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Management deal severed with Scotty's restaurant owner


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Scotty's Burger Joint customers fill the restaurant's outside dining area in August in downtown Columbus. 
PHOTO BY ANDREW LAKER
Scotty's Burger Joint customers fill the restaurant's outside dining area in August in downtown Columbus. PHOTO BY ANDREW LAKER


Mert Shipman, who holds a five-year lease to operate a Scotty’s Burger Joint bar and restaurant in The Commons, has terminated an agreement with restaurateur Scott Wise to manage the downtown operation.

The lease for the space in The Commons was just reassigned to the Columbus Redevelopment Commission on Monday evening. The lease for the 5,511-square-foot space is for $82,665 a year with an option to renew the lease four times.

City officials Wednesday said Shipman’s lease is specifically for a Scotty’s restaurant and any other use of that space would have to be renegotiated with the Columbus Redevelopment Commission.

In a Wednesday night announcement, A Pots & Pans Production, parent company to the Scotty’s restaurant chain, said its agreement with MSCB Group LLC, operated by Shipman, was terminated. The Scotty’s company did not hold any ownership interest or equity in the Columbus location.

Commons contract

According to a lease signed June 6, 2011 for restaurant space in The Commons, the intention was for:

“... the purpose of creating and operating a ‘Scotty’s Greenhouse’ restaurant on the property. In general terms and for reference, several establishments, each operating under the ‘Scotty’s Greenhouse’ brand, are currently located throughout Indiana. Each such establishment serves food and they may accurately be characterized as “chain” restaurants. Such an establishment is of the specific nature contemplated by the term “restaurant” as that term is used in the sublease.”

“At this point we are not really sure what is going to happen with that location,” said Rachel Redwine, spokeswoman for Pots & Pans Production. “We were contracted by a management company to handle the management, to run those day-to-day operations.”

Pots & Pans has requested it be allowed to continue operating the restaurant through Dec. 30 but had yet to get a response, according to a press release posted on the Scotty’s website.

“The last thing we want during this holiday season is to financially impact the people who are the heart of our business and have loyally given their all in running our day-to-day restaurant operations,” Wise, CEO of A Pots & Pans Production, said in the press release.

Shipman could not be reached for comment Wednesday night.

Mayor Kristen Brown said Wednesday night’s development came as a surprise to her.

Just Monday, the Redevelopment Commission received the lease reassignment from Shipman that transferred his restaurant lease from CDI to the Redevelopment Commission. CDI is the nonprofit company used by the previous administration to negotiate contracts with restaurants in The Commons and Fourth and Jackson streets garage.

The city also recently worked out several disputes with Shipman about the details of payments for outfitting the space and for back utility payments. Shipman paid $28,762.44 in utility bills and the city paid $21,021 to Shipman for the preparation of the real estate space.

In October, Shipman told The Republic that the construction project revamping Fourth Street was costing Scotty’s about $20,000 in restaurant receipts a week. The work closed Fourth Street for more than three months, caused parking problems and reduced downtown foot traffic.

Susan Fye, a member of the Columbus Board of Public Works and Safety and the president of CDI, negotiated the lease reassignment, which arrived about 15 minutes before the start of Monday’s meeting.

“We did make it clear to Mr. Shipman that if he wanted to change his lease away from Scotty’s that he would need to come to the Redevelopment Commission and present a concept for a replacement restaurant so that it would be acceptable to be located next to the (Commons) playground,” Fye said Wednesday night.

Fye said that while combing through the contracts negotiated by CDI under the previous administration, she knows of no guidelines that would require a particular type of restaurant in that space.

However, redevelopment commissioners would have to review any proposal while considering the proximity of the playground and the public space in The Commons next door, where weddings and cultural events are held, Fye said.

The redevelopment commission meets on the third Monday of each month. According to that schedule, its next meeting would be Jan. 21.

Restaurant timeline

April 2011

Columbus Downtown Inc. selected Scott Wise, the owner of the chain of Scotty’s restaurants, as one of the first announced tenants of the new Commons.

May 2011

Columbus Redevelopment Commission announced plans to borrow $1 million to build restaurant spaces in the new Commons and to outfit the Indiana University Center for Art & Design in the former Commons Mall.

June 2011

Columbus Redevelopment Commission approved giving $633,000 to CDI to prepare the retail spaces in The Commons. The commission also recommended that Mayor Fred Armstrong recommend the Scotty’s restaurant receive one of the city’s three-way liquor licenses, allowing the sale of beer, wine and spirits.

November 2011

Scotty’s Burger Joint opened.

January 2012

Mayor Kristen Brown takes office and begins moving the leases held by CDI to the Redevelopment Commission.

October 2012

Mert Shipman, holder of the lease for The Commons space, said the Fourth Street construction project was costing him $20,000 a week in reduced restaurant receipts.

November 2012

Shipman said the city owed him $25,521 for extra construction costs for the space in The Commons. The city said Shipman owed $28,762.44 for unpaid electric, water and sewer bills and had yet to reassign his lease from CDI to the Redevelopment Commission. The city gave Shipman 15 days to comply or face eviction.

Monday

The lease for the Scotty’s space in The Commons was reassigned to the Redevelopment Commission.

Wednesday

Shipman severs the management agreement with A Pots & Pans Production to operate the Columbus Scotty’s restaurant.

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