Rick's Steaks Leaving RTM?

Holly Moore · July 31, 2007

Capaneus said:
You think that maybe, possibly, Kevin Feeley disagrees with the vision for the Market that you and Mr. Olivieri so thoroughly share?
Correct me if I'm wrong, but the stated reason for the changes in the leases was to guarantee the long-term viability of purveyors. I have seen nothing, anywhere, that leads me to question this. I have heard nothing, here or elsewhere, that articulates with even marginal coherence either the reasons this is not a good idea, or the reasons the new terms do not truly aim to achieve this.
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There has been not one whit of evidence produced that the long-term viability of purveyors is threatened. The board is creating a straw man to support their agenda of applying regional shopping mall lease tactics to an institution with the history and tradition of reading terminal market.

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Am I missing something? As I hear it, Rick's vocally opposed the revenue reporting clause in the lease, and by implication the idea of supporting the less-profitable purveyors. No? It is certainly the case that the merchants who have been vocal in his support are, as far as I've heard, also facing the prospect of higher rent. I have not encountered any such support from the merchants who, lest we forget, stand to benefit from these changes - and they are the majority of the Market, and explicitly central to its mission, which, may I point out, the prepared-food merchants are not, as I read the media reports. A stand, by the way, with which I agree. And one that is implicitly rejected by Olivieri's current actions.

1. The board and management has not implemented revenue sharing. As far as I know that is not even on the table at this time.

2. The Reading Terminal Market is composed a bunch of individual operators - not national chains. These are entrepreneurs at their most entrepreneurial. No entrepreneurs want to share specifics of their farm stand and lunch counter revenues with anyone - especially a board and management as slick and adversarial as the current market's.

3. A number of the producers - along with the lunch merchants - have vocally rallied against the ousting of Rick's Steaks. They signed the petition, they spoke out at Rick Olivieri's press conference.

4. NO ONE HAS OFFERED OLIVIERI a lease to sign. How can it be suggested that Olivieri is being kicked out of the market for not signing a lease?

5. In negotiating the lease on behalf of the merchant's association Olivieri was representing the members of the association. Demands he made had surely been discussed by a committee of member merchants if not all of them.

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I'm having some trouble seeing the heroes and villains in the this the same way you do, Holly. Heck, so far the only thing that has impacted me in all this is that DiNic's has finally abandoned their wicked wicked ways, and will now serve roast pork in the company for which it was always meant: rabe and sharp provolone. A restoration of rightness that seems to have stemmed from the prospect of Tony Luke's as a neighbor, since decades of vocal advocacy had previously done me no good at all.

I'm seeing villains and victims, not villains and heroes. The villain, true to the old time movies, is the group of people taking away a man's livelihood even though that man has done everything right. The villain is the group of people taking away a family legacy - a business that has been and would continue to be passed on from one generation to another.

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In the end, the scoreboard stands as follows for me: better cheesesteaks (about which I care little), assuming TL's maintains their quality standards - an assumption I will make until I taste otherwise; improved roast pork sandwiches all around (about which I care much more); improved long-term viability of the majority of the merchants, pushing off the day when Reading Terminal Market becomes the Convention Center's food court (about which I care by far the most).

1. So if someone makes "better" hoagies RTM should kick out Carman's and put in Sarcone's Deli?

2. Rick's Steaks is already one of the most successful ventures in the market. What Tony Luke's name may do is make the market a bigger selling point for the convention center - take the market one more step down that slippery slope to Convention Center Food Court..

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In the down column... well, I have nothing against Mr. Olivieri. I wish him all the best in his future ventures, and I regret the consequences this move will have for him. But I sincerely hope that Market management weathers the publicity storm, allows the law suit to find the circular file it belongs in, and continues to put my interests, and farmers', and those of the merchants who provide them with an outlet, above feeding conventioneers. Sorry if that sounds callous, but the matter does seem that straightforward to me.

Doesn't sound callous as much as it sounds like buying into the the RTM management spin. There is no indication that the merchant vendors of produce etc have any problems - longterm or short term. The market is a booming success. Rather than dicking around playing puppet master with people's livelihoods, RTM management should figure out why they can't pull off a showcase for regional growers a tenth as effective as the Headhouse Square Sunday Market.

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By the way, Holly, why do you believe Rick's was in fact prepared to sign the new lease? I've heard him complain he wasn't offered one, but I cannot find a record of him explicitly stating the new terms were acceptable to him, and much on how iniquitous he finds them.

From conversations with market merchants though not directly with Rick. RTM Market could easily prove me wrong. Just give him a lease and see if he signs it. That is where the inaneness of this situation soars - management is kicking out a long term tenant for not signing a lease he never refused to sign.

If management's issue is the lease - give Rick's the same lease that similar merchants have recently signed. Problem is over.

If management's issue is wanting Tony Luke's in - give us something beyond "gut feel" as to why it is necessary to cause such a controversy by replacing one of the busiest and most successful businesses in the market with one that really doesn't have all that much more name power than "Olivieri" - the family that came up with the idea of the cheesesteak in the first place.

Let the RTM management also prove that the majority of any additional sales generated by a Tony Luke's will not come from the pockets of the other lunch merchants. It is very conceivable that a Tony Luke's at the market could threaten/damage market merchants more than help them.

It would be interesting if one of our local media's investigative reporters looked into why board and market management members are so stubbornly deaf to any attempts to end and resolve a dispute that could so easily be resolved.

Edited July 31, 2007 by Holly Moore (log)

mrbigjas · July 31, 2007

Holly Moore said:
Let the RTM management also prove that the majority of any additional sales generated by a Tony Luke's will not come from the pockets of the other lunch merchants. It is very conceivable that a Tony Luke's at the market could threaten/damage market merchants more than help them.

this is what i'm really wondering about. someone already posted mentioning all the failed tony luke's ventures around town, including the one at penn, on 18th street, in new york. who's to say that this one won't go sour too, and then what?

rlibkind · July 31, 2007

mrbigjas said:
. . . someone already posted mentioning all the failed tony luke's ventures around town, including the one at penn, on 18th street, in new york. who's to say that this one won't go sour too, and then what?
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Location, Location, Location! Any seller of a decently made cheese steak will mint cash at that location. Rick makes a decent cheese steak, and it's obvious from how hard he's fighting that he doesn't want to give it up: it's a great business. No reason to believe that TL, or any other competent maker of cheese steaks, wouldn't do as well.

