Rick's Steaks Leaving RTM?

[Holly Moore]

Yet this whole fiasco is so simple to end. Just a phone call and the time it takes to print out the lease.

That is what just doesn't ring true. If the issue is the lease terms, and Rick Olivieri is willing to sign a lease, all the RTM Board has to do is call his bluff - give Rick Olivieri a lease to sign. The standard lease, based on the accepted formula for the Rick's Steak's square footage.

Rick Olivieri has indicated that all he wants is a lease to sign. The Board refuses to even offer him a lease. Even now, after merchant protest, a canceled festival, front page newspaper articles in the Daily's, a law suit; even now the board refuses to offer Rick's Steaks a lease.

Something appears wrong. Something unsaid. Some hidden agenda. Something the Board seems unwilling to expose to daylight.

Otherwise why not just end it now and get on with the Market's business?

Edited August 17, 2007 by Holly Moore (log)

[Bluehensfan]

Further proof the market is being fashioned in the image of a mall...

This weekend at Reading Terminal Market:

TD Banknorth Event

Visit the TD Banknorth event Friday, August 17th through Monday, August 27th and get your No ATM Fees Debit Card.

No ATM Fees. Any bank. Anywhere. SM

With the money you save on ATM fees, you can do more shopping.

Member FDIC. | TD Banknorth, N.A.

No donuts but bring your wallet!

That's right. No Dutch Festival. No stools allowed with Coca Cola logos. But banks are welcome. What's next?

Edited August 17, 2007 by Bluehensfan (log)

[rlibkind]

The new lease structure is geared so that sandwich vendors like Rick would pay 10 percent of the average revenues of all sandwich vendors. So it would not be 10 percent of Rick's revenues; it would be 10 percent of the average that Rick and his direct competitors register. That's why RTM management requires individual vendors to report revenue, so the averages can be computed. I would find it difficult to believe that Rick's revenue levels are less than average; I would imagine he has among the highest revenue levels, if not the absolute highest, so while he would bring the average up, he's still ahead of the game vs. sandwich vendors who don't have his revenue volume.

If the rental increase bringing the rent level to 10 percent of revenues represents an increase of "hundreds of percent" in rent for Rick that bluehensfan avers, then previous RTM management should have been strung up by their private parts by permitting Rick such a sweet, sucrose-laden deal until now.

[Bluehensfan]

The new lease structure is geared so that sandwich vendors like Rick would pay 10 percent of the average revenues of all sandwich vendors. So it would not be 10 percent of Rick's revenues; it would be 10 percent of the average that Rick and his direct competitors register. That's why RTM management requires individual vendors to report revenue, so the averages can be computed. I would find it difficult to believe that Rick's revenue levels are less than average; I would imagine he has among the highest revenue levels, if not the absolute highest, so while he would bring the average up, he's still ahead of the game vs. sandwich vendors who don't have his revenue volume.

If the rental increase bringing the rent level to 10 percent of revenues represents an increase of "hundreds of percent" in rent for Rick that bluehensfan avers, then previous RTM management should have been strung up by their private parts by permitting Rick such a sweet, sucrose-laden deal until now.

←

So why did the market not offer Rick a lease? Was he generating too much income and adversely skewing the rents of the other less profitable sandwich purveyors?

[MarketStEl]

The new lease structure is geared so that sandwich vendors like Rick would pay 10 percent of the average revenues of all sandwich vendors. So it would not be 10 percent of Rick's revenues; it would be 10 percent of the average that Rick and his direct competitors register. That's why RTM management requires individual vendors to report revenue, so the averages can be computed. I would find it difficult to believe that Rick's revenue levels are less than average; I would imagine he has among the highest revenue levels, if not the absolute highest, so while he would bring the average up, he's still ahead of the game vs. sandwich vendors who don't have his revenue volume.

