Rick's Steaks Leaving RTM?

[Holly Moore]

Stopped by to sign Rick's petition today. While there, snapped a picture of the line. It loops in the foreground to the door than back along Ricks and then left to order and pass down the line. Rick's was packed and had the longest line in the RTM at that time.

Help me understand again? What exactly is broken about Rick's that needs fixing by Tony Luke's - Other than Rick's lack of subservience to RTM management that is?

Edited July 15, 2007 by Holly Moore (log)

[Holly Moore]

I dont know if Rick's been given a fair chance Townsend but isnt the core of the issue the fact that market management feels that many lunchtime merchants have undervalued leases not only in the volume of sales they generate but also the fact that more than 90% of those sales are in cash which by conventional wisdom is always under-reported to the IRS, thus asking for accurate sales figures to establish what the businesses can bear in terms of leases (which is legitimate) also creates the possibility that those declared sales figures if they were accurate would cause the market management to increase the rent structure and if inaccurate would create a formal document that would be in direct conflict with official tax returns.

That is the catch 22.

The market can simply hire an actuarial company to figure out an estimate of sales of any merchant in the market simply by observation of volume and the cost of an average sale.

If any merchat challenges the sales estimate, you could simply ask them to prove otherwise....

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Good point about auditing sales. That's what we used to do in the franchisor business to make sure we got our percentages for fees, rent and advertising.

However as I understand it, Rick has never been offered a lease to sign and percent rents are not an issue at this time.

[Manley]

Did anyone else catch this quote towards the end of the Metro story?

Oliveri says he is being kicked out of the market because the board is retaliating against him for advocating for his fellow merchants. Board member Paul Madden agreed when he told the Metro the board preferred Tony Luke’s because “he isn’t Rick.”

Now, tell me how this isn't personal again?

[Bluehensfan]

Holly, thanks for the pictures. If you look closely you can probably see E-Gullet up there at Rick's computer in the back.

Here's another issue that has arisen at the market which is very, very troublesome. Not only does it involve Rick, but it involves many of the current merchants at the market. Here's the problem: many, many of the merchants I have spoken to are not happy about the decision to evict Rick, as they are concerned about what has happened to him and worry about their own well being at the market given the quick decision to evict him. How can this possibly be "good" for the market if all of the merchants are angry at the board's decision? And if you were a potential tenant interested in opening up a business at the market, would you find this to be a good environment to open shop? I don't think so. I do think that the board needs to "tread lightly" because they will not be able to get this "new blood" in the market given the tense relationship that now pervades the market.

If Rick's is not the only merchant who is refusing to provide sales data, am I to logically assume that the other tenants who have refused to provide their sales figures have a date with the executioner as well? If this is the case, all I see in the future is a bunch of empty stalls (and Tony Luke's).

[mrbigjas]

as an aside, i stopped by rick's today as well to sign the petition and decided what the hell, might as well get one. as i said earlier in this thread, it had been years since i had one from there, and i couldn't even remember what they were like.

and you know, it wasn't bad. i mean really. compared to the other tourist places, the meat tasted better than the last time i went to either pat's or geno's or jim's. it wasn't as chewy as geno's, and unlike the last time i went to pat's, it didn't have big chunks of gristle in it. the onions did suffer from the mass production syndrome of basically steaming from being in huge piles, but what are you gonna do.

but anyway, it was a perfectly acceptable cheesesteak, and if someone came to town for a convention or something and wanted to try one nearby, i wouldn't hesitate to say go ahead. it's not the best one in town, but as a basically decent example of the genre it totally does the trick.

also the boy loved the cheese fries.

[MarketStEl]

Once again to clarify things, MarketStEl, you are wrong.  Rick was refusing to give sales figures, but so were many other merchants.  Many of whom have not yet signed their leases.  Most, or all of the Amish are yet to sign.  They as well refuse to report sales.  Futhermore, lease payments are not in any way dependent upon sales figures (at least for the current lease.  Whether they will change the rent structure based upon the sales figures in another five years is unknown, management claims this is not to be so).  The three elements of rent are as follows:  square footage, location, and store type (purveyors, lunch, specialty items, and mixed). 