Holly Moore · July 31, 2007

Is Tony Luke Jr, himself, planning on personally running his Reading Terminal Stand on a day-by-day basis for the next ten years or longer? Rick Olivieri seems a pretty hard working and consistent presence at Rick's Steaks.

And if Tony Luke's is as a big of draw as market management believes it to be, has market management done any studies that would relieve concerns about his operation attracting significant sales from other market lunch merchants? I'd be real concerned about that if I had a lunch stand down the aisle.

rlibkind · July 31, 2007

Holly Moore said:
Is Tony Luke Jr, himself, planning on personally running his Reading Terminal Stand on a day-by-day basis for the next ten years or longer? Rick Olivieri seems a pretty hard working and consistent presence at Rick's Steaks.
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Interesting point, and one addressed by the market's Operating Policy Guidelines: "Leases shall require the owners to be actively involved in the management and operation of their businesses within the Market." Of course, "actively involved" is a matter of interpretation. The owner of Downtown Cheese splits his time between the RTM and his Ardmore store. Ken Foster only showed up at his RTM outlet once a week. But not physically being there all or even most of the time doesn't mean you're not actively managing it. If TL does take over the space, my guess is he'll be there most of time during the first few weeks or couple of months of operation, then cut back once he's satisfied the operation no longer requires his minute-to-minute supervision.

Holly Moore said:
And if Tony Luke's is as a big of draw as market management believes it to be, has market management done any studies that would relieve concerns about his operation attracting significant sales from other market lunch merchants? I'd be real concerned about that if I had a lunch stand down the aisle.
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Holly Moore said:
Let the RTM management also prove that the majority of any additional sales generated by a Tony Luke's will not come from the pockets of the other lunch merchants. It is very conceivable that a Tony Luke's at the market could threaten/damage market merchants more than help them.

Conceivable, but highly unlikely. Market management has the power to veto any item in a product line, so they could limit TL to cheese steaks, prohibiting TL from selling roast pork to protect DiNic's or hoagies to project Carmine's, Salumeria and Spataro's. In any event, Carmine's thrives on the overflow of long lines at Rick's, and if TL or another operator is as successful, Carmine's will do at least as well. Salumeria, as jtnicolosi and his dad explained to me, relies a lot more on olive oil and grocery sales than hoagies. The only possible threat I see would be to Spataro's cheese steak business, which they added last year when they moved to their new location; but at the same time, they expanded their breakfast hot sandwich business.

mrbigjas · July 31, 2007

rlibkind said:

mrbigjas said:
. . . someone already posted mentioning all the failed tony luke's ventures around town, including the one at penn, on 18th street, in new york. who's to say that this one won't go sour too, and then what?
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Location, Location, Location! Any seller of a decently made cheese steak will mint cash at that location. Rick makes a decent cheese steak, and it's obvious from how hard he's fighting that he doesn't want to give it up: it's a great business. No reason to believe that TL, or any other competent maker of cheese steaks, wouldn't do as well.
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consider the fact that he bailed out of penn because of a rent increase, though.

hey i don't know, i'm just speculating, throwing stuff out there. you got one guy who does a good business there and has for 25 years, and you're booting him to bring in another guy who has opened and closed like six branches of his business in the last five.

Bluehensfan · July 31, 2007

mrbigjas said:

rlibkind said:

mrbigjas said:
. . . someone already posted mentioning all the failed tony luke's ventures around town, including the one at penn, on 18th street, in new york. who's to say that this one won't go sour too, and then what?
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Location, Location, Location! Any seller of a decently made cheese steak will mint cash at that location. Rick makes a decent cheese steak, and it's obvious from how hard he's fighting that he doesn't want to give it up: it's a great business. No reason to believe that TL, or any other competent maker of cheese steaks, wouldn't do as well.
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consider the fact that he bailed out of penn because of a rent increase, though.
hey i don't know, i'm just speculating, throwing stuff out there. you got one guy who does a good business there and has for 25 years, and you're booting him to bring in another guy who has opened and closed like six branches of his business in the last five.
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Face it, Tony Luke was in the right place at the right time (or couldn't say "no" to the caller at the other end of the line). I wonder how this PR nightmare would have played out if Tony realized all the negative publicity he would be getting and just declined the offer. You know what they say about hindsight being 20/20.

Edited July 31, 2007 by Bluehensfan (log)

Holly Moore · July 31, 2007

rlibkind said:

Holly Moore said:
Is Tony Luke Jr, himself, planning on personally running his Reading Terminal Stand on a day-by-day basis for the next ten years or longer? Rick Olivieri seems a pretty hard working and consistent presence at Rick's Steaks.
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Interesting point, and one addressed by the market's Operating Policy Guidelines: "Leases shall require the owners to be actively involved in the management and operation of their businesses within the Market." Of course, "actively involved" is a matter of interpretation. The owner of Downtown Cheese splits his time between the RTM and his Ardmore store. Ken Foster only showed up at his RTM outlet once a week. But not physically being there all or even most of the time doesn't mean you're not actively managing it. If TL does take over the space, my guess is he'll be there most of time during the first few weeks or couple of months of operation, then cut back once he's satisfied the operation no longer requires his minute-to-minute supervision.
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I was speaking more to all of Tony Luke Jr.'s other stores that seem to have suffered because Tony Luke Jr. has not mastered the ability to be two places at once.

The market's Operating Guidelines being what they are, encouraging active involvement, is it not better to have a full time owner operator than one who is spreading his time and attention over a bunch of places and who know how many more in the future. Out of curiosity, if Tony Luke's were to decide to franchise his business or offer owner partnerships, would that sort of management structure force him to leave the market?