If the rental increase bringing the rent level to 10 percent of revenues represents an increase of "hundreds of percent" in rent for Rick that bluehensfan avers, then previous RTM management should have been strung up by their private parts by permitting Rick such a sweet, sucrose-laden deal until now.

←

So why did the market not offer Rick a lease? Was he generating too much income and adversely skewing the rents of the other less profitable sandwich purveyors?

←

My understanding was more like: He was resisting the new lease structure and its associated requirements to the point where even after the basic points had been agreed to by all relevant parties, he still continued to object to details. Extrapolating from that assumption, my guess is that the management got exasperated and decided there was no reasoning with the guy, and by the time he was ready to play along with the others, they had thrown up their hands (literally).

I'd like to toss out another question that is more relevant than it appears:

Who does the Merchants' Association represent?

Caution: Occam's razor may not deliver a clean shave here. The simplest answer -- "the merchants" -- may not accurately reflect how all merchants feel. I've heard comments that suggest that some merchants did not feel the association was addressing their day-to-day concerns but rather spending too much time fighting the new leases.

I have gotten the impression as I've learned more about the whole standoff that the fresh-food purveyors and restaurants don't quite see eye-to-eye about how the market should be managed, and that at least some of those merchants in neither category are closer to the fresh-food folks (or maybe just those named Iovine) in their views. But once again, let me caution you that even this is too simple a statement.

[rlibkind]

The new lease structure is geared so that sandwich vendors like Rick would pay 10 percent of the average revenues of all sandwich vendors. So it would not be 10 percent of Rick's revenues; it would be 10 percent of the average that Rick and his direct competitors register. That's why RTM management requires individual vendors to report revenue, so the averages can be computed. I would find it difficult to believe that Rick's revenue levels are less than average; I would imagine he has among the highest revenue levels, if not the absolute highest, so while he would bring the average up, he's still ahead of the game vs. sandwich vendors who don't have his revenue volume.

If the rental increase bringing the rent level to 10 percent of revenues represents an increase of "hundreds of percent" in rent for Rick that bluehensfan avers, then previous RTM management should have been strung up by their private parts by permitting Rick such a sweet, sucrose-laden deal until now.

←

So why did the market not offer Rick a lease? Was he generating too much income and adversely skewing the rents of the other less profitable sandwich purveyors?

←

My point was of providing the information regarding lease was not to resolve the whys and wherefors of the Rickviction (heavens knows, we've discussed that ad nauseum; I have enough difficulty figuring out my own motivations, let alone Rick's and Ricardo's) but to provide some factual perspective on the structure of the leases and why the statement that Rick's lease payments would go up "hundreds of percent" does not appear to meet the common sense test.

[udalum]

Thank you to those who welcomed me. I like that we can all write about our differing opinions, and I don't get offended when people disagree with me.

I do have to respond to something. I had written that I overheard a confused woman the day of the Dutch Festival asking someone where it was being held. I think there was some discussion on this board about her shopping experience as possibly being "ruined". I looked up the definition of ruined, and thought about my comment.

Sure enough, I really think that her shopping experience was potentially ruined that day. Let's all try to put ourselves in her shoes, and think about how we all may have a ruined shopping experience. If I were to walk to the Italian Market Festival, and find that it was cancelled, I would consider that a ruined shopping experience. Yes, the Italian Market is there, but that alone is not worth the trip for me, unless there is a festival there. In fact, if the Italian Market Festival was there, and there were no whole pigs, I would consider that a ruined shopping experience.

There are several reasons why she may have not received the word that it was cancelled. Perhaps she does not read the newspaper or listen to the news. I do know some people like that. She could have heard it from someone awhile ago, and put it in her datebook. Also, maybe a hotel worker had an old schedule that was not changed appropriately, and she was a tourist in town. I know I have gone to a handful of things in the city where it was listed incorrectly on some online website. When I get there, it is not there, or a part of it was missing (like the sugarless cake today at the Constitution Center-- someone must have axed that at the last second).

