Another Eastern Market restaurant is preparing to close this year amid a bitter dispute with landlord Sanford Nelson. Russell Street Deli, a soup and sandwich icon in the popular food district, will close its doors on September 28, the Detroit Free Press reports.
Investors Linden Nelson and Sanford Nelson purchased properties housing Russell Street Deli, Mootown Ice Cream, Zeff’s Coney Island, Supino Pizzeria, and Bert’s Marketplace last year for $21.6 million. Since then, Sanford Nelson has gone on to make other major property investments in the area and has quickly emerged as one of the most powerful stakeholders in the market.
Nelson has insisted along the way that he wishes to maintain the quality of the market and its unique mixture tenants; however, several major business closures in Nelson’s properties over the past year have raised concerns in the Detroit community about his management of the properties. In recent weeks, Mootown Ice Cream and Farmers Restaurant have both shutdown. Other businesses such as Eastern Market Antiques are expected to close sometime this year to allow Nelson’s firm to make necessary repairs to the building, though they may find a home elsewhere in the district.
The latest restaurant conflict stems from a disagreement over Russell Street Deli’s building maintenance and who should foot the bill. Russell Street Deli co-owner Ben Hall tells the Free Press that he met with Nelson in January. During the meeting, he alleges that Nelson offered to honor his current lease and handle any “deferred maintenance.” Hall says he then informed Nelson that the deli’s floor was “really soft” and needed repair. Hall further claims that Nelson blamed the damage to the floor on Russell Street and demanded that the business pay for the roughly $50,000 in repairs. An inspection of the Russell Street property by Detroit Buildings, Safety, Engineering and Environmental Department on April 12 based off an anonymous complaint about the floor found that the issue had been resolved, according to Crain’s.
According to Hall, Russell Street holds a lease from the previous landlord in which the restaurant pays $1,700 a month through 2021 and less than $2,000 per month up to 2026. However, due to the repair costs, Nelson tried to negotiate a different lease with Russell Street. In one proposal, Nelson requested $6,000 per month for a year to cover the cost of the floor maintenance. The landlord alternately proposed that Russell Street pay $3,704 under a new five-year lease. Russell Street’s owner further claims that Russell Street lost approximately $3,000 when it closed down for a day under the guise of the property manager’s scheduled maintenance and the workers never showed up.
Hall provided audio recordings of conversations between himself and Nelson to news outlets including the Free Press and Crain’s in order to corroborate the events of his story. A representative for Sanford Nelson confirmed to Eater through email that the landlord’s conversations with Hall were recorded “without his knowledge.” Because Nelson’s team has not heard the recordings and they “may have been edited,” the rep writes, and therefore Nelson, “can’t fully attest to the content.”
After consulting with his staff about options, Hall and his business partner decided to close up operations at Russell Street Deli this fall. Several options for relocating the deli have been floated but there’s no firm plans. Some of the staff will be able to continue working at Russell Street Deli’s growing retail soup business.
Eater reached out to Nelson directly for comment and requests were redirected to representatives for his company Firm Real Estate. A rep from Firm forwarded the following statement:
This is the very first we are hearing of a potential closure of Russell Street Deli. We have never wanted them to close and, from the very beginning, have sought to resolve the matter in good faith. At every turn, they have refused to work with us to come to mutually beneficial agreement to address this important safety concern.
The matter in question involves safety issues caused by the Deli’s failure to address key maintenance matters over several years, creating a safety concern. Per the lease they agreed to in 2007, which remains in effect until 2021, these repairs are their responsibility. We care deeply about the security of anyone who enters our buildings and are committed to ensuring facilities are well-maintained and up to code for the safety and security of all.
• Russell Street Deli Closing in Eastern Market Over Dispute With Landlord [Freep]
• Eastern Market’s Russell Street Deli Says It Will Close Over Repair Dispute With Landlord [Crain’s]
• All Russell Street Deli Coverage [ED]
• All Closings Coverage [ED]