enlo Park motorists who already are frustrated by traffic congestion near the Menlo Avenue/University Drive intersection may be in for a bit more frustration if a nasty little landlord-tenant dispute involving the family-owned Draeger's market isn't settled soon.
That's because Draeger's, already served with an eviction notice on the approximately 7,000-square-foot parcel it uses for a delivery dock, among other things, may be forced to vacate that parcel and create a new dock on Menlo Avenue, near the busy intersection. That is, if the city allows such a potentially traffic-stopping change to the market's physical plant.
Whether or not the city gets involved, the dispute between Draeger's and its landlords pits two families long-established in the community against each other, and threatens to disrupt operations at one of the city's most popular businesses, founded by Frank Draeger in 1955 and operated ever since by the Draeger family.
And the conflict may end up in court if the property owners follow up their eviction notice, which ordered the Draegers off the property by December 30, 2000, and file an unlawful detainer against the business owners.
Rent increase
The dispute arose during negotiations between the landlords, Charles Troglio and Gloria Walker, and the Draegers, whose family has leased the parcel from the Troglio family since 1955. Mr. Troglio and Mrs. Walker are the children of the original owners, now deceased, who leased the property to the Draegers; until shortly before 1955, the family lived in a house on the property.
Since the first, 25-year lease on the property expired in 1980, the family has leased the parcel to the Draegers for five-year periods, with no option. Although past lease agreements seem to have been negotiated smoothly by attorneys for the Troglio and Draeger families, a large rent increase proposed last year appears to have ended the smooth sailing.
Rent on the property was $5,000 per month when the lease expired on September 30, according to attorney Joe Carcione, who has represented the Troglio/Walker families since November. Under the terms of a new five-year lease proposal that appeared headed for an agreement in early December, the monthly rent was to be boosted to $11,500 the first year, a 130 percent increase. The rate was to rise incrementally during the subsequent years to reach $17,500 or $18,000 during the last year, Mr. Carcione said.
He said the rate increase was based on an appraisal done last year.
But that lease was not signed. Terms agreed upon in early December were removed from the table by the Draegers, according to a letter from their attorney, and Mr. Carcione blames interference by the city for the last-minute breakdown of the agreement.
Richard Draeger, vice president of the family business, could not be reached for comment for this story.
Carol Dillon, attorney for the Draegers, said early this week that "the Draeger family thinks it is inappropriate to try to negotiate (the lease) through the newspaper." She added, however, that she is "hopeful we will reach an agreement with the landlord," and that the Draegers are hoping to finalize that agreement "in the near future."
Eminent domain?
Letters exchanged between Mr. Carcione and Ms. Dillon confirm that the Draegers were prepared in early December to pay the new lease rate of $11,500 a month, although they believed it to be above market rate.
But a comment Mr. Carcione says Ms. Dillon made during a November telephone conversation appears to have cast a long shadow over the prospect of a final agreement. The statement, which Mr. Carcione called "a threat," was that if the two parties couldn't come to an agreement, the Draegers would "go to the city and have (the city) condemn the property," he said.
In a subsequent letter to Mr. Carcione, Ms. Dillon said the statement was "a casual remark by me, made without any prior contact with the city or any idea what the city's response would be to the suggestion."
But Mr. Carcione said the comment sounded an alarm, and his clients wanted to insert a clause in the new agreement stating that the Draegers would not try to have their property taken from them through eminent domain.
Before Mr. Carcione received a response from Ms. Dillon to that new stipulation, communication from Ms. Dillon ceased for at least a week, he said.
Mr. Carcione said that a call to Menlo Park City Attorney Bill McClure convinced him that the city attorney had spoken to representatives of Draeger's. He also was convinced, he said, that the city would consider becoming involved and taking the Troglio/Walker property through eminent domain, then swap it with the Draegers for property the Draegers own in the parking plaza between the market and Santa Cruz Avenue.
But in a strongly worded letter written to both attorneys in early January, Mr. McClure stated, "Let me be very clear that the city of Menlo Park does not presently have any intention of initiating an eminent domain proceeding to acquire the parcel in question."
He also stated that "representatives of the Draegers have not requested that the city ... initiate eminent domain or any other proceedings to acquire the Troglio parcel."
Mr. McClure wrote that the city also has no interest in interfering with negotiations or taking sides. "The city's sole desire is to see this matter resolved in a mutually satisfactory manner that will have the least impact on the city ... including the traffic circulation and parking in the vicinity of the Draeger's store."
Earlier this week, Mr. McClure echoed those sentiments: "The city has not taken a position. The city doesn't want to take a position. The city doesn't want to get involved."
But Mr. McClure added that the city was drawn into the matter peripherally when, as negotiations between the two parties deteriorated late last year, Draeger's representatives approached the city about taking out a permit to put doors on the Menlo Avenue side of their market to accept deliveries. He said the city at that time made it clear that deliveries on Menlo Avenue would not be a desireable solution.
In his letter to the two attorneys earlier this month, Mr. McClure indicated that the city might reluctantly become involved as a last-ditch measure. If the two parties cannot reach an agreement, "and it is determined by the city that other alternatives for deliveries to the Draeger's store, garbage disposal, etc., are not viable/acceptable, then the city may have no choice but to consider its options, which may include contemplating the potential acquisition of the Troglio parcel."
Mr. McClure said later that the city would have no choice but to intervene if a stalemate between the landlord and tenant had a significant impact on traffic circulation. "The city would have to address that ... unless Draeger's were to close its doors."
Mr. Carcione said he believes the city's acknowledgement that it might get involved if there is no agreement doomed the negotiations. If the Draegers believe the city will intervene and take the land for the business' use, they have no incentive to negotiate with the property owners, he said.
"I am absolutely convinced that the city of Menlo Park's intervention into the relationship between the Troglio/Walker families and the Draegers has caused my inability to negotiate a lease to this point," he wrote in a January 12 letter to Mr. McClure.
Mr. Carcione said he was trying to arrange a negotiation session with a mediator, and he sent a letter proposing such a meeting to Ms. Dillon on January 11. He also proposed that both parties sign a confidentiality agreement about the negotiations after an earlier proposal to have negotiations recorded was rejected by Ms. Dillon.
As of last Friday, Ms. Dillon had not responded to the proposal, Mr. Carcione said.