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Holly Moore said:
And if Tony Luke's is as a big of draw as market management believes it to be, has market management done any studies that would relieve concerns about his operation attracting significant sales from other market lunch merchants? I'd be real concerned about that if I had a lunch stand down the aisle.
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Holly Moore said:
Let the RTM management also prove that the majority of any additional sales generated by a Tony Luke's will not come from the pockets of the other lunch merchants. It is very conceivable that a Tony Luke's at the market could threaten/damage market merchants more than help them.
Conceivable, but highly unlikely. Market management has the power to veto any item in a product line, so they could limit TL to cheese steaks, prohibiting TL from selling roast pork to protect DiNic's or hoagies to project Carmine's, Salumeria and Spataro's. In any event, Carmine's thrives on the overflow of long lines at Rick's, and if TL or another operator is as successful, Carmine's will do at least as well. Salumeria, as jtnicolosi and his dad explained to me, relies a lot more on olive oil and grocery sales than hoagies. The only possible threat I see would be to Spataro's cheese steak business, which they added last year when they moved to their new location; but at the same time, they expanded their breakfast hot sandwich business.

Then Tony Luke's will not be selling burgers, hot dogs, pork sandwiches, hoagies, etc? Just steak sandwiches? Then why is it to the market's advantage to bring in Tony Luke just to sell steak sandwiches? Uh, he is really not very famous for steak sandwiches.

If you grant that Rick's now pretty much runs at capacity, how is Tony Luke's going to bring much more business into the market?

Restaurant Marketing 101 - If you want to build your sales you will do so much more successfully by attracting regular customers at nearby restaurant or, in this case, just down the aisle, than by trying to bring new customers into the neighborhood.

rlibkind · July 31, 2007

Holly Moore said:
The market's Operating Guidelines being what they are, encouraging active involvement, is it not better to have a full time owner operator than one who is spreading his time and attention over a bunch of places and who know how many more in the future.

Generally, yes. Practically? As I pointed out, it can be done and done well, though you're right to question TL's ability to do this, based on the track record.

Holly Moore said:
Out of curiosity, if Tony Luke's were to decide to franchise his business or offer owner partnerships, would that sort of management structure force him to leave the market?

If he continued to be the owner-operator, or if he sold the RTM outlet to another owner-operator, I don't see any issues: continuing businesses get sold at the RTM on an irregular but not rare basis. A franchise, however, in which a franchisor dictates operating requirements to a franchisee, even if that franchisee was an on-premises, full-time manager, would be a clear violation.

Holly Moore said:
Then Tony Luke's will not be selling burgers, hot dogs, pork sandwiches, hoagies, etc? Just steak sandwiches?

I haven't been privvy to the RTM-TL talks, so I don't know. But I do know RTM has the right to approve/disapprove product lines.

Holly Moore said:
Then why is it to the market's advantage to bring in Tony Luke just to sell steak sandwiches? Uh, he is really not very famous for steak sandwiches. If you grant that Rick's now pretty much runs at capacity, how is Tony Luke's going to bring much more business into the market?

I'm not convinced this is to the market's advantage. But I don't see it as being to its disadvantage, either.

Holly Moore said:
Restaurant Marketing 101 - If you want to build your sales you will do so much more successfully by attracting regular customers at nearby restaurant or, in this case, just down the aisle, than by trying to bring new customers into the neighborhood.

If Rick's running at capacity now, there's no way that TL is going to harm other sandwich vendors. Even if he finds a way to expand capacity in the existing use and space configuration (I'm doubtful he could, but if he did that's a prima facie case for his superiority as an operator vs. Rick). Given the long lunch lines at Rick's, Tommy's, and Carmine's today, my hunch is a modest expansion of noontime capacity won't hurt anyone's business. An exponential capacity expansion, which could be possible by converting Rick's current seating area to production and sales, would cause me considerably grater concern.

rlibkind · July 31, 2007

Capaneus said:
By the way, Holly, why do you believe Rick's was in fact prepared to sign the new lease? I've heard him complain he wasn't offered one, but I cannot find a record of him explicitly stating the new terms were acceptable to him, and much on how iniquitous he finds them.

He would have. As I recall the conversation, Rick told me that if RTM had offered him a lease, "I'd have been stupid not to sign it."

Holly Moore said:
The board and management has not implemented revenue sharing. As far as I know that is not even on the table at this time.

Not by that name, but a similar concept is why many of the lease changes have been sought by RTM management. All merchants, no matter what they sell, pay a Common Area Management (CAM) fee, based on their square footage. The roughly dozen purveyors at the market (the produce, meat, dairy vendors, etc.) pay only CAM. All the others (lunch counters, trinket sellers, etc.) pay the CAM plus an additional fee. That additional fee is being restructured based on the average revenue of particular classes of non-purveyors, for example, all lunch vendors, or all crafts vendors. Under the new leases the additional fee a particular non-purveyor pays is based not on his or her revenue, but the average revenue for all similar vendors. The fee is in the form of the percentage of average revenue for the class of vendor; sandwich vendors, for example, might pay a higher percentage of average revenue than craft vendors.

Holly Moore said:
There has been not one whit of evidence produced that the long-term viability of purveyors is threatened. . . .

Holly Moore said:
There is no indication that the merchant vendors of produce etc have any problems - longterm or short term. The market is a booming success.

Could that be because RTM management has done a good job at keeping costs economical for the purveyors by tilting the burden upon those in more remunerative lines of business? That's what the restructured leases are all about, to make sure the more prosperous businesses (by virtue of what they sell, rather than their skill) support those in less prosperous lines of business. The less prosperous lines of business are those that are most compatible with the market's century-old tradition.

There are lots of reasons for the market's success, going back to David O'Neill's leadership as market manager and the public outcry when the razing of the terminal to make away for the convention center was a distinct possibility. Important contributors have been the market's Mission Statement and, even more important in my opinion, the Operating Policy Guidelines. These two documents set forth principles that support and further the true traditions of the market, and the actions by market management I've witnessed over the past 25 years (including those of current managerial personnel) have been overwhelmingly supportive of those traditions. I have yet to be convinced that Rick's eviction furthers those goals, but at the same time, I do not see it as undermining them.

