Rick's Steaks Leaving RTM?

[udalum]

I'm new to EGullet, but I've been reading it for a year, now. This thread is particularly meaningful for me, so I now find it time to chime in.

1. The shopping experience is partially ruined for me. I go to RTM on a weekly basis. Not only do I buy parsley, lunch, peaches, and whatever else I need, I take the time to talk to the vendors to see how they are doing. In the market, I know who has a new niece, who has a brother who just died, and where people's children attend college. When Rick's lease was not renewed, much of the chat turned towards that issue not only with Rick, but with everyone else. People are worried about their future in the market. Such an increase in the monthly lease is hard on certain vendors.

I would equate my shopping experience to the relationship I have with my friends. I'm there for them when they have something going on bad in their lives, and listen to them with great interest. But, I would rather everything be going right for them, and hear about all the happy things in their lives.

2. While walking by the Dutch Eating Place the other day, a woman looked very confused. I overheard her asking someone where the festival was. She could not find it. I believe her shopping experience was ruined that day.

3. With a non-profit, there has to be a good, confident relationship between the staff, the management and the board. They all have to solve problems and "be on the same wavelength" to promote buy-in to any ideas.

I've worked for a non-profit where there was little respect for what the manager told the employees they needed to do. It was not a very nice job, and there was a great degree of turnover. Looking back on it, I don't know how much came from the Board of Directors or from the manager. If there isn't mutual respect, some of the current vendors may leave, and seek to open up a storefront elsewhere. We may lose the small "Mom and Pop" vendors that run their own stall. They could be replaced by vendors that have other shops in the city (Tony Luke's).

4. I've got mixed feelings about Sundays, and longer hours during the week. Many of the vendors work the stalls themselves, and I am sure they want at least one day off. Its hard to find good, reliable help, and one does not want to be left with a huge mess to start the day on Monday. But, the consumer may demand longer hours and Sundays. I'm just afraid that longer hours will displace the hard-worker, man-it-yourself vendors, and bring in someone else who has other stores in the city (Tony Luke's).

I appreciate the human element that is being brought into this thread as people post. These vendors do offer products such as tomatoes, lettuce, fish and pork, but they are people, too.

Edited August 15, 2007 by udalum (log)

[Chris Amirault]

Welcome, udalum, and thanks for that great first post.

I've been following with great interest this passionate discussion about an institution that is clearly very important to many Philadelphians, in part because I respect people on many sides of the issue, in part because it's a fascinating consideration of the various forces that bear down on food economics, and in part because I've visited RTM as a tourist and fell in love with the place instantly. (I was there for StudioKitchen, not a convention, however!)

Non-profits by definition exist to serve the public, and in my own non-profit organization, I and my board struggle every year to define who that public is. I think that at the heart of this discussion is a similar, deeply felt debate about who is to be served. There are other issues, too, but that one keeps bubbling up to me.

[Holly Moore]

. . . by removing the Rick's Steaks location from their web site map, Reading Terminal has left shoppers wandering the aisles aimlessly in search of a cheesesteak.

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What's the worst case? They eat one of Tommy's pork sandwiches instead? Horrors!

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Once again, no smilie used, leading to confusion about a portion of my post. I must remember smilies are my friend. The above statement was in jest with the added benefit of highlighting a petty management gesture that has most likely had absolutely no impact on RTM customers or on Rick's Steaks.

Edited August 15, 2007 by Holly Moore (log)

[rlibkind]

. . . by removing the Rick's Steaks location from their web site map, Reading Terminal has left shoppers wandering the aisles aimlessly in search of a cheesesteak.

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What's the worst case? They eat one of Tommy's pork sandwiches instead? Horrors!

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Once again, no smilie used, leading to confusion about a portion of my post. I must remember smilies are my friend. The above statement was in jest with the added benefit of highlighting a petty management gesture that has most likely had absolutely no impact on RTM customers or on Rick's Steaks.

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After I posted I thought I needed to add a smilie, too! I'll make up for it:

[rlibkind]

You may want to talk to the merchants at the market and see if they agree with your statement that the Rick's Steak Fiasco won't cause any long term damage. I personally know merchants who have recently signed long term leases at the market who wished they have not done so seeing recent goings on there. They are the ones who are suffering the most.

