cave Club.
Club members would deposit $5,000 that could be used to pay for food and beverages at the Vintage Cave. In exchange, the members would get benefits, including the use of lockers to store bottles of wine they purchased from the restaurant.
Shirokiya says it should be allowed to hold the wine for its members, and produced receipts showing renewed liquor permits from the Honolulu Liquor Commission.
But Ala Moana countered, saying taking the wine is legal because it amounts to a lien.
A judge is being asked to sort out the dispute at a hearing scheduled for Monday morning.
Kazuyo Souza, a Honolulu tax preparer, is one of Vintage Cave Club’s members. She said that she is unable to get into the restaurant to take back her wine. She’s confused over how Ala Moana can claim it belongs to them now.
“That’s our personal property,” Souza said. “That’s not Vintage Cave’s. I don’t know why they aren’t letting us take our own personal stuff.”
Souza said she owns several thousand dollars worth of wine in a locker at the restaurant. She says other members have a lot more.
Court records show that 130 of the club’s members have a combined total of $200,437 worth of wine stored in the Vintage Cave. The most expensive bottle on the list is a 2010 Screaming Eagle valued at $11,000.
“It’s going to be a huge loss to everybody,” Souza said.
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