Downtown restaurant owner Mert Shipman has spent the past year haggling with city officials about thousands of dollars he says are owed to him.
Now the city wants his cooperation to alter the lease he signed with Columbus Downtown Inc., which is being disbanded. But Shipman isn’t ready to comply until his concerns are fully addressed.
Adding to his frustration, he said, are losses of $20,000 in bar and food revenues each week during the first month of construction in front of his restaurant at the corner of Washington and Fourth streets.
“It’s a complete nightmare,” said Shipman, owner of Scotty’s Burger Joint.
Shipman said about $25,000 in cost overruns for construction of his restaurant’s space needs to be reimbursed. A cost for the buildout was negotiated through CDI, but problems installing ventilation systems led to higher costs.
Also, lingering problems with utility bills need to be resolved, Shipman said.
The transfer of the leases for the four restaurants in The Commons — Scotty’s Burger Joint, Puccini’s Smiling Teeth, Snappy Tomato Pizza and Subway — has been part of a larger effort by Mayor Kristen Brown to shift all properties and leases to the Columbus Redevelopment Commission, a public agency within city government.
The leasing had been controlled by CDI, a private entity that operates outside of public scrutiny. CDI was created by the redevelopment commission under the administration of Mayor Fred Armstrong to develop downtown by making agreements, acquiring property and signing leases.
But Brown, who campaigned this past year on transparency in government, wants taxpayers to see how public money is spent.
The leases for Scotty’s, Puccini’s, Snappy Tomato and Subway are controlled by CDI, but their owners have agreed to the lease transfers. However, Shipman said he wants the problems corrected before allowing the Scotty’s lease to be transferred.
Construction of the space for Scotty’s resulted in about $46,303 in costs beyond what was negotiated because of challenges with installing ventilation systems, said Susan Thayer Fye, who was chosen this year by Brown to head CDI. The design of The Commons prevented exhaust shafts from exiting directly above the restaurant because that’s where the Nugent-Custer Performance Hall sits, she said.
Shipman paid the extra costs to keep the restaurant project moving forward, he said, but has been seeking reimbursement for about a year.
“We incurred a lot of costs just to get the restaurant open,” Shipman said.
At the end of last year, $22,000 remained to be reimbursed, Fye said.
The Commons Board agreed earlier this year to pay an additional $11,210 of the cost, but only as a credit toward a utility bill that Scotty’s owes, Fye said.
A utility bill credit still would leave nearly $11,000 to be paid. But which party is on the hook for the remainder, such as CDI or the redevelopment commission, is unresolved.
Shipman, however, said he’s still owed the $22,000 because he doesn’t want a credit on his utility bill.
He said a credit isn’t acceptible for accounting reasons. Delta Construction, which Shipman owns, did the buildouts for Scotty’s and Puccini’s. The cost overrun bill and the utility bill need to be separate, Shipman maintains.
The restaurants have had problems with how electric, water and sewer costs are metered, Fye said. They were not split to provide individual bills to each restaurant, and readings of them have not been conducted properly, she said. That’s caused confusion about who owes what amount.
“I’m sure we’re going to get things worked out. ... We want to be down there (in The Commons),” Shipman said.
Restaurant lease rates
Here are amounts the four restaurants in The Commons have agreed to pay monthly and annually in rent.
Scotty’s Burger Joint: $6,888.75 per month, $82,665 per year.
Other lease details: 5,511 square feet. Five-year lease with four options to renew for five years each, with 4 percent increase for each renewal. Property taxes not to exceed 75 cents per square foot.
Puccini’s Smiling Teeth: $3,573.33 per month, $42,879.96 per year.
Other lease details: 2,680 square feet. Seven-year lease with four options to renew for five years each with 4 percent increase each renewal period. Property taxes not to exceed 75 cents per square foot.
Subway: $2,700 per month, $32,400 per year.
Other lease details: 1,249 square feet. Five-year lease with three options to renew at five years each with 5 percent increase each renewal period. No cap on property taxes. Pays operating expenses of $3,747 for The Commons the first year, and adjusted annually thereafter.
Snappy Tomato Pizza: $1,500 per month, $18,000 per year.
Other lease details: 678 square feet. Five-year lease with three options to renew for five years each with 5 percent increase for each renewal. No cap on property taxes. Pays operating expenses of $2,061 for The Commons the first year, $3,390 the second year and with a 5 percent increase for the third, fourth and fifth years.
The leases will generate $175,945.44 per year starting in 2013 when Subway and Snappy Tomato begin paying a full year’s rent. Those restaurants opened this year; Scotty’s and Puccini’s opened last year.
Source: Susan Thayer Fye, president of Columbus Downtown Inc. board of directors