Holly Moore said:
RTM management should figure out why they can't pull off a showcase for regional growers a tenth as effective as the Headhouse Square Sunday Market.

If by "effective" you mean selling drop-dead gorgeous produce at drop-dead prices, RTM will never compete with Headhouse or any of the other farmers' markets selling $3/pound tomatoes, $2 a head lettuces, and $8 a pound chickens.

The Reading Terminal Market is not a "showcase" selling designer fruit nor is it meant to be. It's a public market designed to provide consumers a wide range of affordable foods. The produce vendors at the RTM serve more people with good quality produce, at considerably lower prices, than Headhouse could ever hope to provide. At the same time, the RTM is still able to offer "high-end" produce, meat and dairy products of the same or better quality than that found at the Farmers' markets. Don't get me wrong, I love the Headhouse market, and all the other seasonal farmers' markets I patronize. I'm lucky, because I can afford to spend my disposable income this way. But just as the RTM isn't Headhouse Square, Headhouse Square isn't the RTM. (It's like comparing a down-and-dirty copy shop that gets the job done efficiently, quickly and cheaply with artisans who use hand-set type and a flat-bed press; yes, they both reproduce printed documents, but their respective markets compete only on the margins.)

Holly Moore · July 31, 2007

rlibkind said:

Holly Moore said:
Then why is it to the market's advantage to bring in Tony Luke just to sell steak sandwiches? Uh, he is really not very famous for steak sandwiches. If you grant that Rick's now pretty much runs at capacity, how is Tony Luke's going to bring much more business into the market?
I'm not convinced this is to the market's advantage. But I don't see it as being to its disadvantage, either.

Holly Moore said:
Restaurant Marketing 101 - If you want to build your sales you will do so much more successfully by attracting regular customers at nearby restaurant or, in this case, just down the aisle, than by trying to bring new customers into the neighborhood.
If Rick's running at capacity now, there's no way that TL is going to harm other sandwich vendors. Even if he finds a way to expand capacity in the existing use and space configuration (I'm doubtful he could, but if he did that's a prima facie case for his superiority as an operator vs. Rick). Given the long lunch lines at Rick's, Tommy's, and Carmine's today, my hunch is a modest expansion of noontime capacity won't hurt anyone's business. An exponential capacity expansion, which could be possible by converting Rick's current seating area to production and sales, would cause me considerably grater concern.
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Then how can the Board and Management state Tony Luke's will benefit the market?

Perhaps the Board, the Management and the individual members of both could just be candid as to why they are so adamant in taking away a longterm merchant's livelihood. And if they are unwilling to do so, perhaps an investigative reporter from Philadelphia Media could bring some much needed daylight to the true motivations for this action.

Edited July 31, 2007 by Holly Moore (log)

Holly Moore · July 31, 2007

rlibkind said:

Capaneus said:
By the way, Holly, why do you believe Rick's was in fact prepared to sign the new lease? I've heard him complain he wasn't offered one, but I cannot find a record of him explicitly stating the new terms were acceptable to him, and much on how iniquitous he finds them.
He would have. As I recall the conversation, Rick told me that if RTM had offered him a lease, "I'd have been stupid not to sign it."
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I believe Rick stated at the press conference that he kept asking for a lease and management, rather than speaking frankly, just kept replying, "It is not your time yet Rick?"

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Holly Moore said:
There has been not one whit of evidence produced that the long-term viability of purveyors is threatened. . . .

Holly Moore said:
There is no indication that the merchant vendors of produce etc have any problems - longterm or short term. The market is a booming success.
Could that be because RTM management has done a good job at keeping costs economical for the purveyors by tilting the burden upon those in more remunerative lines of business? That's what the restructured leases are all about, to make sure the more prosperous businesses (by virtue of what they sell, rather than their skill) support those in less prosperous lines of business. The less prosperous lines of business are those that are most compatible with the market's century-old tradition.

So it is working? Then I have to ask again, why not offer Rick the same lease others have been given?

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There are lots of reasons for the market's success, going back to David O'Neill's leadership as market manager and the public outcry when the razing of the terminal to make away for the convention center was a distinct possibility. Important contributors have been the market's Mission Statement and, even more important in my opinion, the Operating Policy Guidelines. These two documents set forth principles that support and further the true traditions of the market, and the actions by market management I've witnessed over the past 25 years (including those of current managerial personnel) have been overwhelmingly supportive of those traditions. I have yet to be convinced that Rick's eviction furthers those goals, but at the same time, I do not see it as undermining them.

Yes those days with David O'Neill at the helm were good days for the market. Maybe someone from the press should track him down and get his reaction to the current market management's treatment of a merchant who was there with him during the market turn-around and revitalization.

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Holly Moore said:
RTM management should figure out why they can't pull off a showcase for regional growers a tenth as effective as the Headhouse Square Sunday Market.
If by "effective" you mean selling drop-dead gorgeous produce at drop-dead prices, RTM will never compete with Headhouse or any of the other farmers' markets selling $3/pound tomatoes, $2 a head lettuces, and $8 a pound chickens.
The Reading Terminal Market is not a "showcase" selling designer fruit nor is it meant to be. It's a public market designed to provide consumers a wide range of affordable foods. The produce vendors at the RTM serve more people with good quality produce, at considerably lower prices, than Headhouse could ever hope to provide. At the same time, the RTM is still able to offer "high-end" produce, meat and dairy products of the same or better quality than that found at the Farmers' markets. Don't get me wrong, I love the Headhouse market, and all the other seasonal farmers' markets I patronize. I'm lucky, because I can afford to spend my disposable income this way. But just as the RTM isn't Headhouse Square, Headhouse Square isn't the RTM. (It's like comparing a down-and-dirty copy shop that gets the job done efficiently, quickly and cheaply with artisans who use hand-set type and a flat-bed press; yes, they both reproduce printed documents, but their respective markets compete only on the margins.)

