Eatery sues after mold infestation

The complaint alleges Petrakis and her team suffered not only loss of income but reputational damage from the incident and requested a jury trial. The city red-tagged the building in October after receiving positive results for mold contamination, forcing its closure, which the complaint says occurred abruptly and without warning on a Friday evening around 7 p.m. 

“When you devote 30 years to your craft, and you have a hard stop like we did on Oct. 11 that was absolutely avoidable, my heart was completely broken,” Petrakis said. “To try to pick up and start over and rebuild that space or anywhere close to that space would be in the millions and millions of dollars, so I really am stuck between a rock and hard place.”

The banquet hall had also planned to host a 275-person memorial service the next day, and the business also lost about $55,000 alone in event deposits from October to the end of December, she added.

The city leased the restaurant to Petrakis in 2019, and not long after, restaurant staff noticed water pooling in the banquet room, and despite an initial investigation, the city didn’t follow up on the source of the problem, the complaint alleges. But that was far from the first time staff noticed water leakage, Petrakis said. While she had only been operating the restaurant since 2019, some employees had worked in the building long before she joined and had noticed similar issues. One server, who first started working there as a dishwasher 25 years ago, told Petrakis he was often accused of not cleaning the bathrooms because the odor was so bad. 

“The building was almost brand new when he got there. There was a constant smell of sewage coming up from the drains, and they kept asking him to pour bleach down them,” she said. “I’d also heard things from other employees regarding water intrusions way before I got there, and there were times the city said ‘we don’t have the money to fix this.’”  

David Hollenberg, an attorney representing Petrakis, said the closure was completely preventable.

“Alicia made it very clear to city employees, and specifically Parks and Recreation employees, that there are issues ongoing unrelated to anything she was doing inside the restaurant,” Hollenberg said. “The only entity that could deal with them was the city, and they repeatedly told Alicia that there is nothing wrong or they couldn’t do anything or it was [her fault].”

The city also rescinded its original offer to compensate more than $300,000 for loss of income while the city repaired the building, adding they would not be responsible for the necessary repairs — despite not knowing where the damage was coming from, Petrakis said. According to the complaint, the lease states the tenant, Petrakis, would be responsible for maintenance-related issues but not structural damage. 

“Floor maintenance is if my chair scratches the hardwood floor or there are cracked tiles … anything below the floors or behind the walls is the city’s responsibility,” she said. “Not once in the 5 ½  years I was there did the city ask me to fix something I was doing wrong, other than fixing some string lights they thought were hanging too low one time.”

The restaurant and banquet hall remain closed, with no clear timeline on when the repairs will be completed. 

The city declined to comment on the complaint “as this is a pending litigation matter, and the city has not yet been formally served,” City Attorney Prasanna Rasiah said in an emailed statement, adding they will “respond appropriately through the legal process.” 

The city has 30 days to file a responsive pleading once served with the complaint. 

alyse@smdailyjournal.com

(650) 344-5200 ext. 102