Again, lease terms are based ZERO PERCENT on sales figures.  MANY others refused to give numbers, many STILL haven't signed their lease.  So in NO WAY was Rick the last man standing. 

To continue your analogy, he has never been given a serve.  Therefore never had the opportunity to return a serve.

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Thanks for setting me straight.

Combining this info with what Vadouvan and Holly said about the purposes to which sales figures can be put, both management's desire for sales figures and the merchants' reluctance to furnish them makes sense, though.

[Holly Moore]

Did anyone else catch this quote towards the end of the Metro story?

Oliveri says he is being kicked out of the market because the board is retaliating against him for advocating for his fellow merchants. Board member Paul Madden agreed when he told the Metro the board preferred Tony Luke’s because “he isn’t Rick.”

Now, tell me how this isn't personal again?

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Out of curiosity I checked out the list of RTM board members. Paul Madden, Esquire represents the RTM's Merchant's Association. He is the sole voice of merchants on the board. I'm guessing that his quote is intended to communicate the thinking of the other board members rather than to state his own feelings.

Another news item from a CBS Channel 3 item on its web site:

A dedicated customer said the petition had security at the Market sizzling.

“I was told by security inside the Reading Terminal Market that if I signed up another person on his petition that’s inside this Terminal, that they would bar me out of the Terminal for life,” Blayney Stukes said.

Edited to ad a quote from the Evening Bulletin:

Paul Madden serves on the Reading Terminal Market board of directors and said the constituency-based board is appointed by special interest groups, like city council, the mayor's office, the Pennsylvania Convention Center and historical organizations. The board has one merchant representative.

"I was the minority vote," Madden said, the merchant representative, referring to the Rick's Steaks decision.

"Rick was on the bottom of the list. There was always a degree of resentment with the board in having to negotiate with the merchants, and it's my belief [Olivieri] paid a price for that. I find this entire situation very sad."

Edited July 17, 2007 by Holly Moore (log)

[cinghiale]

Lawyering-up begins.

[MarketStEl]

Edited to ad a quote from the Evening Bulletin:

Paul Madden serves on the Reading Terminal Market board of directors and said the constituency-based board is appointed by special interest groups, like city council, the mayor's office, the Pennsylvania Convention Center and historical organizations. The board has one merchant representative.

"I was the minority vote," Madden said, the merchant representative, referring to the Rick's Steaks decision.

"Rick was on the bottom of the list. There was always a degree of resentment with the board in having to negotiate with the merchants, and it's my belief [Olivieri] paid a price for that. I find this entire situation very sad."

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Thanks for posting the Evening Bulletin link, Holly. That paper's story offers a level of detail and context that has been missing from the reporting in the press up to this point.

What I pick up from it is that while Rick Oliveri was probably a good choice as an advocate for the merchants' interests in some ways, he was also a statistical outlier in others if my assessment of Merchants' Association Interim President Michael Holahan's quote is accurate.

Another passage in the article hints at another bone of contention, one alluded to in the earlier Inquirer story but not expressed as directly -- or in as opinionated a fashion:

[Oliveri] said that when negotiating his contract, he mainly campaigned for keeping the market's hours of operation the same, which has been a lackadaisical schedule of 8 a.m. to 6 p.m. (Patrons will often find the market closed at 4 p.m.)

That parenthetical phrase is something Paul Steinke has been fighting hard to change since taking the helm there, largely with success. I don't think that statement is accurate anymore, either, unless you are talking only about the restaurants -- and frankly, there's no good reason most of those should stay open right up to the present closing time, as the hour from 5 to 6 p.m. is really too early for the Center City dinner trade and the commuters headed home aren't interested in picking up something to eat before catching the train.

