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Market’s retailers under the gun

Faneuil Hall shops facing evictions

City-owned Faneuil Hall Marketplace is run under lease by General Growth Properties, which recently exited bankruptcy. City-owned Faneuil Hall Marketplace is run under lease by General Growth Properties, which recently exited bankruptcy. (John Tlumacki/Globe Staff/File 2008)
By Jenn Abelson
Globe Staff / February 9, 2011

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General Growth Properties Inc., which runs Faneuil Hall Marketplace, is cracking down on struggling tenants, including beginning eviction procedures against Todd English’s Kingfish Hall restaurant after it fell behind by tens of thousands of dollars in rent, according to shop owners and court records.

The Chicago mall operator has put Bill Rodgers Running Center, one of the original tenants, on notice of default for overdue rent.

General Growth also demanded that Bombay Club vacate its space last month after the Indian eatery — a tenant for 11 years — failed to pay back rent before its lease expired.

Henri’s Glassworks, a marketplace merchant for about 13 years, says it was forced out in January because General Growth would not budge on a new lease agreement that called for a 60 percent rent increase.

Nicole Spreck, a General Growth spokeswoman, declined to comment on lease agreements, but said: “Our retailers are important to us.’’

Merchants at Faneuil Hall Marketplace have been at odds with General Growth for years over concerns the company has squeezed out unique regional businesses in favor of national chains that are willing to pay higher rents. The marketplace is owned by the City of Boston, which leases out three of its four buildings — Quincy Market, North Market, and South Market — to General Growth. The Chicago company’s scrutiny of local shop owners appears to have intensified since General Growth emerged recently from bankruptcy protection and hired a new chief executive.

“The merchants have continued to pay GGP and to meet their obligations through GGP’s difficult economic times, and now that GGP has come through bankruptcy, they have shown no willingness to work with the merchants,’’ said Adam Cohen, a lawyer representing the Faneuil Hall Merchants Association. “It seems that GGP is strictly in a collections mode, with no consideration for the merchants that have made this property what it is.’’

In a statement, celebrity chef Todd English said: “We have been in this historic Boston location for 10 years and amidst the tough economy, business has been waning. We have been in discussions, trying to work with the owners to re-concept our location for several months now, and that process is ongoing.’’

Kingfish Hall, which is at least $30,000 behind in rent, according to court documents, is the latest restaurant in English’s empire to show signs of strain. He has confronted at least five lawsuits over claims of unpaid bills and shuttered several eateries in recent years. English’s flagship Olives, the Charlestown dining spot where he made his name two decades ago, closed in May after a grease fire caused an estimated $200,000 in damage.

English said he has reached out to city officials about the troubles at Faneuil Hall and plans to meet with them to discuss ways to “reinvigorate this important Boston landmark with businesses and attractions that are unique to our City.’’

A hearing on the eviction proceedings is scheduled for next week.

Some merchants have raised concerns about General Growth’s new chief executive, Sandeep Mathrani, who previously worked for Vornado Realty Trust. He was part of the team of developers involved in the stalled project at the former Filene’s site, which has left a gaping hole in the middle of Downtown Crossing.

“The new management has come in with hardball attitudes,’’ said Charlie Rodgers, who operates Bill Rodgers Running Shop with his famous marathoner brother, Bill Rodgers. “They ought to be a little more flexible. It’s very rugged out there for merchants.’’

Charlie Rodgers said he received a default notice several weeks ago demanding that his three months of outstanding rent be paid in 10 days. In past years, he said, managers have allowed seasonal businesses several months to catch up, particularly during tough economic times.

“We barely make enough to meet payroll and health insurance in the winter,’’ Rodgers said. “But we go bonkers with the marathon in April and can pay our bills.’’

Rodgers said he is trying to pay off some of the debt and is seeking assistance from the city to avoid eviction.

“I’ve been here 30-plus years. How could something like this be happening?’’ Rodgers said. “It’s ridiculous.’’

Brenda McKenzie of the Boston Redevelopment Authority said the city plans to hold a meeting in March to inform Faneuil Hall shop owners of government assistance programs.

“There’s certainly opportunity for enhancement for General Growth in working more collaboratively together so we can keep the tenant mix that makes the marketplace special,’’ McKenzie said.

But some merchants are disappearing almost overnight.

Vinod Kapoor, owner of Bombay Club, said he had been in discussions for seven weeks over a new lease but General Growth would not offer one until Kapoor paid off three months’ overdue rent. Kapoor was unable to borrow money to pay off the past-due rent unless he had a new rent agreement in hand to show potential investors. Three days before his lease expired, Kapoor received a notice from General Growth informing him the restaurant had to move by Jan. 31.

“I thought they were joking. I believed we were making progress on a new lease,’’ Kapoor said. “I was shocked. But we left.’’

Even though Henri Rozenberg, owner of Henri’s Glassworks, was up to date on rent, he had to shutter his business last month after General Growth was unwilling to offer a reasonable lease agreement.

“They didn’t want to negotiate,’’ Rozenberg said. “They wanted me out.’’

Jenn Abelson can be reached at abelson@globe.com.

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