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I've no doubt some merchants have told you that. But, just like Holly pointed out about the marketing surveys:

...people are sufficiently complex that answers don't indicate action

so one has to take what you were told by a couple of merchants with large grains of sea salt.

As I noted earlier, Tom Nicolosi is one of Rick's most ardent supporters, and while I never asked him the question you posed, the dollars he's investing in new ovens and expanding capacity answers that question better than words.

I wish I could use more names of merchants I spoke with -- merchants big and small, well-established and new -- who signed the petition in support of Rick but told me they did so because of a sense of allegiance to a fellow merchant, not because they thought Rick held a morally superior position. The sense I get from these merchants is that while Rick may not have deserved what he got, he could have taken steps to avoid it and still be true to his principles.

[rlibkind]

Welcome, udalum. As another, regular, weekly shopper at the RTM, your experience and thoughts are valued.

That said, of course I have to comment!

People are worried about their future in the market.  Such an increase in the monthly lease is hard on certain vendors.

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I can't think of any tenant that welcomes a rent increase. And for the sandwich stand operators, the rent increases in the new leases are hardly insubstantial. But, let's face it, they can stand to pay more than a fresh food vendor. RTM's rental goals are still to keep them below the levels similar businesses would pay for similar high-traffic locations

While walking by the Dutch Eating Place the other day, a woman looked very confused.  I overheard her asking someone where the festival was.  She could not find it. I believe her shopping experience was ruined that day.

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I've no doubt what you report happened happened. But given that the withdrawal of the Pennsylvania Dutch from the festival and its subsequent cancellation were well-publicized, I'm nonetheless puzzled. I'm sure she was disappointed, but I don't equate that with a ruined shopping experience.

With a non-profit, there has to be a good, confident relationship between the staff, the management and the board.

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Of course this is true. But I've found that more often than not, it's not one side or the other that is responsible for any deterioration in a relationship, but both, though the degrees of responsibility can vary. What complicates the RTM situation is that while the RTM Corporation, governed by its board, is a not-for-profit organizations, the merchants are, not surprisingly, for-profit organizations. I've seen non-profits (and "profits") with the relationship problems you describe, and just as often as I've seen managements that make life miserable for employees, I've seen employees with an unwarranted sense of entitlement and/or unwillingness to adjust to change.

I've got mixed feelings about Sundays, and longer hours during the week.  Many of the vendors work the stalls themselves, and I am sure they want at least one day off. . . . I'm just afraid that longer hours will displace the hard-worker, man-it-yourself vendors, and bring in someone else who has other stores in the city (Tony Luke's).

If I was the RTM manager I'd agree to let any store that opens on Sunday to be closed on Monday, if they so desired. That meets the consumer's need for Sunday hours, but still provides a day of rest.

Once again, udalum, welcome to eGullet, and I hope the fact that I'm responding to some of the points you make does not deter you from posting your thoughts again and repeatedly. Observations and thoughts like yours spark interesting discussions and cause us constantly to rexamine our own beliefs and conclusions.

[MarketStEl]

I think it's pretty clear by now where the sentiments of the people who have been participating most actively in this discussion lie. As I said to chrisamirault in a PM, what has most surprised me about the ongoing argument is that it has been conducted by and large with both passion and civility.

As I noted in a followup to rlibkind's post of the Seattle Times article -- which has been moved to Food Traditions & Culture in hopes of generating larger discussion on the subject of farmers' markets and their role in the life of cities -- the RTM has historically not had a tradition of acrimonious relations between the merchants and the management, in contrast to (what the Seattle Times tells us is the case at) Pike Place.

I think that the speed with which current management seeks to make the changes they desire, as much as or more than the changes themselves, account for some of the tension and anxiety. If I could afford it, I'd have the management, Board of Directors and the merchants go through a personality profile called "DISC" that we just went through in our office here at Widener, led by a member of our clinical psychology faculty. It was through an exercise with that profile last year that I gained some valuable insights into my own work style and personality (including the insight that "enormous changes at the last minute" upset me mightily), and I think that all involved could use insights like this to figure out how to reach common goals more effectively.