I also interpret this sentence as written as suggesting something that I think would benefit the RTM in the long term but AFAIK is not on the table at all right now, and that's extending the daily hours of operation past 6 p.m. The resident population in the vicinity is IMO large enough that the RTM's fresh food vendors could capture a share of the traffic that I see lining up in the express lane at the 10th and South Super Fresh at 6:15 pm, and that population continues to rise. I can tell you that I would be one happy customer if, instead of having to route my trip home via Upper Darby to pick up some item of produce for that night's dinner, I could just take the steps up from Market East and do it at the RTM, and I'm sure I'm not alone.

But if even Sunday hours -- which, it appears to me, cannot be considered anything other than a success, as they have attracted new business to the RTM rather than spread out existing traffic -- remain something "tentative" and "experimental" nine months out, then there is evidently some work to be done -- and if they remain tentative because Oliveri was being obstinate (something I cannot say he has been, for I do not know the intimate details of discussions), then while the action taken is unfair to Rick, it might be understandable in terms of "eliminating a roadblock." (The Amish are not a roadblock to permanent Sunday hours because it's been made clear that they will not be required to keep them.)

Not knowing what the interests are of the city's and the PCCA's representatives on the RTM board, I'm not going to speculate on what moved them to act as they did, but it does seem to me that at heart, the issue is the whole approach that I have characterized before as "mall management." It's clearly not the way the RTM had been run prior to the PCCA's acquisition of the place -- and as it had already made significant strides from its nadir at the time of the purchase, one could legitimately question whether such a departure from tradition was needed. And this being Philadelphia, where so many people are slaves to the past^W^W^W^W^Wrevere tradition, it was being questioned, apparently pointedly by at least one person.

[Holly Moore]

Steinke is locked into "Regional-Shopping-Mall" think. He is trying to drag the Reading Terminal Market into the 21st Century. He is doing it with rental formulas. He is doing it with tenant selection ie Tony Luke has more draw (magnet store) therefore get rid of a very successful lunch merchant who has been there for 25 years but doesn't have a national name. And he is doing it with operating hours - wanting all vendors to be open whenever the RTM is open.

Lunch merchants have always closed early. Market regulars know that and accept it. It makes business sense. Other than a few odd birds like myself, people eat lunch at lunch time. They don't buy lunch at 4:30 PM. There just isn't enough business at that hour to keep food fresh and to break even on the labor cost. That is the way it has been for as long as I have known the market.

If we were talking about the RTM during its bleak years I would not be so opposed to Steinke's master plan. But the market of the 1990's and the 2000's is a booming success and there is no indication that will change. What is good for a regional shopping mall may not be good for a historic and traditional market place.

The hardest thing for some ambitious managers to learn is that if it ain't broke, don't fix it. Think "new Coke." We don't need a new "Reading Terminal Market."

Again from the Bulletin Article:

"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.

Just how is the market not competitive now? It strikes me as overwhelmingly successful. The only logic supporting Feeley's statement leads to the conclusion that a McDonald's would make the market even more competitive than Tony Luke's.

In terms of the Market's mission, as I asked once before, how does replacing a long time, good standing and well respected merchant serve the market's mission. Is not honoring and sustaining the market's historic tradition a crucial segment of its mission?

Tony Luke's should be treated like anyone else wanting to open a stand in the Market. Wait until space becomes available. I'm a great fan of Tony Luke's in South Philly. It is one of my favorite Philadelphia places. And no matter how this turns out, I'll still be a fan. But I am thinking less of Tony Luke for his part in this scheme. I hope he will do the right thing and drop out of the negotiations - at least until Rick Olivieri is offered and declines a lease comparable to those offered other lunch tenants.

Edited July 17, 2007 by Holly Moore (log)

[Mano]

Lawyering-up begins.