I said nothing about "competitng." And I don't see the produce at Headhouse as "designer fruit." Top quality, fantastic variety - but designer???

The Reading Terminal Mission does not speak to showcasing (in spirit, as opposed to those exact words) local producers? The Reading Terminal Market would not be better as a the showcase for local producers?

Over the past 25 years I've had a few public disagreements with market management. Even David O'Neill (I was an expert witness for Jack McDavid when RTM repairs were creating rainstorms inside the market.) But in general I agree that they have done a good job in furthering the market's mission.

That was before the board and management turned petty, arrogant, vindictive, and punitive. Any board and management that does not grasp that far more good can be accomplished for the market by working as partners with the merchants rather than as intimidating adversaries should not be running a public trust. Geez, they even upset the Amish merchants to the point they have canceled the Dutch festival and are not willing to commit to a long term relationship with the current market.

Edited July 31, 2007 by Holly Moore (log)

lancastermike · July 31, 2007

I only visit RTM perhaps 5 or 6 times a year. Thus I have not been involved in this discussion. In Lancaster, the Central Market, the last remaining of the many market places that the town once housed faces some similar issues. The biggest challenge Central market faces is allowing the few farmers and purveyors to survive. Central market used to have a rule that no prepared food could be offered. Now, the market would be lonely without those stands. The market offers less and less farmers goods all the time. Lancaster's new convention center is due to open next year across the street. Pressure on the market will be even greater to be a source of trinkets,not food.

RTM is a dream for me when we do visit. It does not matter to me who is selling cheesesteaks at RTM. And I doubt it really does to anyone else. I believe Holly's defense of Rick comes as a matter of principle not taste.

I have nothing to add to the debate about Rick's that Bob and Holly have not stated. And in an aside, there discussion is like watching two seasoned professional boxers. Stating their position, but never being personal.

Holly did say this:

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Geez, they even upset the Amish merchants to the point they have canceled the Dutch festival and are not willing to commit to a long term relationship with the current market.

If the Amish merchants are upset about the action regarding Rick's I can surmise it is because they feel their business is somehow threatened, not out of some love for Mr. Oliveri

Edited July 31, 2007 by lancastermike (log)

Holly Moore · July 31, 2007

Or the Amish merchants are upset because they think Rick Olvieri is being treated unfairly. That is what I gathered from their published statement.

Edited July 31, 2007 by Holly Moore (log)

rlibkind · July 31, 2007

Holly Moore said:
Then how can the Board and Management state Tony Luke's will benefit the market?

Like I said earlier, I'm not convinced replacing Rick's with TL advances the market's mission, but I'm equally unconvinced that it harms it.

Holly Moore said:
Yes those days with David O'Neill at the helm were good days for the market.
. . .
Over the past 25 years I've had a few public disagreements with market management. Even David O'Neill (I was an expert witness for Jack McDavid when RTM repairs were creating rainstorms inside the market.) But in general I agree that they have done a good job in furthering the market's mission.

We totally agree here. O'Neill established the foundation; it's been getting even better since then.

btw, I started shopping at the RTM in 1982, and iirc, there were puddles on the floor whenever it rained even before the train shed work for the convention center started, before Jack took over the old Market Diner in the space most recently occupied by Foster's. For those who have started shopping at the RTM more recently, the Market Diner was a stainless-clad free-standing diner, just like you'd fine along Jersey highways in the 1950s; much of the current Down Home Diner's fixtures, booths and walls were salvaged from the original.

Holly Moore said:
The Reading Terminal Mission does not speak to showcasing (in spirit, as opposed to those exact words) local producers? The Reading Terminal Market would not be better as a the showcase for local producers?

Over the last 10 or 12 years, including just the last two years, RTM management has brought in a number of different farmers to sell their product directly. Few have been successful: I'm sure there were as many reasons for their failures as there were sellers, but from a customer's point of view (mine) most of them had extremely limited offerings and did not reliably appear. Earl Livengood, who's been at the RTM about 10 years, iirc, is the only one who succeeded, and I think that's because his product quality is not only high, but his variety is a bit broader. He doesn't just sell salad greens, as one failed vendor did, as good as his salad greens were. (Indeed, I believe Earl sells those very same salad greens produced by the very same producer, Paradise Organics. While much of what Livengood sells comes from his own farm, some originates with other Lancaster County growers.)

I think in an environment like Headhouse where you've got a dozen different produce vendors, with somewhat but not completely overlapping product lines, someone who sells produce as limited or esoteric as Queens Farm can make a go of it.

As far as bringing a lot of farmers in, one challenge the RTM would face is space; any space they devoted to the farmers during the season would become empty and uninviting from late fall through mid-spring. Or they could displace existing merchants to make room for a larger crop of farmers. Or they could take away the seating, but that would kill all the lunchtime sandwich vendors. In any event they'd still face the wintertime emptiness problem, especially from January through mid-April. I imagine this is the reason why RTM offered the Food Trust the dark, uninviting Filbert Street underpass area for the market which located to Headhouse Square: they didn't have anyplace else to put it. Parkway Corp. sure as heck wasn't going to give up its open air parking area for four or five Sundays!

Holly Moore said:
Any board and management that does not grasp that far more good can be accomplished for the market by working as partners with the merchants rather than as intimidating adversaries should not be running a public trust.

If market management is unable to regain the trust of its merchants, it's not just the merchants and market management who suffer. We do. That's why, beginning now, even before the dust settles, the market has got to begin earning that trust back.

Holly Moore · July 31, 2007

Pike Place Market in Seattle has been very successful in successfully showcasing local vendors. It can be done.

I agree the 1100 block of Filbert will not work. It is the only area of the market needing a good dose of daylight more than the metaphorical "board room."