As far as this RTM fiasco, I would really like to hear more of the management and Board of Director's facts on why they are not renewing Rick's lease. I know there are always two sides to a story. Most of the time, I can see both sides, even on big controversial issues. I would certainly appreciate if the management or Board of Directors can tell us something else that we have not heard about Rick's. I'm just not convinced they have a valid point for not renewing his lease, and it seems like most of the general public feels the same way. I think it would be in their best interest to tell us more, if there IS anything. If they don't, they obviously will look like the "bad guys" to some of us.

Edited August 18, 2007 by udalum (log)

[Bluehensfan]

Well I was informed by a second party today that Rick's rent increase (if he were to be offered one) would not be as drastic as I previously reported. Admittedly I must have made a mistake with the figure, as fingers are quickly being pointed at me from many directions, so please disregard those numbers (see this whole fiasco must be BLUEHENS fault!). Anyway nix the numbers...no need to create another argument that detracts from the situation at hand.

It was also brought to my attention that the TJ BankNorth event being held at the market helped bring money to the market to reduce these (as incorrectly reported by myself) rent increases.

Either way, apparently a meeting will be held later this month at the Convention Center to discuss the new leases (which given my declining credibility, may need to be verified by another source).

Just don't shoot the messenger.

[udalum]

I visited RTM today. I though the TJ BankNorth display was not in character for something that should be at RTM. It is one step closer to what I have seen at the Manayunk Arts Festival and the Italian Market Festival. At the Italian Market Festival, I was hounded at least 15 times to sign up to win a new car. I believe it was some sort of vacation club company. At Manaynk, people from Advil approached me about 10 times to take a sample of their product. These events are less enjoyable because there are pushy people promoting products that don't relate to the event. The TJ BankNorth vendors were not pushy, though.

If it will decrease the rent and bring in new improvements to RTM, I suggest that the companies brought in relate to food or something else that could potentially be sold at the market. Those companies could also sponsor the Dutch Festival, if the Dutch vendors are in agreement.

Edited August 19, 2007 by udalum (log)

[MarketStEl]

I must be getting good at tuning some things out, for I walked right past those TD Banknorth carny barkers and didn't think much of it one way or the other.

That, or I've become numb to commercial shills everywhere. (And speaking of things that are like kudzu, how about those ads?)

There's already one big food-related sponsored event at the RTM now: the annual Pennsylvania Best Chef (Southeastern Region) competition, which is sponsored by the Pennsylvania Department of Agriculture, Sysco Foodservice of Central Pennsylvania and a bunch of other food companies. And did any of us miss Scrapplefest this past spring?

[udalum]

The lawsuit with Rick's cousin is settled: http://cbs3.com/topstories/local_story_234112139.html

Now, if only the RTM mess gets straightened out...

[Holly Moore]

So what if the bank promotion raised $1500 to support the RTM mission. The wheel of fortune and the rest of the set-up stuck out like a sore thumb. The guys working the stand reminded me of the USAIR pests in terminals B, C and F who promise free miles to get someone to stop on the way to their plane and sign up for a US Air credit card.

Totally out of place and, to my reading, diametrically opposed to the RTM mission statement unless management believes that ends of $1500 justifies the means of a carny-like (or regional mall like) promotion.

I took this pic on Saturday. Checked back on Thursday and they were still there pulling people in.

I'm guessing the market board spent a lot more than $1500 on attorney fees that week for the Rick's Steaks fiasco.

[cwdonald]

Any idea what is going to replace Independence Brew Pub? Any chance that Tony Luke's could take this over and Rick stay where he is?

[Bluehensfan]

Any idea what is going to replace Independence Brew Pub? Any chance that Tony Luke's could take this over and Rick stay where he is?

←

Rumor has it that the Brewpub site already has a tenant lined up and it's not Tony Luke.