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As of three years ago Richard Sprague was charging $10,000+ per month (it might have actually been $20,000; I know it was one or the other) to represent someone, but I have no idea what he's charging here. Sprague has numerous associates, each one handling a relatively small number of cases. He buries the opposition by filing dozens of motions, forcing them to spend big $ and generally overwhelming them. Not only that, he was the DA for eight years and is probably the most well connected lawyer in Philly. When he goes to court, he always has at least two associates with him. The guy must be around 80 but he's amazingly savvy.

I wish Rick Oliveri the best of luck.

Edited July 17, 2007 by Mano (log)

[Holly Moore]

If Rick's attorney needs some pro bono photocopying, etc., I'll do it. We do legal copying all the time.

Wonder why the RTM had to hire such a big time lawyer? Wonder if that is the best use of Reading Terminal Market funds?

Edited July 17, 2007 by Holly Moore (log)

[Mummer]

Wonder why the RTM had to hire such a big time lawyer?

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The fastest gun in the west draws quite a line in the sand...

How's that for mixing metaphors?

[jmbrightman]

Wonder why the RTM had to hire such a big time lawyer?  Wonder if that is the best use of Reading Terminal Market funds?

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if you have the cash, you hire the best. winning is never a bad use of funds.

[Holly Moore]

As I see it hiring Attorney Sprague demonstrates RTM's management's uncertainty over the outcome of Rick's Steaks' challenge or recognizes the validity of Rick's stand or both. Would/did RTM hire such a high-powered attorney if Franks-A-Lot had challenged their eviction? If this is such a cut and dry case could not their traditional attorney handle it?

As to having the cash, the RTM board has a fiduciary responsibility to spend a not-for-profit organization's funds judiciously. I'd question whether hiring one of the most expensive lawyers in the city for a landlord v. tenant dispute is the best use of their funds.

[KatieLoeb]

Sprague is a big shark all right. RTM must be pretty nervous to have called in the big bazookas right outa the gate.

[Mano]

As to having the cash, the RTM board has a fiduciary responsibility to spend a not-for-profit organization's funds judiciously.  I'd question whether hiring one of the most expensive lawyers in the city for a landlord v. tenant dispute is the best use of their funds.

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Believe it or not, hiring the absolute best lawyer, who may charge top dollar is often most cost-effective. They function like a well-oiled machine and know exactly how to get things done and in the most expedient manner. In the end, you may end up spending the same amount of money, or even less, than you would if you hired an "average" lawyer, and with a lot less hassle.

Of course, there are many exceptions, and I have no idea if Sprague practices that way.

Edited July 18, 2007 by Mano (log)

[rlibkind]

No matter what your views on the basic issue, why should RTM hire a second-rate attorney? Sprague gets results. Just ask the Inquirer.

I doubt RTM is nervous on any legal grounds: while one can debate the wisdom of RTM's decision not to offer Rick a new lease, nothing I've learned through the press and in talking with some of the principals leads me to believe there are any grounds under which a court would order RTM to grant a lease. For good reason Rick and his attorney have tried to make this a PR case, not a legal case: they are unlikely to prevail in court. Hiring Sprague tells them RTM's board is firm in its position and will not cave to a PR onslaught. This will cause Rick's attorney (and Rick) to reassess the likelihood of legal success and the costs of trying. RTM hired the big gun as an effort to avoid the expense, delay and uncertainty of a trial, not a sign of weakness.

[Mummer]

Saturday is "Save Rick's, Save The Market Day."

Check the "news update" section at philly.com - perhaps there will be a more reliable url later...

Edited July 18, 2007 by Mummer (log)

[serpentine]

Lunch merchants have always closed early. Market regulars know that and accept it. It makes business sense. Other than a few odd birds like myself, people eat lunch at lunch time. They don't buy lunch at 4:30 PM. There just isn't enough business at that hour to keep food fresh and to break even on the labor cost. That is the way it has been for as long as I have known the market.