Holly Moore · July 31, 2007

rlibkind said:

Holly Moore said:
Any board and management that does not grasp that far more good can be accomplished for the market by working as partners with the merchants rather than as intimidating adversaries should not be running a public trust.
If market management is unable to regain the trust of its merchants, it's not just the merchants and market management who suffer. We do. That's why, beginning now, even before the dust settles, the market has got to begin earning that trust back.
←

Trust is not something the Reading Terminal Market board and management gets to switch on and off to suit their landlord or personal agendas.

Capaneus · July 31, 2007

I'm not really that good with the quotation-making widget, so I'll try to make this self-contained:

- As to "revenue-sharing", what Mr. Liebkind said, and that has seemed clear to me from the get-go: the two-tiered lease shifts the burden away from purveyors, and generally asks the more successful businesses to support the rest. Un-American, I know. Tough.

- Which is how Management sees themselves protecting the long-term viability of the merchants who further the Market's mission. Which, once again, does not involve cheesesteaks. Your point, if I may, is actually that those purveyors are not *currently* threatened. I wonder, however, exactly what self-serving motive one would ascribe to management in such a plan? In all, I'll take their word until I'm shown otherwise. I believe the plan may or may not be effective. But its intent is fairly unambiguous.

- As to "Management's spin", well, I'm open to a better alternative.

- As to other merchants supporting Ricks, consider that there are many aspects to the changes being attempted. The Amish, for instance, aside from their admirable, selfless outrage, oppose Management on the question of hours of operation. In spite of that, the only merchant I can find on the record in support of Rick's is DiNic's.

- Tony Luke's failed at Penn, for a number of reasons. The 18th St. outlet, I thought, was not actually part of the same organization at all from a very early point. Moreover, they do in fact decent serve a decent roast pork sandwich. More to the point, the New York and Atlantic City ventures, which are a truer test of the brand's portability, are extremely successful, both from a business and from a quality standpoint. Several friends who should know tell me that apart from the weirdness of eating them in NY, the roast pork there is much as it is at home.

- As to competing with the Headhouse Market, to some hitherto unexplained purpose... As Rob said, I don't think I'd be happy to see Farmer's Market prices being the only alternative. As I see it, they have tried to increased local farmers' presence over the last few years, while maintaining a broad-based clientele, thanks to a healthy mix of vendors. Personally, I like the result.

Look, I'll cut to the chase: I like what I see as the ultimate goal of the changes being made. I'm not altogether happy with the cowardly way the Market Board handled Rick's lease, but I believe it is their complete right to handle it whatever way they see fit. And I am even less happy with the way Rick has tried to use the media and the courts to bully his way out of a situation that I feel was essentially of his own creation. I see no hint of Robin Hood in his behavior. If there is a "little guy" in all this, it is much of the (largely quiet) tenancy, and their interests are best served by a management victory, as far as I can tell. I fail to see who besides Rick's profits from a Rick's win. I don't agree with DiNic's portrayal of the likely consequences of Tony Luke's arrival, even if they do in fact sell roast pork sandwiches. Which I dearly wish them to.

Bluehensfan · August 1, 2007

lancastermike said:
If the Amish merchants are upset about the action regarding Rick's I can surmise it is because they feel their business is somehow threatened, not out of some love for Mr. Oliveri
←

I think that the Amish, particularly Junior, values their relationship with Rick as not only a fellow tenant but also as a friend. And so do I (granted I am not a tenant). And that is why I think that at least some of the people on here are very upset about Rick's eviction. Because the market, like it or not, is really like a large extended family where merchants look out for each others' interests. Sure there is healthy competition at the market, but many of the tenants look to one another as both friends and family. Remember a year or two ago when Alvin Beiler took up donations for the family of a worker at the Dutch Eating Place who passed away as a result of a horseback riding accident? This is just one of many examples of the good natured relationship between tenants and one of the reasons why Rick's situation is so hard to swallow.

In a semi-related vein, here is the latest headline from KYW:

http://www.kyw1060.com/pages/740482.php?co...ontentId=738829

Rick Steak's Staying Despite 'Illegal' Tenancy

by KYW's Steve Tawa

When Rick's Steaks opens as usual on Wednesday at the Reading Terminal Market, its owner will be told he's there' illegally.'

The non-profit board of directors that manages the market told Rick Olivieri in late June that his month-to-month lease would not be renewed on July 31st. Olivieri believes he had an implied lease - an oral commitment.

Management spokesman Kevin Feeley says they've tried to handle the Olivieri situation in a low key manner, and will not be heavy handed in pushing him out. But Feeley makes it clear they will remove him.:

'If he continues to occupy that space without benefit of a lease, after notifying him, we will take all appropriate measures to remove him from that space.'

Management wants to replace Rick’s Steaks with another well known Philly style sandwich maker, Tony Luke’s.

rlibkind · August 1, 2007

Any attorneys out there with commercial landlord-tenant expertise who would like to comment on the relative tactics of both sides?

I'm no attorney, but here goes anyway.

RICK: He'll open tomorrow and serve customers, hoping RTM physically removes him with cameras rolling. Build additional public sympathy so the politicos put pressure on Dunston and other board members to reverse the eviction.

RTM: They willl let Rick open Wednesday, then tell him he's got to close because he has no lease and was properly notified more than a month ago that he had to vacate the premises July 31. When he refuses to kill his grill, they won't physically remove him or bring in security. No physical confrontation for the cameras. Instead, they will go to court and get an eviction order. At that point Rick will comply because his attorney will tell him he has to; if he doesn't comply, RTM will then go back to the judge and seek a contempt finding.

Of course, as I write this, the RTM may have carpenters hard at work making it impossible for Rick to open. Or maybe they've just shut off his gas, electric and water and padlocked his freezers and refrigerators.

Another question for anyone who can answer or hazard a guess: if Rick was seeking a TRO, did his attorney fail to file for an emergency hearing, or did he file and get turned down? Or, despite what he told the news media, did he not file at all? Or his is attorney waiting for an actual eviction attempt before seeking a court order?