[Holly Moore]

Just read that Attorney Sprague is going to have his hands full defending Vince Fumo on 139 charges of federal fraud and obstruction of justice. Doesn't seem fair to Vince that Sprague should have to partially divert his attention to the Rick's Steaks lease dispute which could be so easily resolved by the RTM Board simply offering Rick's Steaks the same lease they would like to offer Tony Luke's.

Either Rick Olivieri signs or he does not sign. If he does it is all over. If he does not then it no longer remains a public issue. For me, at least, the issue is and always has been that a long term merchant who has not violated the terms of his lease has been evicted without being offered the opportunity to sign a lease.

No one knows how much longer this fiasco is going to fester. One month so far. As long as this lease dispute continues, the RTM Board looks bad and there has to be major tension within the market merchants.

It also has to be costing the RTM a lot of money that could be spent much better serving its mission statement rather than waging war on a long term merchant.

Edited August 31, 2007 by Holly Moore (log)

[rlibkind]

Gee, Holly, why don't you let us know how you feel about this?

[Holly Moore]

Never did thank you for starting this thread, Bob.

I figure one month post eviction is worth commemorating, especially since the RTM Board could end this so easily.

[MarketStEl]

This week's Philadelphia Business Journal contains a letter from RTM board member Richard Blades, written in response to an op-ed by Stephan Rosenfeld, who is Rick Oliveri's PR spokesman (and formerly SEPTA's PR chief), that ran in the previous issue.

AFAIK, this is the first time that anyone in RTM management has gone public with management's side of the dispute. As the online edition is available only to print subscribers, I will include the three most pertinent paragraphs below:

The non-profit Board of the Reading Terminal Market has one mission. We are charged with preserving and enhancing Reading Terminal Market as a public farmers’ market, a unique and diverse Philadelphia treasure.  In the service of this mission, Board members – who are volunteers and not political appointees – have worked diligently to implement a number of changes designed to make the Market stronger.  These include:  establishing consistent and predictable operating hours for our customers; creating a new rent structure that preserves the Market’s vendor diversity even while keeping rents below the levels charged at other shopping venues around the city; and sharing sales information so that the Market can better understand whether business is growing or contracting at any given time.  All of these are reasonable requests, to be sure, and all were negotiated over many months with the Market merchants.

      Mr. Olivieri now claims that he is willing to sign such a lease.  But throughout the winter and spring, he repeatedly made known his objections to these key terms.  Not surprisingly, the Board took Mr. Olivieri at his word, and we chose to move forward in a different direction.  Not in retaliation, not to serve some hidden agenda, and certainly not to trouble the many other merchants who operate so successfully at the Market every day.  All of these claims may make great copy, but the fact is that we took the action in the interests of ensuring a strong future for the Reading Terminal Market.  That’s our sole motivation, and it will not change.

      That said, Board members have met throughout the summer with individual merchants and with small groups of merchants, including the Amish merchants, to answer their questions directly and truthfully.  We will continue to do so.

I have had conversations with a few Market merchants who have said that customers do get confused when merchants do not keep uniform operating hours, so perhaps that issue is not as trivial, and insisting on its enforcement not as hostile to the Market and its traditions, as critics would have it. I'll repeat myself here: In today's retail environment, it's the merchant who has to inconvenience himself so the customer doesn't have to. I'll repeat myself again: I don't see why the restaurants should be required to be open past lunchtime given the RTM's current operating hours, but if the Market management believes that requiring this would result in increased business for the Market as a whole -- including traffic that currently passes it by -- then I really can't quibble with their efforts to put this belief into action. If they prove un- or counterproductive, they can always drop the requirement later. And I understand that uniform operating hours was one of the bones of contention between Rick Oliveri and the management.

The bottom line, however, is that enforcing a uniform-hours rule will not destroy the Market or its traditions. If you're going to criticize the RTM management, criticize them for allowing that bank promotion, not for this.

[Chris Amirault]

Thanks, Sandy, for that material. It's very useful for context.