"Market regulars" who have time to adhere to the unwritten rule of lunch hours are undoubtedly appreciated by the merchants, but there are plenty of people who live in the city who just don't bother with RTM because of the (often accurate) perception that it closes early and the lunch merchants are always running out of food. Myself included, to some extent -- I get tired hiking eight blocks to the market at noon to find out that once again, DiNic's is out of roast pork. (Which is my only complaint about DiNic's very wonderful sandwiches.)

The Market is situated right behind the Convo. Ctr. and an ever-expanding clutch of hotels. Having attended my fair share of conventions, I'll tell you that attendees eat lunch when they get the chance to eat, be it 10:30 am, 1:00 pm, or 3:30 pm. As it stands, of course, there's no way for me to demonstrate this assertion regarding the feeding habits of conventioneers. The current post-lunch traffic is based on the current status quo. And if the lunch merchants decided en masse to extend their hours tomorrow, it would still take a couple of years for momentum to build.

I think that the RTM's actions regarding Rick Oliveri's lease are pigheaded (pun sorta intended.) But if the merchants want people to bother to eat and shop at the Market, there needs to be a critical mass of vendors open during the posted hours.

[Holly Moore]

Big time lawyers may be hired because they are the most efficient or have the most intimidation power. Or they could be hired because the defendant has a lot of money to spend (think dream team) and the defendant is guilty, guilty, guilty!

Edited July 18, 2007 by Holly Moore (log)

[Bluehensfan]

Next Saturday is Save the Market Day starting at 10:00 AM (from the Inquirer:)

Breaking News

Posted on Wed, Jul. 18, 2007

Reading Terminal merchants rally behind Rick's

The Reading Terminal Market Merchants Association has designated Saturday as "Save Rick's, Save The Market Day" in support of the beleaguered steak sandwich vendor, Rick Olivieri.

There will be a news conference at 10 a.m. at Rick's Steaks. Speakers include past and present merchants and members of FORM (Friends of Rick's and the Market), Olivieri said.

On June 28, the market's management told Olivieri that, after 25 years, it would not renew his lease and that he must leave the market by July 31. Market officials said the move was to bring a new face to the market.

Olivieri says his eviction is retaliation for years of lease talks when he served as president of the Merchants Association.

"After 25 years in the building, and having one of the busiest stores in the market, [the eviction] came out of the blue," said Olivieri.

T-shirts, hats and buttons will be sold to raise funds for Olivieri's legal defense.

The Merchants are demanding a new lease with Rick's Steaks be negotiated, said Olivieri, the self-proclaimed "Prince of Steaks," and grandson of Pat Olivieri, who opened Pat's King of Steaks at Ninth and Passyunk in 1930.

Edited July 18, 2007 by Bluehensfan (log)

[Mummer]

"After 25 years in the building, and having one of the busiest stores in the market, [the eviction] came out of the blue," said Olivieri.

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If I were in this situation, I'd be thinking of spending my time in Tahiti rather than in court.

[monavano]

I checked out the Rick's website and there is no mention of his pending ouster from RTM. I'm glad to hear there is a growing groundswell of support with organized events and media coverage. Hopefully it will lead to the story being picked up in markets outside the city and add to the cause to keep Rick.

Has anyone thought of taking the petition to the internet?

Edited July 18, 2007 by monavano (log)

[MarketStEl]

"After 25 years in the building, and having one of the busiest stores in the market, [the eviction] came out of the blue," said Olivieri.

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If I were in this situation, I'd be thinking of spending my time in Tahiti rather than in court.

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A chacun son gout, Charlie.

I've been in this city as long as Rick's been at the Market, and it's been almost that long since my first freelance article in Philly appeared in the pages of PGN. I have no plans, or desire, to chuck my keyboard and sheath my pen anytime soon. In fact, I hope to be doing what I enjoy doing still when I'm 70.

I get Rick's sentiment exactly here.