MarketStEl · August 1, 2007

Holly Moore: The board and management has not implemented revenue sharing. As far as I know that is not even on the table at this time.

rlibkind: Not by that name, but a similar concept is why many of the lease changes have been sought by RTM management. All merchants, no matter what they sell, pay a Common Area Management (CAM) fee, based on their square footage. The roughly dozen purveyors at the market (the produce, meat, dairy vendors, etc.) pay only CAM. All the others (lunch counters, trinket sellers, etc.) pay the CAM plus an additional fee. That additional fee is being restructured based on the average revenue of particular classes of non-purveyors, for example, all lunch vendors, or all crafts vendors. Under the new leases the additional fee a particular non-purveyor pays is based not on his or her revenue, but the average revenue for all similar vendors. The fee is in the form of the percentage of average revenue for the class of vendor; sandwich vendors, for example, might pay a higher percentage of average revenue than craft vendors.

Me: Bob, this is the first time anywhere that I have seen any details of the lease changes explained by anyone -- and it explains why management insists on sales reporting even if the leases don't contain percentage-of-sales clauses (which, I discovered in the course of researching historical trivia for last week's eG Foodblog, were first used by good old J.C. Nichols at his pioneering shopping center, the Country Club Plaza): How can you determine the average revenue for a class of vendors if you don't have data on all the members of the class?

I've had some offline conversations with a Phillyblogger I know who also knows several Market merchants (and who has joined the eGullet Society), and she explained to me that percentage leases are tough on small independent businesses -- probably for the same reason that the gross-receipts portion of the city's business privilege tax is a business-killer. I can't figure out how basing the percentage on a group average is better in that regard than doing it business by business, though.

I don't think that John Q. Public either wants or needs this level of detail, but I could explain this in a way that I believe most people could understand and place it in a context that, while it would not have avoided this, would have maybe blunted the criticism.

Holly Moore said:

rlibkind said:

Capaneus said:
By the way, Holly, why do you believe Rick's was in fact prepared to sign the new lease? I've heard him complain he wasn't offered one, but I cannot find a record of him explicitly stating the new terms were acceptable to him, and much on how iniquitous he finds them.
He would have. As I recall the conversation, Rick told me that if RTM had offered him a lease, "I'd have been stupid not to sign it."
I believe Rick stated at the press conference that he kept asking for a lease and management, rather than speaking frankly, just kept replying, "It is not your time yet Rick?"

Is there video or a transcript of the press conference online?

I doubt this changes the legal landscape at all, since what we are dealing with here is contracts and not labor relations. If it were the latter, Rick would have a legal leg to stand on, for this statement definitely looks like failure to bargain in good faith.

Holly Moore said:
RTM management should figure out why they can't pull off a showcase for regional growers a tenth as effective as the Headhouse Square Sunday Market.

rlibkind said:
If by "effective" you mean selling drop-dead gorgeous produce at drop-dead prices, RTM will never compete with Headhouse or any of the other farmers' markets selling $3/pound tomatoes, $2 a head lettuces, and $8 a pound chickens.
The Reading Terminal Market is not a "showcase" selling designer fruit nor is it meant to be. It's a public market designed to provide consumers a wide range of affordable foods. The produce vendors at the RTM serve more people with good quality produce, at considerably lower prices, than Headhouse could ever hope to provide. At the same time, the RTM is still able to offer "high-end" produce, meat and dairy products of the same or better quality than that found at the Farmers' markets. Don't get me wrong, I love the Headhouse market, and all the other seasonal farmers' markets I patronize. I'm lucky, because I can afford to spend my disposable income this way. But just as the RTM isn't Headhouse Square, Headhouse Square isn't the RTM. (It's like comparing a down-and-dirty copy shop that gets the job done efficiently, quickly and cheaply with artisans who use hand-set type and a flat-bed press; yes, they both reproduce printed documents, but their respective markets compete only on the margins.)
I said nothing about "competitng." And I don't see the produce at Headhouse as "designer fruit." Top quality, fantastic variety - but designer???

That word may be a bit over the top, but there is more than passing similarity between the small-scale, artisanally-produced, identifiably-from-a-specific-farm foodstuffs showcased at the farmers' markets and designer clothes sold at boutiques. Perhaps the most relevant parallel--as Bob alluded to above--is that Jane Average Shopper can't afford it. (For an entirely-within-the-Market comparison and contrast, consider who--and how many--you see shopping Iovine's and who--and how many--you see at the Fair Food Farmstand.)

I know that the current management sees both Whole Foods and 9th Street as "competition," and while I don't think they regard the seasonal farmers' markets in this fashion, the shoppers at the farmers' markets--at least the ones in Center City--are probably more likely to do a chunk of their regular grocery shopping at WFM than they are at the produce stands on 9th Street. To the extent that this statement is true, then they are "competing" for the food dollars of those shoppers, even if it's the dollar they'd otherwise spend at Whole Foods rather than the dollar they'd spend at the Headhouse Farmers' Market.

Holly Moore said:
Pike Place Market in Seattle has been very successful in successfully showcasing local vendors. It can be done.
I agree the 1100 block of Filbert will not work. It is the only area of the market needing a good dose of daylight more than the metaphorical "board room."
←

Of course, since we're all agreed that the Food Trust- and Farm to City-sponsored markets aren't really "competition," then Holly's point above holds.

However: Pike Place Market has far more space to accommodate seasonal, farmer-to-consumer direct sales than the RTM does. As it is, the Seattle market struck me as more crafts fair than food emporium, though a more thorough inspection of all the market buildings might have produced a different impression. Bob did a good job of showing how accommodating a seasonal farmers' market at the RTM today is more like solving a jigsaw puzzle: Sure, there's space not used to sell stuff, but putting more vendors in those spaces means fewer people can find a place to eat what they bought at the eateries. Maybe the management could get rid of the crafts-fair-type places the RTM has now, but then they'd have the problem of more idle space in the off-season. Most of these farmers aren't going to switch to selling popcorn and crafts the way Kauffman's does; rather, they simply won't set up stands.