I'll repeat myself here:  In today's retail environment, it's the merchant who has to inconvenience himself so the customer doesn't have to. ...

The bottom line, however, is that enforcing a uniform-hours rule will not destroy the Market or its traditions.  If you're going to criticize the RTM management, criticize them for allowing that bank promotion, not for this.

←

People can criticize whatever they want, of course! But I'd like to suggest that creating uniform hours does, in fact, radically affect the traditions of the market. If RTM management want this to be a quirky, old-school market a la the Boqueria in Barcelona, where customers are supposed to smile when they show up at a shop and it's closed because the owner went home early, that's fine. If they want the customer to have a more regular experience that malls have trained them to have, then that's fine, too. But those are two very different experiences, and I think it's important to acknowledge their deep cultural significance.

[wkl]

the thing i don't get is.......if the operating hours were a bone of contention among ALOT of the merchants, and oliveri was representing the merchants concerns, this just smacks of a "shoot the messenger" situation.

fer christsakes, just give him the lease and let him sign it! what's the big deal? we're talking about cheese steaks here.

[serpentine]

In the service of this mission, Board members – who are volunteers and not political appointees

These two categories are by no means mutually exclusive.

      Mr. Olivieri now claims that he is willing to sign such a lease.  But throughout the winter and spring, he repeatedly made known his objections to these key terms.  Not surprisingly, the Board took Mr. Olivieri at his word, and we chose to move forward in a different direction.  Not in retaliation, not to serve some hidden agenda, and certainly not to trouble the many other merchants who operate so successfully at the Market every day.  All of these claims may make great copy, but the fact is that we took the action in the interests of ensuring a strong future for the Reading Terminal Market.  That’s our sole motivation, and it will not change.

"We assumed he didn't want a lease, since he had so much to stay about proposed terms." That's petty and passive-aggressive. (And seriously, they've never encountered anyone who's possibly more bark than bite? Here? In Philadelphia?!)

Fine, it wasn't in retaliation, to serve a hidden agenda, or blah blah blah other merchants. It was "merely" a stunning lack of professionalism by a board who claims to be trying to raise the bar.

[MarketStEl]

"We assumed he didn't want a lease, since he had so much to stay about proposed terms." That's petty and passive-aggressive. (And seriously, they've never encountered anyone who's possibly more bark than bite? Here? In Philadelphia?!)

Fine, it wasn't in retaliation, to serve a  hidden agenda, or blah blah blah other merchants. It was "merely" a stunning lack of professionalism by a board who claims to be trying to raise the bar.

←

I don't know if I've said this here, but I did say this on the parallel discussion on Phillyblog:

It might have been better all around if Paul or someone representing the Market had simply said "We think Rick Oliveri is a world-class p***k and we're tired of dealing with him," impolitic though that would have been. At least the cards would have been on the table.

Agreed about the handling of the whole thing all the same. And I did tell Paul that the savvy move would have been to put the ball solidly in Rick's court by offering a lease with all the stuff he didn't like included. But most of us acknowledge this already. At least we have a little better understanding why they felt that wouldn't work now.

chrisamirault: Point well taken, and, of course, I wouldn't stifle anyone's right to voice their opinions as they see fit. Hadn't thought of that particular aspect of "quirkiness" -- and it brings up a whole bunch of cultural assumptions that we haven't even tried to address in this discussion (after all, your counterexample comes from the Iberian peninsula, where afternoon siestas are part of the order of business in many places, in sharp contrast to the Anglo-Saxon Protestant work ethic). People could certainly disagree with my statement that "the merchant must inconvenience himself so the customer doesn't have to," though today's marketplace tends to punish such merchants unless they offer something so distinctive that customers will accept the inconvenience to get it (again, your counterexample applies here).

To tie in a related topic on this board, the seasonal farmers' markets clearly fall into that latter category. The RTM also does in many respects. But is it so distinctive that it could continue as is and both hold onto and grow its customer base? That's the $64k question.