And if I've interpreted rlibkind's post two up from this one accurately, I think that neither he nor I believe that current management handled the Rick Oliveri situation properly; I've also told Paul this personally. On that score, I think everyone on this discussion is in agreement. Where we differ is in our interpretation of the long-range implications of both this affair and the larger changes management seeks to implement that led to this affair in the first place. The Reading Terminal Market is easy to love in a way Super Fresh and Whole Foods never will be, no matter how well they fulfill their missions*, and it's that love that drives us all to act to protect it according to our own lights.

*Let the record show that I do appreciate the people who staff my neighborhood Super Fresh (a wonderfully diverse bunch, BTW, more so than I see in most local supermarkets), the folks who are "crazy about food" at the Acme and the people who enjoy what they do at Whole Foods.

Edited to reflect passage of time between my starting this post and finishing it -- a reporter from The Morning Call wanted to speak to our Hospitality Management dean about restaurant gift certificates from restaurants that shut down.

Edited August 15, 2007 by MarketStEl (log)

[rlibkind]

And if I've interpreted rlibkind's post two up from this one accurately, I think that neither he nor I believe that current management handled the Rick Oliveri situation properly....

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Almost, but no cigar, Sandy. What I was reporting was what some merchants told me. My own feeling is that, yes, while RTM management could have handled this better, Rick could have, too. And it's also my view that current RTM management has done more to further the goals and mission of the market than has Rick, either as an independent merchant or as leader of the merchants' association. But that's where Holly and I (and others) disagree.

[Holly Moore]

My sense from the merchants is that they are not supporting Rick Olivieri merely as "a sense of allegiance to Rick" but for the very specific reason that they object to such unjust treatment of a a long-term merchant, by the Reading Terminal Board. The same way I would feel if the house of a good neighbor had been seized via eminent domain so a shopping mall could be built.

This happens to be about Rick Olivieri because that is whom the board chose to evict. But there would be the same reaction to the eviction of any long term merchant, contributing merchant who abided by the terms of his lease and was being evicted solely at what appears to be the whim of the Board.

That is the issue. The Board has not offered a single specific reason for their refusal to even offer Rick's Steaks, a 25 year tenant, a lease. Such an arbitrary and aloof exercise of power is fine if the Board is merely contracting for toner for their copiers. But when it comes to taking away a man's livelihood the Board owes that man and the public trust that they serve an honest and responsible explanation.

That they don't leaves the public to wonder what sort of secret motivation could make the board so adamant in its stance in the face of merchant and public outrage? Any action taken by the Board of a public trust must stand the light of day. That the Board refuses to explain its actions means either they have something to hide and/or that they are ashamed of their actions and realize their is no justification for not renewing the lease of a solid, long-term merchant.

Edited August 15, 2007 by Holly Moore (log)

[rlibkind]

That the [RTM] Board refuses to explain its actions means either they have something to hide and/or that they are ashamed of their actions and realize their is no justification for not renewing the lease of a solid, long-term merchant.

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Once again you state an untruth as "fact" ["the Board refuses to explain its actions"]. The board has explained its actions, here and elsewhere, it's just that the explanation hasn't been to your satisfaction. That's a legitimate matter of debate and discussion, but your characterization of the board as not offering an explanation at all is, at best, hyperbole.

Saying the board inadequately explained its action is a lot different than saying the board refused to explain its action. To some that may be mere nuance, but to me nuance is critical, especially when characterizing the motivations of others.

[Bluehensfan]

As I noted earlier, Tom Nicolosi is one of Rick's most ardent supporters, and while I never asked him the question you posed, the dollars he's investing in new ovens and expanding capacity answers that question better than words.

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I am most definitely certain that Tommy is not happy to have Tony Luke come to the market. Exactly what are you concluding about his adding ovens and expanding capacity?

[Holly Moore]

That the [RTM] Board refuses to explain its actions means either they have something to hide and/or that they are ashamed of their actions and realize their is no justification for not renewing the lease of a solid, long-term merchant.

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Once again you state an untruth as "fact" ["the Board refuses to explain its actions"]. The board has explained its actions, here and elsewhere, it's just that the explanation hasn't been to your satisfaction. That's a legitimate matter of debate and discussion, but your characterization of the board as not offering an explanation at all is, at best, hyperbole.

