City settles dispute with restaurant operators

MARYSVILLE — Pat and Kathy Regan, who have run the Cedar Crest Family Restaurant and Grill at the Cedarcrest Golf Course for more than six years, have agreed to leave the premises by Nov. 6, but they’ll be doing so with two checks from the city of Marysville, one for $30,000 to cover the Regans’ legal fees, and another for $25,000 to the Regans themselves. Until then, the Regans will be allowed to stay and run the restaurant rent-free, from June through October.

The settlement was agreed upon by the city and the Regans July 6, after months of legal wrangling between the two sides. The settlement agreement, which The Marysville Globe obtained through a public disclosure request, includes a “non-disparagement covenant,” which reads as follows:

“The parties acknowledge that they have aggressively litigated this matter and there has been public and media interest in this dispute. The parties agree that they will make no statements concerning this matter, except that it has been resolved amicably by settlement which will lead to the transition in operation of the Cedar Crest Family Restaurant and Grill at Cedarcrest Golf Course on October 30, 2009 at close of business. The parties agree that neither they, nor their representatives, shall say, write, speak or publish any other or further remark, comment or statement about the resolution of this matter, and neither party, nor their representatives, shall say, write speak or publish any other remark that disparages, or might disparage, or hold in a bad light the other parties to this Agreement. The terms of this covenant shall be perpetual. Each party reserves the right to seek legal or equitable relief for breach of this covenant.”

In March of this year, the city was attempting to evict the Regans from running the restaurant by the end of that month, a move that city of Marysville Chief Administrative Officer Mary Swenson touted at the time as a means of paying down the debt on the Cedarcrest Golf Course buildings, which are owned by the city itself. In a March interview with The Marysville Globe, Swenson noted that the Regans failed to renew their lease by the deadline of Oct. 1 of last year, which means their lease expired at the end of 2008.

The Regans admitted in March that they had accidentally allowed their lease to lapse, but they claimed that Swenson had encouraged them to put in a bid for the restaurant, and assured them that, if there were no other bids, the city had no plans to change the restaurant’s operations. The Regans’ attorney, Bob Henry of Seattle, filed a request for arbitration with the city in Snohomish County Superior Court March 10 that cited Swenson’s alleged assurances, but Swenson denied these claims at the time, stating that she lacks the authority to make such promises.

On April 15, Snohomish County Superior Court Judge Thomas Wynne ruled in favor of arbitration between the Regans and the city, which allowed the Regans to continue operating the restaurant until an arbitration hearing could take place, but the two sides reached an agreement first. As part of this settlement agreement, Swenson also wrote a letter of reference for the Regans, dated June 25, which summarized the history of the restaurant, and of the Regans’ time as its operators. Swenson’s letter also included the following statement:

“The relationship between the City of Marysville as landlord and Mr. and Mrs Regan as tenants was not always totally harmonious; few landlord-tenant relationships are entirely harmonious. But the City can unequivocally state that they kept the restaurant open during the entire term of the lease and afterwards, to provide food and beverage service to golfers and the public at large. The Regans paid their rent and they had many happy and satisfied customers.”

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