Capaneus said:
- As to "Management's spin", well, I'm open to a better alternative.

I think I gave a good outline of one upthread.

Quote
- As to other merchants supporting Ricks, consider that there are many aspects to the changes being attempted. The Amish, for instance, aside from their admirable, selfless outrage, oppose Management on the question of hours of operation. In spite of that, the only merchant I can find on the record in support of Rick's is DiNic's.

True, no other merchants have publicly stated their support for Rick on this forum. But some did voice their support in written and oral statements at today's press conference, and I have heard from third parties I trust that most merchants signed the petition.

Quote
Look, I'll cut to the chase: I like what I see as the ultimate goal of the changes being made. I'm not altogether happy with the cowardly way the Market Board handled Rick's lease, but I believe it is their complete right to handle it whatever way they see fit. And I am even less happy with the way Rick has tried to use the media and the courts to bully his way out of a situation that I feel was essentially of his own creation. I see no hint of Robin Hood in his behavior. If there is a "little guy" in all this, it is much of the (largely quiet) tenancy, and their interests are best served by a management victory, as far as I can tell. I fail to see who besides Rick's profits from a Rick's win. I don't agree with DiNic's portrayal of the likely consequences of Tony Luke's arrival, even if they do in fact sell roast pork sandwiches. Which I dearly wish them to.
←

Save for those last two sentences, I agree with what you say above. However, if TL gets no more space total than Rick has now, it might not have as harmful an impact on DiNic's than we fear, for he won't have the room to turn out lots more sandwiches. But "might" covers a large territory, so I don't begrudge jtnicolosi his fear here -- it is justifiable.

Once again, however, I'd like to offer free advice in my capacity as a public relations professional to the Market management: Level with your customers and the general public, and tell as much as you can about what's really happening. And do the same with your tenants. As those TV commercials for a mortgage lender say, People are smart. They can tell when something's not right, and they won't react well if they hear someone say that it is when they know it isn't.

Remember, there's no such thing as bad publicity. Unless you make it so.

Edited to get the BB code to work. For some strange reason, the first nested quote set throws all the others off.

Edited August 1, 2007 by MarketStEl (log)

serpentine · August 1, 2007

Re: Whole Foods and Ninth Street as competition

Ninth Street isn't really competition, as the merchants also shut down around 5 pm or earlier. (Except the new little Mexican groceries, bless them.)

Whole Foods is competition because they are actually open when I get home from work and egads! even when I work late. That said, they're terribly expensive and I find the lack of ripeness of the fruit, in particular, to be deplorable.

The most frustrating thing about trying to buy decent produce and meat in this city, if you have a day job, is finding someone to sell it to you.

MarketStEl · August 1, 2007

serpentine said:
Re: Whole Foods and Ninth Street as competition
Ninth Street isn't really competition, as the merchants also shut down around 5 pm or earlier. (Except the new little Mexican groceries, bless them.)
Whole Foods is competition because they are actually open when I get home from work and egads! even when I work late. That said, they're terribly expensive and I find the lack of ripeness of the fruit, in particular, to be deplorable.
The most frustrating thing about trying to buy decent produce and meat in this city, if you have a day job, is finding someone to sell it to you.
←

"Competition" can take multiple forms. It can be on convenience, quality, variety, service, price, or some combination of all five.

9th Street competes with the RTM largely on price, though there are some 9th Street merchants who can compete with it on quality. I buy lemons on 9th Street because those don't vary widely in quality, and I can always find them cheaper there. I buy most of the rest of my produce at the RTM because most of what I buy does vary widely in quality, and I know that the Market's produce vendors all offer more consistent and consistently better quality than the 9th Street vendors do, and two of them offer consistently good or better quality at competitive prices.

Neither 9th Street nor the RTM compete with supermarkets or Whole Foods on convenience thanks to their hours. RTM management wants the Market to head in that direction, however.

I wholeheartedly endorse your concluding sentence above.

Edited August 1, 2007 by MarketStEl (log)

Holly Moore · August 1, 2007

Dateline Reading Terminal Market: As of 11:15 AM on Wednesday AUGUST 1, Rick's Steaks is open for business as usual. Only difference, with all the staving media types hanging out, business must be way up.

Police was there too. Standing in line to order cheesesteaks.

My understanding, and I am not a lawyer, only play one on eGullet, is that the first move is up to the RTM Market Board and Management. They have to serve an eviction notice, which I believe happened around 10 AM this morning. It states that Rick's Steaks has to vacate the market within a set number of days - not sure how many.

In the mean time the cheesesteaks are grilling for at least the immediate future.

Edited August 1, 2007 by Holly Moore (log)

marinade · August 1, 2007

serpentine said:
Re: Whole Foods and Ninth Street as competition
Ninth Street isn't really competition, as the merchants also shut down around 5 pm or earlier. (Except the new little Mexican groceries, bless them.)
Whole Foods is competition because they are actually open when I get home from work and egads! even when I work late. That said, they're terribly expensive and I find the lack of ripeness of the fruit, in particular, to be deplorable.
The most frustrating thing about trying to buy decent produce and meat in this city, if you have a day job, is finding someone to sell it to you.
←

The same holds ever so true with fish.

Back to topic. The real sleeping giant in all of this is still Whole Foods. That giant will awake with a booming voice when it opens on 15th and Vine ... with a food court ... with parking... and within a few walking minutes from the convention center. While conventioneers will still find it convenient to walk across the street to grab lunch, some of the non-lunch vendors are going to take a hit. What could evolve is a quirky food court with Amish earrings, that is the food purveyors become ornaments.

To be perfectly honest, RTM is not a lunch stop for me. I like the choices when I'm there but in the last few decades I can't say I've tried every single one of them. I miss the fact that I can’t get a good liverwurst sandwich with choices of that German pate since Freidrichs left. Cheese steaks I can get just about anywhere, the same with hoagies, falafel, breakfasts, and burgers.

RTM floor space is a precious commodity. I can’t help but wondering if somewhere someone made somebody an offer they couldn’t refuse.

Jim

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