Saying the board inadequately explained its action is a lot different than saying the board refused to explain its action. To some that may be mere nuance, but to me nuance is critical, especially when characterizing the motivations of others.

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Happy to rephrase to your specifications. The board has refused to offer a credible, non spun, consistent answer.

When I ask a six year old why he hit his sister over the head and he replies, "Cause." I do not consider that an explanation.

Beyond that the Board has never justified their action of taking away a long term, merchant's livelihood. And that, rather than semantics, is the point.

Edited August 15, 2007 by Holly Moore (log)

[rlibkind]

As I noted earlier, Tom Nicolosi is one of Rick's most ardent supporters, and while I never asked him the question you posed, the dollars he's investing in new ovens and expanding capacity answers that question better than words.

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I am most definitely certain that Tommy is not happy to have Tony Luke come to the market. Exactly what are you concluding about his adding ovens and expanding capacity?

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I'm concluding that by making a significant investment after this brouhaha surfaced, that if Tommy had an opportunity to "unsign" his lease without penalty at this point in time, he wouldn't. (I think I was clear in stating that Tommy is unhappy about how Rick is being treated and wants him to stay; but that doesn't mean Tommy is going to give up a thriving business for that. Clearly, he has no such intention, even if he had the opportunity.

You said "I personally know merchants who have recently signed long term leases at the market who wished they have not done so seeing recent goings on there." Did Tommy express that opinion to you or are you just making what you think is a reasonable assumption?

[rlibkind]

Happy to rephrase to your specifications.  The board has refused to offer a credible, non spun, consistent answer. 

When I ask a six year old why he hit his sister over the head and he replies, "Cause."  I do not consider that an explanation.

Beyond that the Board has never justified their action of taking away a long term, merchant's livelihood.  And that, rather than semantics, is the point.

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Semantics is meaning, Holly. So say what you mean the first time. My questioning of your initial statement challenged what you said as fact. I will continue to hit you over the head whenever you make what is an obviously a false statement. So if you intend to continuing to state as fact something which clearly isn't fact, get a helmet, mate.

[Holly Moore]

A statement of fact:

As I noted earlier, Tom Nicolosi is one of Rick's most ardent supporters, and while I never asked him the question you posed, the dollars he's investing in new ovens and expanding capacity answers that question better than words.

Or a conclusion based on one's interpretation of events? We all do it.

I'm concluding that by making a significant investment after this brouhaha surfaced, that if Tommy had an opportunity to "unsign" his lease without penalty at this point in time, he wouldn't.

Semantics is meaning, Holly. So say what you mean the first time.

Semantics (as in getting hung up on...) is also a tactic often employed to confuse the issues by shifting the focus to the definition of "the."

get a helmet, mate

Life is more fun without one. Feel free to keep parsing my thoughts. That I choose not to respond and to keep on message should not be interpreted that I agree with your thoughts on my phrasing and choice of words.

Edited August 15, 2007 by Holly Moore (log)

[Bluehensfan]

You said "I personally know merchants who have recently signed long term leases at the market who wished they have not done so seeing recent goings on there." Did Tommy express that opinion to you or are you just making what you think is a reasonable assumption?

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Sorry but Tommy is not the one who made the comment about signing the lease.

[Bluehensfan]

Well maybe with the announcement of the closing of the Independence Brew Pub, Inky Article Tony Luke will decide to bow out of the market negotiations and will open at that location across the street. Rick's Steaks could stay put and business could go back to normal at the market.

Wishful thinking I suppose?

Edited August 16, 2007 by Bluehensfan (log)

[serpentine]

Once again you state an untruth as "fact" ["the Board refuses to explain its actions"]. The board has explained its actions, here and elsewhere, it's just that the explanation hasn't been to your satisfaction. That's a legitimate matter of debate and discussion, but your characterization of the board as not offering an explanation at all is, at best, hyperbole.

Okay, before we start tossing around definitions of facts and truth and beauty, let's back up a bit here:

Question: Why was Olivieri's lease not renewed?

