CFAH

1525 Pine Street

Prior to closing escrow on his purchase of the iconic Grubstake restaurant at 1525 Pine Street, buyer Nicholas Pigott quietly engaged D-Scheme Studio to draft plans for razing the restaurant and constructing a slender seven-story building on the Polk Gulch site, with 28 small residential units averaging around 400 square feet apiece and 2,000 square feet of retail space fronting Pine.

In a Chronicle article about the pending sale last month, in which the retiring sellers implied having accepted Pigott’s offer in order to avoid selling to a known developer who would raze the Grubstake and build condos, Pigott was quoted as planning to take over the restaurant and “run it as is,” and that “nothing is going to change.”

Pigott has since authorized D-Scheme Studio to act as his agent in order to obtain the necessary permits to pursue the development as outlined above and the required applications have started working their way through Planning.

Comments from Plugged-In Readers

  1. Posted by Tim Bracken

    If Pigott lied about his intentions to the sellers in order to induce them to sell, then even if this wasn’t embodied in the contract itself, they’d still have a valid claim for fraudulent inducement.

    • Posted by John

      … if they’re inclined to do so. After all, they’ve got their money and are retired. There’s no benefit, aside from the preservation of the Grubstake.

      • Posted by Tim Bracken

        …and the principle of standing up to someone who (allegedly) deceived you and is going to tear down the restaurant you love. But I agree that a lawsuit is unlikely here, even if the law is on their side.

        • Posted by sf

          If you want to keep your business, don’t sell it! Or hand it down to your family. How many millions did the sellers earn in this case? I’m just not feeling much sympathy for them.

          • Posted by Sierrajeff

            Or put a restrictive covenant on the land.

          • Posted by John

            The implication of the original article on the sale was that the prior owner took a less lucrative deal on the site with the assurance that Pigott would respect and preserve its history. Pigott lied. Whatever you think about his property rights now, he lied to make his deal

          • Posted by Orland

            “Property rights” is the ultimate oxymoron.

    • Posted by oscar

      not so sure about this. every boilerplate purchase agreement should have a clause that states the purchase agreement embodies the full mutual understanding of the parties and that any oral or other previous agreements are superseded. so unless they put this as a condition (doubtful) in the purchase agreement, i don’t think there is any claim for fraudulent inducement.

      • Posted by Sierrajeff

        fraudulent inducement is an exception to the parol evidence rule in many states, though I confess I don’t recall whether California is one of them.

        • Posted by Bob

          Sorry but this doesn’t satisfy any sort of standard for fraudulent inducement.

          • Posted by Sierrajeff

            I was just stating the law. But if you in fact know the actual details and facts – all the correspondence and communications between Pigott and the sellers, etc. – please do educate us all.

          • Posted by Tim Bracken

            These are the elements for fraudulent inducement in CA:

            (1) The defendant made an intentional misrepresentation or omission.
            (2) The misrepresentation was material to the plaintiff’s decision to enter into a contract.
            (3) The plaintiff reasonably relied on the misrepresentation in entering into the deal.
            (4) The plaintiff suffered some measurable amount of harm.

            If the facts of this story are true, all these elements would be present. “Harm” will be tricky, but it sounds like the sellers took a lower amount of money based on the buyer’s assertion that he’d maintain the restaurant.

          • Posted by Zig

            The harm may have been caused to another buyer who was more forthcoming

          • Posted by SFguy

            Zig – Admittedly, it’s been a few years since I took the California bar, but there is no privity of contract for the third party potential buyer, so even if they did (arguably) suffer damages in that they should have been able to buy except for Pigott’s lies, Pigott owed that potential buyer no duty.

            On the other hand, I could see a more serious argument that there was some intrinsic (non-monetary) value that the sellers placed on keeping the building in tact after the sale, so I do think the 4 prongs COULD be met for them (although, valuing this non-economic harm will be nearly impossible, and is arguably not that valuable anyway, so I wouldn’t imagine that this would even be worth their time pursuing).

            That all being said, if they did hold the existing structure so dear to them, they easily could have added a covenant (that runs with the land) in the agreement barring it being torn down. It’s sort of their fault (or their lawyer’s) for not insisting on this if it was so important.

            Seems more academic than anything else, as we are just conjecturing that they are even upset about it. They might be content moving to Boca Raton and forgetting they ever owner that lot…

          • Posted by Zig

            SF guy

            Interesting. That’s for taking the time. As an analogy I got my house because I was a local. The sellers essentially let me match another’s offer who was not. Of course this was all true but the analogy would be me lying about this fact to the seller to gain leverage which similarly would have been shady but I guess legal

    • Posted by SFrentier

      I disagree. People are allowed to change their minds. Sellers would not have a case here IMO…just fart around wasting money and peoples time. Sell your bldg, let the new owners do what they want with it (legally of course), and move on. This city is acting so damn precious about every little sh*tty bldg, I’m sick of it.

      • Posted by Orland

        I hope the dirtbags pay dearly and regret ever taking on this property. Let the “games” begin.

        • Posted by moto mayhem

          i think its disngenuine, but cant thank of any reason to keep grubstake. the food is crap and its a sh%%Thole

  2. Posted by John

    So, Pigott outright lied when speaking to the SF Chronicle and all its readers and fans of the Grubstake.

    This is life in a city with insane property values.

  3. Posted by david m

    conflicted. love grubstake as a decent neighborhood late night diner and the last of the railway car diners on the entire west coast. love the idea of building 7 stories on a 1 story site, more in line with our neighborhood urban realm.

    luckily, this won’t happen for many years. the inklings are there that the cycle is winding down and by the time appeals are all settled and entitlements come through (assuming it isn’t landmarked or something), i’m guessing that the market won’t look so hot in this hood for apartments with a 500-600k build cost. with all the inventory that’ll come online around town before 2019-2020 when this comes to market, we just won’t have the buyers.

