Cobo's Pizza Outlet-- pushed out?

[kraig]

The Pizza people had a 30-year sweetheart deal that they got from Coleman A. Young of well-below market monthly rent with never an increase ever. Those days got over because the Authority cannot afford to take a $20 million bath every year - as the City did - for operating Cobo. Cobo must very shortly operate from its own income without any sort of state subsidy. Changes have to be made to make sure Cobo can keep its doors open and grow.

The pizza operation also was unwilling to show their recipts, to account for their volume, etc. instead of cooperating, they ran to City Council and complained about being harrassed when they were in reality only being held to a real-life business model.

Since you appear to have some inside knowledge, I have a question that you may be able to answer. Was Simon's Pizza in compliance with their lease?

[SWMAP]

Well, that is a question that each side would answer differently. The bottom line is that Centerplate did not renew the contract that ended on June 8, 2011. They did send a notice, as required in May.

[kraig]

Well, that is a question that each side would answer differently. The bottom line is that Centerplate did not renew the contract that ended on June 8, 2011. They did send a notice, as required in May.

Since, on some levels, it appears to be an income issue. I'm wondering whether Simon's Pizza had refused to pay the new lease amount or had violated any aspects of their lease that would warrant not renewing their lease. Of course, it appears that the agreement reached between Centerplate and the Authority grants Centerplate the discretion to not renew the lease. In which case, Simon's Piuzza is out of luck. Too bad.

[Locke09]

Out of the owners own mouths, they have stated that when their monthly lease was to go from $1200 to $9000, they ultimately agreed to that amount, even though they thought it excessive. Even the news article I read questioned whether $9000 seems excessive for the small amount of square footage they lease.

They state that they were asked what were the 10 top selling items on their menu. When they told Centerplate, Centerplate removed those items from their menu and gave them to someone else to sell instead. They reported that Centerplate would actually go into their cash register at the end of the day and remove funds.

Out of curiosity, because I don't know, is it a common business model to have to tell someone you are leasing from what your volume is, or should they just be concerned with you making your lease payments?

I also have not heard that City council got involved in this at all. When did that occur?.

I think this little Mom and Pop company does not fit the image that Centerplate tries to project. I suppose they have a right to determine what image gets projected if they have been given a contract to manage something. But because an entity has a "right" to do something does not mean that it should go unchallenged.Reading between the lines, I imagine Centerplate deceptively siphoning off Simon's Pizza's best items, knowing they were not going to renew their lease. Then offering them the space at an exorbitant increase, hoping they wouldn't accept it and Centerplate wouldn't have the bad press of forcing them out. When they accepted the lease amount then Centerplate said, "Well we're not offering you a new lease after all."

That's the story Simon's Pizza appears to be telling. Since there is now a lawsuit maybe we will find out what actually happened.

I'm interested in what's going to happen to the cost of things at Cobo. Lower rates for people holding events while the revenue is made up from higher concession costs? Higher costs overall? I recall the high costs at cobo have long been decried as causing the facility to have fewer events. It will be interesting to find out what the costs of items similar to those Simon's Pizza sold become after they are replaced, or after their items get dispersed among other vendors there.

[Locke09]

P.S. Cobo has undergone extensive scrutiny over the past few years for pay-to-play and other corruption. In all that time, Simon's Pizza has not been mentioned as being a party to anything unscrupulous. So it is incredibly unfair to try and make it seem as though they were party to any sweetheart deals or friends and family or other schemes.

[daniel_duggan]

The folks at Centerplate have put out a little more info on their side of things. The Simons, also, have filed a Federal lawsuit on this issue:

http://www.crainsdetroit.com/article...FREE/110609885

[Hypestyles]

uh, just what other vendors are in cobos that serve hot food? are they open every day or just for the special events?