Dunston's Answer: Olivieri didn't agree to the proposed terms, so Olivieri's lease was not renewed.

Olivieri's Answer: He was discussion w/management over the terms of a lease, but RTM refused to produce a written lease.

Common sense and general business practices certainly permit negotiation of the terms of a lease renewal by both sides; RTM should be willing to explain their decision to apparently end negotiations and rescind their offer to Olivieri. Otherwise, it logically follows that other merchants are in danger of having their leases yanked if they disagree with management.

Has anyone from RTM ever provided any details beyond Dunston's comments in the linked article? Dunston's "no-one gets a lifetime lease" and "the terms of the leases are fair" are insight into his management philosophy, but do not provide a specific explanation of this situation.

And why all the mystery? If Dunston is so business-practices-oriented, certainly there would be documentation of the negotiation process?!

[Bluehensfan]

Once again you state an untruth as "fact" ["the Board refuses to explain its actions"]. The board has explained its actions, here and elsewhere, it's just that the explanation hasn't been to your satisfaction. That's a legitimate matter of debate and discussion, but your characterization of the board as not offering an explanation at all is, at best, hyperbole.

Okay, before we start tossing around definitions of facts and truth and beauty, let's back up a bit here:

Question: Why was Olivieri's lease not renewed?

Dunston's Answer: Olivieri didn't agree to the proposed terms, so Olivieri's lease was not renewed.

Olivieri's Answer: He was discussion w/management over the terms of a lease, but RTM refused to produce a written lease.

Common sense and general business practices certainly permit negotiation of the terms of a lease renewal by both sides; RTM should be willing to explain their decision to apparently end negotiations and rescind their offer to Olivieri. Otherwise, it logically follows that other merchants are in danger of having their leases yanked if they disagree with management.

Has anyone from RTM ever provided any details beyond Dunston's comments in the linked article? Dunston's "no-one gets a lifetime lease" and "the terms of the leases are fair" are insight into his management philosophy, but do not provide a specific explanation of this situation.

And why all the mystery? If Dunston is so business-practices-oriented, certainly there would be documentation of the negotiation process?!

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One would certainly expect documentation, particulalry if Rick was indeed offered a lease, which was appearently never the case.

If you ask me, what probably happened was when Rick expressed displeasure at the prospect of having his rent upped hundreds of percent that Dunston's "mall management" lobe in his brain took hold over the situation and decided that another tenant (sorry merchant) such as Quizno's (whoops Tony Luke) should be invited to the mall (I mean market).

[Holly Moore]

Two separate quotes from the PR Firm representing the Reading Terminal Market Management:

Kevin Feeley, a spokesman for general manager Paul Steinke, insisted that Olivieri's departure had nothing to do with his often thorny dealings with management as head of the Reading Terminal merchants group.

"We decided to go with [Tony] Luke's because it makes the market more competitive. In our view, it's just serving the mission of the market. The board voted overwhelmingly to not renew [Olivieri's] lease," said Kevin Feeley, a representative on behalf of general manager Paul Steinke

and one from the Board Member appointed to represent the merchants:

Board member Paul Madden agreed when he told the Metro the board preferred Tony Luke’s because “he isn’t Rick.”

This along with Serpentine's summation of Dunston's latest position shows the board's various positions, along with a candid insight from one board member.

[Bluehensfan]

See I knew the market wanted to have Capogiro at any expense!

Around Philly Article

I would support the dunk tank idea though.

[rlibkind]

If you ask me, what probably happened was when Rick expressed displeasure at the prospect of having his rent upped hundreds of percent . . .

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Uh, "hundreds of percent"? Are we overstating the case, just a little? Like by a gazillion percent?

But you're right, it's about money.

[Holly Moore]

...

But you're right, it's about money.

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How is money the issue?

Rent income for the market? My understanding is that tenant rents are set by formula. That either Rick's Steaks or Tony Luke's would pay the same rent.

Money in that Rick's Steaks will have to pay a higher rent than before. I believe Rick Olivieri has come to accept that - though a moot point since the RTM Board has not offered him a lease to sign.

More money for Tony Luke - Sure. A multi hundred thousand dollar windfall. If the deal goes down, Tony Luke Jr. will take over one of the most valuable pieces of real estate in the market for essentially the cost of any leasehold improvements he chooses to make.