    • Posted by Zig

      Not conflicted that the new owners seems to be a dirtbag from what I’ve read. Perhaps all a misunderstanding

    • Posted by byconti

      Is it the last railway car diner on the West Coast?

      Pacific Dining Car in Los Angeles is still going strong – since 1921 – and is open 24 hours.

      • Posted by david m

        oh! thought it was gone!

        • Posted by Adam

          Read the copy on the website- not an actual Dining Car but a replica of one.

  4. Posted by Ken Lowe

    Tommy’s Joynt is next.

    • Posted by Sierrajeff

      Love that place. Every time I see it, I think “I’ve got to get back there”. But of course I never do…

  5. Posted by ostrich

    No gas station, flower stand, restaurant or weeded lot is safe in SF. Soon dirtbags won’t even be able to poop on the sidewalk anymore without having the Mayor giving them a bum rush.

  6. Posted by guest

    SF has literally thousands of plots like this that could be up-developed; getting approvals/financing is easier for smaller projects like this.

    [Editor’s Note: Roughly 9,550 such plots (as of nine years ago), in fact.]

    • Posted by Orland

      So then let those other non-unique properties be developed. Everything possible should be done to block this.

      • Posted by Emanon

        Everything possible? Why? Not being snarky. What are the characteristics of this parcel that would require it being preserved?

        • Posted by Orland

          It’s historic and current use as a community -appreciated asset *obviously *.

        • Posted by Orland

          I would like to see the proposed condo development next door get underway. Since Trumark sold the rights to a Chinese association a while back, there probably is some uncertainty as to its continued status.

    • Posted by guest

      good stuff; let’s say that’s down to 9,000 today; if we just put an average of 20 units on each in-fill site, we’d add 180,000 units of housing

  7. Posted by Amewsed

    Glad I had a chance to eat at Grubstake a number of years ago. I think it is the only place in SF that served Portuguese cuisine like bacalao. Food there can be replicated almost anywhere and from what I’ve seen, the prior owners weren’t that thrilled with the late night drunken (and high) crowd.

    Only the retired sellers can determine whether there was fraud and decide if they are going to sue. My bet is that they won’t.

    • Posted by Zig

      I don’t know the law in this case but I’m guessing another potential buyer may have the damages if this swayed the bidding process. I am sure it was all close.

  8. Posted by John

    Actually, upon further reflection, I realize that Pigott didn’t lie at all when he said “nothing will change”.

    Another San Francisco landmark is to be bulldozed for millions in development profit.

    What’s different about that??

    • Posted by unlivable city

      Exactly.

      Ah the Grubstake, where you went to breakfast (dutch) at 4am with your dubious but hot pick-up for the night, while waiting for Bart to reopen… circa 1986, when so many people I knew couldn’t afford to live in SF and opted for Oakland. In our dystopian future not only will no one still be able to afford SF, but the places where you waited for Bart to resume service will all be gone.

    • Posted by moto mayhem

      landmark? seriously?

  9. Posted by jenofla

    It’s all perfectly legal, but it’s still a**hole behavior. The more of this there is, the more cynical our world gets. So a seller wants to sell to someone, maybe at a discount, because they want a little bit of their decades of work there preserved or acknowledged. Or they want to sell the family home to a family not an AirBnb’er and they respond to a nicely-written letter. If all this just means they are played as fools, then what makes this a pleasant city to live in?

    • Posted by unlivable city

      Thank you. This is on the whole sad bunch of them. The Peskin’s and the Lee’s and Weiner’s and all of them. I hear nothing from any of them about a sense of quality of life here. And that won’t change because they are all for sale and our quality of life means nothing to them. I’ll tell you when I will support a disruptive technology: when it is an on-demand, user moderated and customer centric version of GOVERNMENT.

  10. Posted by SFrentier

    How much loot was exchanged for this bldg? Wonder if the new dev will make bread on this or not. Probably’ll need to sell at $1000 PSF +/- to make some chaa-ching.

    Ya’all being too nimby on this one. New owner has right to change their mind. Manifest destiny- let them do what they want. Shees!

  11. Posted by John

    Yes, let them do what they want with their property (an oft-heard comment here). But let us lament the changing character of our city, as all previous generations have done. It is part of our nature to regret the change. One day, people will regret the loss of the things being built today, hard as that may be to believe now. Still, one can’t help but sense there is less consideration for history, diversity and character in today’s development atmosphere.

    • Posted by Orland

      This is defeatism at its worse.

    • Posted by Serge

      In terms of regretting things, I do not believe anyone will ever regret tearing down the mid 70s Richmond/Sunset Special apartment buildings. There are some things that are just objectively hideous — many of which are being built today.

      • Posted by soccermom

        Mid 60’s “Richmond Special” apartment buildings now qualify as potential historic resources (>50 Years Old), subject to preservation review down at the planning department. Add a year to your project unless you want to keep the stucco box the same. No way you tear one down without a lengthy process.

        • Posted by parklife

          The “historical” aspect of these buildings is the least of a developers concerns. The city of SF does not easily allow the tear down of rent controlled units however unsafe or unsightly they may be.

          • Posted by Amewsed

            The best way around it is to sell the homes and take it out of the rent control market. As a homeowner, you can file a permit and make whatever desired renovations.

  12. Posted by mercury613

    The blanding of San Francisco continues…

  13. Posted by Matthew Davila

    Grubstake is highly profitable for a restaurant, and has been so for some time…. I would hesitate to call Pigott a “liar” for saying the restaurant will be “run as is”. If anything, I could see it being spruced up..

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