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Scotty's dispute flares up: City puts conditions on deal with downtown restaurant over lease, unpaid utilities


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With the demise of CDI and lease transfers for businesses in The Commons, Scotty's Burger Joint is contesting utility and construction cost payments. Midday patrons at Scotty's Burger Joint in The Commons Monday September 17, 2012. (Joe Harpring | The Republic)
With the demise of CDI and lease transfers for businesses in The Commons, Scotty's Burger Joint is contesting utility and construction cost payments. Midday patrons at Scotty's Burger Joint in The Commons Monday September 17, 2012. (Joe Harpring | The Republic)


The owner of Scotty’s Burger Joint said he’s being portrayed unfairly by the Columbus Redevelopment Commission as the bad guy refusing to pay utility bills in an ongoing dispute that also involves reimbursement of construction costs.

The commission Monday voted to pay $21,021 of the $25,521 Mert Shipman says he’s still owed for extra construction costs of his retail space in The Commons, near Fourth and Washington streets. An extra $46,303 was incurred in costs because of problems installing the ventilation system, but he previously was reimbursed $20,782.

However, the commission set conditions for the payment. It first wants Shipman to pay $28,762.44 for unpaid electric, water and sewer bills, and reassign his lease from Columbus Downtown Inc. to the redevelopment commission. And, he must do both within 15 days or he’ll be notified that he’s broken his lease and termination of his lease will proceed.

Mayor Kristen Brown has been working to shut down CDI, a private company created under the previous mayoral administration to act on behalf of the public redevelopment commission. CDI acquired property, negotiated agreements and signed leases but used taxpayer money out of public view.

Brown said at the meeting she disliked that CDI’s private setup allowed Shipman to use his own construction company, Delta Construction, to do the work on his space rather than conduct a competitive bid process.

“Columbus taxpayers have already paid Mr. Shipman’s own construction company more than $358,000 to (construct) Mr. Shipman’s restaurant. This was an act of the last administration through their private corporation, Columbus Downtown Inc., by which officials circumvented the public access and public bidding laws,” Brown said Friday.

“Mr. Shipman has since presented the taxpayers with additional bills for more than $40,000 of additional tenant (construction) costs and other restaurant-specific expenses even though there was no pre-approval of these expenditures by the city of Columbus or Columbus Downtown Inc.,” she said. “We’ve agreed to pay for the vast majority of these expenses in the interest of settling the dispute, even though we have no legal obligation to. Mr. Shipman has benefited tremendously from the generosity of the Columbus taxpayers who have paid for the (construction) of Mr. Shipman’s restaurant by Mr. Shipman’s construction company.”

Three of the four restaurants in The Commons have reassigned their leases from CDI to the redevelopment commission; Scotty’s, so far, has not.

“We’re trying to end it, trying to get it finished, a clean slate, and he’s kind of resisting. Whatever we’ve proposed, he doesn’t want to accept it,” commission member Frank Jerome said at Monday’s meeting.

“Until we have some type of settlement, he’s going to hold our utilities hostage,” commission member Steven Scgalski said at the meeting.

Shipman said that’s not the case.

He said Wednesday he doesn’t dispute that he owes money for utilities, and he is willing to pay. The problem, he said, is that two months ago he was given a bill for a year’s worth of utilities that have not been metered correctly.

“You can’t give us a bill for a year and say this is what it is,” Shipman said.

Metering problems for the restaurants in The Commons have made it difficult to know exactly how much of the utilities each establishment has used, he said. And, the statements given to him are not detailed enough to show if the bills are accurate, Shipman said.

“We’ve had multiple conversations with Mr. Shipman explaining Scotty’s utility bills, and we’ve put him in touch with the appropriate city employee who could give him any detail he wanted, including the official meter readings,” the mayor said Friday. “We’re happy to get Mr. Shipman official utility readings so that he is comfortable with his bill.”

Shipman said he would like this ongoing issue resolved so he can pay his utility bills.

“We agree we owe it, but we’re trying to figure out the details,” Shipman said.

Jerome said while it’s true Shipman didn’t receive a bill until two months ago, he knew his contract required him to pay utilities.

“He had just let it ride,” Jerome said Friday.

Stan Gamso, the attorney for the redevelopment commission and CDI, suggested Shipman be sent a letter explaining that he’s broken the terms of his lease because he’s known for two months about the money owed.

Puccini’s Smiling Teeth, a restaurant next door to Scotty’s in The Commons, had the same utility metering problems but is paying what it owes, Jerome said during the meeting.

“They did make payment arrangements,” Susan Thayer Fye, head of CDI, said at the meeting.

“Puccini’s is handling it. Scotty’s is the one doing nothing,” Jerome replied.

Shipman said he’s turned all the bills over to his attorney to resolve.

He said he believes the dispute can be resolved but is disappointed with the way the city is handling it, just as it is with the delays in finishing the Fourth Street improvement project.

Shipman said Sharon Renfro, who previously managed the restaurant leases on behalf of CDI and the redevelopment commission, knew about the construction costs and agreed they be paid.

Shipman said he and other downtown business owners received assurances from the city the Fourth Street project would be finished by certain dates, which have not been met.

Work began Sept. 4. The contractor originally targeted Nov. 7 as the completion date, but now is planning to be finished next week.

Shipman previously said that the ongoing work was costing him $20,000 per week.

Brown said Fourth Street construction is still on schedule to meet the Indiana Department of Transportation’s deadline of Tuesday.

Jerome disputes Scotty’s is as affected by the Fourth Street project as much as many other businesses, including Puccini’s.

“I ate at The Garage this week and the dust from the limestone on (Fourth Street) was everywhere,” Jerome said.

Jerome said the ongoing dispute is the result of poor planning by many people, including the architect of The Commons, and contractor’s errors. The commission is trying to resolve problems created before the current commission members took office, so everyone can move forward.

“It is the need to resolve these last details so we can close CDI that has allowed more money to be offered than maybe should be. We have tried not to nitpick every bill. We could have taken the position to pay none of it and wait for the attorneys to be involved,” Jerome said. “The CRC has bent over backward to try to get this resolved, but there is a limit.”

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