Less money for Rick's Steaks - Beyond the loss of his livelihood, Rick loses tenant control of extremely valuable retail space. Usually a successful business, such as Rick's Steaks, would only turn over its lease to a prime business location upon a very substantial payment by the company interested in taking over that location.

Saying "it is about money" as in "it is all about the money" cynically taints the principle involved. It is a throw-away statement implying that if money, the root of all evil, is a factor, then it is just business and no need to worry about principles.

The Reading Terminal Market board is capriciously and arbitrarily refusing to renew the lease of a very successful tenant - a long term tenant who has run a good business, paid his rent, has been a major participant in merchant activities.

The Reading Terminal Market board chairman states:

"No one in the market" has a lifetime lease, said Dunston, who has managed the Gallery, the Shops at Liberty Place and concessions at Philadelphia International Airport.

My interpretation - No one is safe. Not DiNic's. Not Iovines. Not Basset's. Not Harry Och's. Not even the Amish. No merchant, no matter how long he has been there or what contribution he has made to the market's tradition, is safe from a whimsical flick of the Board's wrist as it utters, "Be gone mere tenant. Your lease is over, you no longer amuse us."

That is the issue - the Reading Terminal Market Board's irresponsible wielding of its power - the Board's slap to the face of Market tradition - the Board taking all sense of security away from every single market merchant, leaving each merchant to wonder as its lease comes up for renewal, especially if they are being dangled month-to-month like the market Board did to Rick's Steaks, "Am I next? Will my family be the next to lose its livelihood?"

That, and not money is the true issue.

Edited August 17, 2007 by Holly Moore (log)

[Bluehensfan]

If you ask me, what probably happened was when Rick expressed displeasure at the prospect of having his rent upped hundreds of percent . . .

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Uh, "hundreds of percent"? Are we overstating the case, just a little? Like by a gazillion percent?

But you're right, it's about money.

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Unfortunately I can't remember what Rick is paying now for rent (or was paying) but the new number that was proposed to him was astronomical. I'm not divulging numbers, but it may very well have been in the hundreds of percent ballpark or more because the market was proposing to change rents so that they are based not only on square footage but also on revenue. And that is where Rick would get taken to the claeners because his stand is so popular.

And herein lies the problem. With the new rent structure, very successful merchants would be footing the bill for those merchants who are not generating as much income.

While I do think that some provisions should be made to allow for a diverse market, essentially penalizing a merchant for operating a successful business is just plain wrong. It would encourage mediocrity and/or allow "tired" (no names mentioned) vendors to just hum along while others foot their bill.

Edited August 17, 2007 by Bluehensfan (log)

[MarketStEl]

Unfortunately, Holly IS right about the issue, which is why even though I agree with the overall program of the Market management, I still think they handled it badly.

Yes, landlords do have an absolute right to do whatever they want with their property -- subject to the constraints of only the law. But when the tenant is a retail business, the business acquires a set of assets that attach to the physical space it occupies, and a landlord should make sure that there is no other option prior to permanently devaluing those assets by terminating a lease.

We recently lost a popular coffee house that had become part of the community over a landlord-tenant dispute. In this case, it was the tenant that ultimately decided not to renew when the coffee house's owner could not get a guarantee from the landlord that anyone who acquired the business before the lease's expiration would not face higher rent. In essence, by not offering that guarantee in the lease, the landlord devalued the asset that the owner obviously planned to sell at some point -- but in this case, the landlord can't be faulted, for he was acting within his rights. (The space will become something that will probably do well but not contribute as much to street life on its block: a jewelry and crafts shop.)

Again, absent crucial evidence, we cannot know that things had not reached the same point they had in the Village Coffee House's lease negotiations. And since everything is in court, we won't be able to know until a settlement is reached or the suits go to trial. The Board of Directors evidently thought they had; however, if that was the case, they owed it to other Market merchants MORE than the general public to explain -- in detail -- why they felt so. They will certainly have to do so after the last lawyer has packed up his briefs and gone home.

Edited to add relevant adjective.

Edited August 17, 2007 by MarketStEl (log)