VIRGINIA CITY — Business owners in Virginia City are taking legal action against the state after receiving updated contracts with significant lease increases for historic properties, with some choosing to close rather than accept the new terms.
Jason Lange, a trained chef and longtime business owner operating the Wells Fargo Steakhouse, said the uncertainty is affecting everyone. The steakhouse is part of historic properties managed by the Montana Heritage Commission under the Montana Department of Commerce.
"It gives you a gut feeling. It's just a feeling of uneasiness. You know? Everything is in limbo," Lange said.
WATCH: Virginia City business owners are fighting back against steep lease increases that could close historic restaurants and shops
Lange and another restaurant have filed legal action in Madison County District Court seeking a resolution with the state.
Shauna Belding, who operates a business with her husband Kirk, explained their legal strategy.
"So, we filed an injunction with the state to pump the brakes on cancelling our contracts so that it would give us some time to get together to find a solution," Belding said.
The Beldings are among 14 business owners who received updated contracts in December. The purpose of the injunction is to get the court involved to stop the current contract cancellation and negotiate a reasonable resolution as quickly as possible.
For business owner Jamie Barta, who was operating out of the historic Star Bakery, the lease increase proved too costly.
"To add the 15% of my revenue before any costs was too great," Barta said.
Barta has decided not to sign contracts with the state.
RELATED: Virginia City Opera House closes as business owners reject state lease increases
Virginia City Mayor Justin Gatewood said in a statement that the town needs the restaurant concessionaires: "If we are to remain a diverse, vibrant, authentic town, we need devoted, independent business people to continue to live and work in VC."
According to Lange, who is part of the local chamber, planning for events that bring in tourists is also on hold.
"Right now, we are having a hard time planning for events because we just don't know how many businesses are going to be open and, you know, what's the point of planning anything if we don't have any businesses to support them?" Lange said.
The Montana Department of Commerce says it is working to find businesses to occupy spaces that have not accepted the new lease agreements.
Lange said they're seeking fairness in the process.
"We hoped to have a fair resolution. I mean, the one that they proposed isn't fair at all. I mean, we're just looking for fairness in all of this and to be able to open the doors back up," Lange said.
The court hearing with the restaurant owners is scheduled for Feb. 23.
Belding remains hopeful for a resolution.
"We are hopeful that we can find a solution that is sustainable so that we can be open next summer because summer is going to be here before we know it," Belding said.
Tonight, hear the Montana Department of Commerce's response to the legal challenge.
RELATED: Virginia City business owners say state lease increases could force historic operations to close
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