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Recipe for an empty storefront

Accounts diverge on events leading up to Placer Market lockout

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Downtown Businesses
Kristie Case walks her dogs, Kammi, center, and Greta, in front of the recently vacated Placer Market & Bakery, Thursday afternoon in the Downtown Walking Mall.

The corner windows of the Placer Market and Bakery are big enough to reveal the spacious emptiness inside — the bare shelves and unused oven and fliers advertising now-irrelevant baked good prices.

The documents filed in district court relate different accounts of the events leading to the vacant storefront in the heart of downtown Helena, but the parties involved can agree on at least one fact: On Jan. 12, the Placer Downtown, LLC, locked the bakery out of its premises after terminating its lease. According to the complaint the bakery owners filed two days later, this action was “intended to cause the bakery to fail, or to gain leverage to force unpermitted (l)ease modifications upon the Bakery.” But according to the Placer Downtown, LLC’s, response filed last week, it was the result of the bakery’s failure to comply with the lease on several fronts.

Both documents address strains in the relationship between Placer Downtown, LLC, members Karina Christensen and Rick Miller and their counterpart Blair Williams, who’s in charge of marketing for the bakery, which her husband, Jim Hanson, co-owns and operated. However, the business partners’ accounts of why things went awry differ as well.

The Placer Downtown, LLC, was created in 2008 with three members: Christensen, Miller and Williams. The limited liability company owns the common and commercial areas in the historic Placer building on the walking mall. Last March, the Placer Downtown, LLC, entered into a lease agreement with Hanson and the Placer Market and Bakery, LLC. The bakery opened for business in July.

The complaint Williams filed contends that after the lease was signed, the Placer “continually sought to renegotiate certain provisions,” asking the bakery to sub-meter its power use and set aside money in an escrow account. The Placer’s counterclaims state that Jim Tucker, a member of the Bakery LLC, had agreed to set aside funds in escrow for plumbing issues.

At the beginning of September, the Placer informed the bakery that it was in violation of its lease because a plumber had caused a lien — a legal claim on property — to be placed on the premises.

Williams’ complaint states that the bakery immediately tried to fix the problem, but that it was “not a circumstance that could be reasonably cured within thirty days due to the amount of money required and the plumber’s resistance to any sort of negotiated resolution.” Regardless, it goes on to say, a lien release was obtained on Dec. 17, 2010. The Placer denies those claims and adds that the bakery hadn’t paid for all the electricity, natural gas and additional utilities in its suite and encroached on space outside its lease agreement during remodeling, never correcting the issue.

And so came the Jan. 12 lockout. Hanson said in an interview that it happened so abruptly that he had little time to inform the wholesale customers, like restaurants, who relied on his bakery products that he wouldn’t be able to provide the service for them. He and Williams said they were allowed back into the space once to clear out perishable items.

The bakery’s complaint alleges that the Placer actions “took unauthorized control over the property, resulting in damages.” But Christensen and Miller’s claims contend that the bakery’s lease agreement breach caused damages to the Placer Downtown, LLC, in the first place.

On top of that, Williams’ complaint holds several other allegations related to the conduct of the Placer Downtown, LLC, and Christensen in particular. The bakery’s lawyer, Pat Fox, said aggregating various counts into one lawsuit is common practice for judicial efficiency reasons.

Williams’ complaint states that early last year, communication between her and Christensen flagged, and she was “shut out of all aspects of the operation of the Placer,” failing to receive copies of financial documents or only receiving incomplete information. It goes on to allege that Christensen went beyond her authority as managing member of the Placer Downtown, LLC, and made decisions Williams objected to.

“Upon knowledge and belief, Blair (Williams) asserts that Rick (Miller) acted in concert with Karina (Christensen) and the aggregate effect of the isolation and harassment by Karina and Rick was part of a scheme to force Blair out of the Placer (LLC),” the complaint states.

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Additionally, the document says Williams has failed to receive her share of commissions from condo sales since the beginning of last year.

Christensen and Miller’s counterclaims deny all of Williams’ accounts about the Downtown Placer, LLC, and state that Williams has failed to participate in the company’s business and attend its meetings, that she converted a $4,234 IRS check for personal use without authorization from the company, and used property belonging to the company for her own purposes.

“We believe they’re referring to Adirondack chairs,” Fox said of the property claim. “But they are owned by Jim and Blair personally and were being used out on the walking mall premises.”

Fox also questioned why the Placer noted the check, saying it was meant to go to Williams.

In addition, Williams’ complaint stated that the Placer’s termination of the bakery’s lease was objectionable because it was made without a meeting and vote by all three LLC members. The Placer’s counterclaim says Williams “agreed to the meeting then chose not to attend the meeting.”

Christensen and the Placer’s attorney, Craig Charlton, did not want to discuss the details of the case because of the pending lawsuit. Williams, Hanson and Fox spoke of the incidents on a limited basis. Scheduling for the case is slated to take place at the end of this week, and attorneys from both sides acknowledge it will likely be at least a year before it goes to trial.

The Placer incident is not the first financial or legal dispute Williams has been involved with in Helena. In 2006, the Kay McKenna Youth Foundation brought a suit against her, saying that Big Fish PR, the company she owned at the time, had billed the foundation and was paid $5,025 for services that were never approved by its board. Williams denied the claims and attempted to appeal the justice court judgment on the matter, but the District Court dismissed it.

As for recent business, Hanson said the bakery had been making it, despite the cold winter weather, and was gearing up for heavy traffic in the summer. The shop was not without its financial problems, however. Kleen King, Inc., filed a complaint in October stating that it was never paid for more than $1,000 of window cleaning and floor maintenance services it completed at the shop in June. Van’s Thriftway has “Placer Market” on the list of entities from which it doesn’t accept checks.

The Placer Condo Association itself also filed a complaint last fall, stating that Williams and Hanson hadn’t paid several months of dues for three units they own in the Placer, on top of five to eight months of unpaid electrical bills and late fees, together totaling $3,548.65. The case is pending.

Williams admitted in an interview that with the bakery closed, the business itself doesn’t have money to spend. But with inquiring calls coming in on a regular basis, the couple wants to make one thing clear.

“People are assuming the bakery failed and it did not,” Hanson said.

Reporter Allison Maier:

447-4075 or allison.maier

@helenair.com

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