Block Arcade boss’s fears over Hopetoun Tea Rooms $250,000 crockery cash splash: VCAT

The boss of the historic Block Arcade aired concerns after one of his tenants, the popular Hopetoun Tea Rooms, wanted to spend $250,000 on ­expensive Royal Doulton crockery, a tribunal has heard, as a long-running dispute over the popular eatery’s failed expansion continues.

The historic Hopetoun Tea Rooms are at the centre of a bitter business dispute. Picture: Alex Coppel

The boss of the historic Block Arcade was concerned that one of his tenants, the popular Hopetoun Tea Rooms, wanted to spend $250,000 on ­expensive crockery, a tribunal has heard.

Block managing director Grant Cohen said he had warned the tea rooms’ owners, Kon and Kelly Koutamanos, about their obligations in ­financing an expansion of the business in the arcade’s ­basement.

Mr Cohen said if they failed to pay their bills, “the cards will come crumbling down” for them and for him.

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“It’s got to stack up,” he told the Victorian Civil and Administrative Tribunal.

Mr Cohen said he had been concerned that the Koutamanoses were preparing to spend $250,000 on Royal Doulton crockery, and “they might not end up with a business at all”.

Block Arcade boss Grant Cohen had concerns over the tea room’s crockery cash splash. Picture: Mark Wilson

Hopetoun, founded in the 19th century, is suing Block ­Arcade over the failed 2016 ­expansion, claiming Mr Cohen authorised a concrete pour against their wishes, which damaged the basement and made it unusable for trading.

The Koutamanoses also ­allege that a Cohen family company engaged in unconscionable conduct “to coerce” them into signing a loan deal.

Mr Cohen’s family, which founded the Godfreys vacuum cleaner empire, bought the Collins

St arcade for about $80 million in 2014.

He has ­denied the claims before the tribunal.

Barrister Luke Virgona, for the Koutamanoses, put it to Mr Cohen that his ­clients were told at a building meeting in June 2016 that they were only to attend fortnightly meetings to discuss issues with the project.

The famous Hopetoun Tea Rooms are best-known for their cake displays.

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Mr Cohen said “there was no need to have daily, hourly meetings”, and after the meeting, the outcome was “business as usual, let’s progress this”.

Mr Cohen said the Koutamanoses’ son, Peter, had even hugged one of the participants, saying: “It’s been hell at home.”

Asked about his involvement in authorising the concrete pour, Mr Cohen said: “There was no need for me to action anything.”

He said he needed to know about any concrete pour ­because it would involve ­disabling arcade alarms, ­depending on when the work took place. The case continues.

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