[rlibkind]

But I'd like to suggest that creating uniform hours does, in fact, radically affect the traditions of the market.

←

If "the market" means the Reading Terminal Market, no, uniform hours do not radically affect the traditions of the market. As it is merchants are required to remain open, so in that sense it's "uniform" hours today. The problem has been some merchants disregarding the requirement and/or objecting to extensions of those hours.

If RTM management want this to be a quirky, old-school market a la the Boqueria in Barcelona . . . that's fine. If they want the customer to have a more regular experience that malls have trained them to have, then that's fine, too. But those are two very different experiences, and I think it's important to acknowledge their deep cultural significance.

←

Philadelphia isn't Barcelona any more than Barcelona is Philadelphia. And having regular hours is not a mall thing: it's a business thing. Malls haven't trained us to expect predictable hours; customers demanded it long before the modern mall existed.

[Holly Moore]

Golly gee, an entrepreneur that doesn't play well with management. What a surprise. The mean man make management feel bad???

Over the years, in my corporate life, I had the pleasure of working with franchisee's from McDonald's, Burger King and Dunkin' Donuts. One thing I learned - some of the toughest franchisees to persuade to accept change also ran the best operations and were a credit to their franchisor.

Rick Olivieri may indeed be a pain in the ass as far as the Board and Management is concerned. So what. He runs a good operation. He works hard. Anyone who has worked a grill day in, day out, understands that Rick Olivieri's "sweat equity" speaks for itself. He cares about his business. Philadelphians will never agree on cheesesteaks, but if you hang out in his eating area you don't hear many complaints.

The Olivieri family has been a part of Reading Terminal Market for 25 years. I doubt many if any board members, outside of perhaps Paul Madden - Rick's Steaks sole positive vote on the board - can say the same.

Give Rick Olivieri a new lease. Let him get about his mission of selling cheesesteaks and let the Board of Directors get about its mission.

Edited September 1, 2007 by Holly Moore (log)

[Holly Moore]

From RTM Director Blade's letter in the PBJ

The non-profit Board of the Reading Terminal Market has one mission. We are charged with preserving and enhancing Reading Terminal Market as a public farmers’ market, a unique and diverse Philadelphia treasure.  In the service of this mission, Board members – who are volunteers and not political appointees – have worked diligently to implement a number of changes designed to make the Market stronger.  These include:  establishing consistent and predictable operating hours for our customers; creating a new rent structure that preserves the Market’s vendor diversity even while keeping rents below the levels charged at other shopping venues around the city; and sharing sales information so that the Market can better understand whether business is growing or contracting at any given time.  All of these are reasonable requests, to be sure, and all were negotiated over many months with the Market merchants.

I would term someone specifically appointed by the Mayor to represent him to be a political appointee. Another board member is a substantial contributor / fund raiser to Mayor Street's campaigns. Another is a member of city council. Another is the treasurer of the Philadelphia Convention Center Authority.

Of the board's three goals - rent structure, consistent hours, sales reporting - only one seems true to the Market's Mission - structuring rent to support the producers. Can't really argue with that.

Consistent hours - Nothing to do with the mission statement. A big deal for convention goers as in RTM functioning as a food court for the Convention Center - but other than that, if the demand was there, it would be filled. If the board believes the demand to be there AND achievable, let them persuade the merchants to extend their hours. Offer rent incentives, an advertising and marketing plan. Don't try to force it through lease changes.

Sales Reporting - totally bogus. Despite all the denials, this looks like Step 1 in a long term plan to eventually get merchants on leases that are a combination of a fixed base and a percentage of sales over a certain level. You know, like they do in the shopping malls. Any manager or board member who can't "better understand whether a merchant's business is contracting or growing..." merely by walking the aisles of the market a few times a day or a few days of the week, should not be concerned with analyzing sales in the first place.

Edited August 31, 2007 by Holly Moore (log)