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Congress Theater owner evicts Portage Theater tenants, legal struggle continues

Portage_Theater

The Portage Theater.

For more than six months, The Congress Theater has been battling city authorities over claims of unsafe conditions. Now, the theater’s owner, Eddie Carranza, is involved in more litigation as he moves forward to evict the current operators of the Portage Theater.

On Sept. 7, in the midst of the Deleterious Impact/Public Nuisance hearings over the Congress Theater, Carranza purchased the Portage Theater at 4050 N. Milwaukee Ave., issued an eviction notice to the current tenants Sept. 21, and was granted possession of the Portage on Nov. 21, according to court documents.

Members representing the Portage and Carranza declined to comment on the Nov. 21 hearing.

The Portage opened in December 1920, the first theater in the area built specifically for movies with 1,938 seats. In recent years, the theater has become increasingly expensive to maintain. Current owner David Dziedzic and the management team were unable to continue to run the theater themselves because they were behind on rent payments, though their lease runs through 2015, explained Thomas Raines, a lawyer representing Carranza and the Congress Theater.

“They’re $103,000 behind on their rent,” Raines said. “We’ve asked them for any sort of plan with respect to how they want to get caught up on the back rent.”

Representatives from the Portage Theater declined to comment on the back payment of rent.

The Chicago Tabernacle had bid $2.5 million to buy the venue earlier this year to turn it into a church, but that plan was opposed by community groups and Ald. John Arena of the 45th ward, explained Owen Brugh, Arena’s chief of staff.

“The issue with Chicago Tabernacle was that, being a church, there are certain restrictions on what type of liquor licenses and what type of public place of amusement licenses you can have near that,” Brugh said.

Brugh explained that a church is unable to have surrounding businesses with liquor or public place of amusement licenses, destroying the opportunity for new restaurants or bars to come into that portion of Milwaukee.

“We had several business talking about coming to that particular block of Milwaukee Avenue who basically said that if the Church comes, we will not,” Brugh said. “It would have taken a particular blow to our efforts to redevelop.”

Brugh said it was important to Arena to keep the Portage Theater a part of the community because of its history in the neighborhood. However, Brugh said Carranza purchased the theater with an offer they couldn’t refuse, promising to simply redevelop the venue to be able to screen both live shows and films.

Brugh, Carranza, Raines and Arena, among others, discussed the payments the Portage owed. Brugh said Carranza and his lawyer promised they weren’t going to pursue an eviction of the current tenants.

“[Raines] promised he was going to work with the current tenants to help Carranza establish a proven track record of responsible management as a liquor license holder and a venue operator,” Brugh said.

 Two days later, however, Carranza served an eviction notice to the unsuspecting owners.

“I don’t know what happened between him and the operators of the Portage Theater in those two days,” Brugh said. “I know that nothing happened between him and us in those two days. So it’s perplexing to us to say the least what changed that caused the sudden change in the part of Mr. Carranza.”

Arena sent a strongly worded statement to the community Sept. 22 after the event, stating “Carranza lied to me, and he lied to the community… He is not a man of his word.”

Raines said that the current owners of the Portage asked for the back rent to be forgiven as they claimed to have made improvements to the building, and though Raines said the lease stated they weren’t allowed to offset rent for services, he said they would consider it if they could show evidence of payments.

“We told them we would consider [to forgive the back rent] if they could show us receipts for the work they did, but they have not been able to produce any of that,” Raines said. “We’ve made them an offer to buy their business, they’ve demanded an amount far in excess of what the business is worth, so it appears we are going to actually start the eviction process.”

Raines said the theater managers were s asking to reduce their rent in 2013 from the lease amount to about 40 percent of what they currently pay.

With Carranza evicting the Portage Theater tenants, Brugh is concerned that similar public nuisance issues will start to arise around their area.

“As shown through Mr. Carranza’s track record with the liquor commission and liquor violations, he currently has moving through process, with the Deleterious Impact petition that Ald. [Joe] Moreno (1st Ward) issued against him on the Congress Theater, and with the many, many, many pages of building code violation incidents, we want to see a track record that he can be a responsible venue operator and liquor license holder,” Brugh said.

Raines said he “doesn’t know” what Carranza is planning to do with the Portage Theater once the current tenants are evicted.

During an 11-week period starting mid-August 2012, Chicago Police received 30 calls from the Congress, a similar number to those of the United Center or Soldier field.

The theater owner has been summoned to four continuing Deleterious Impact/ Public Nuisance hearings with  Moreno since Oct. 31 because of complaints from local neighbors who say noise, security problems and public intoxication around the building have gotten out of hand. Those issues were heightened after an 18-year-old woman was sexually assaulted near the theater on New Year’s Eve.

As part of the city’s Business Affairs and Consumer Protection hearings Carranza is required to produce evidence he has made progress in cleaning up the venue, which he attempted to do by hiring both the development company Doejo and chef Nick Lacasse of the Drawing room to help redevelop the Congress’ image as a more upscale venue.

However, the Congress has since split with Phil Tadros of Doejo, leading to a $260,000 lawsuit against the former development partner filed Nov. 28 for breach of contract, and spokeswoman for the Drawing Room, Kim Bosse said simply about the partnership with Lacasse in an email, “Nick is not involved in that project anymore.”

Raines said the split with Doejo was because of financial disagreements. Tadros argued that he “wasn’t allowed to do what he previously agreed to do.”

Raines said the Deleterious Impact/ Public Nuisance meetings are over with, and their last meeting is in May which he says will be a last check-up on the venue’s redevelopment process.

Paul Levin, executive director of the director of Logan Square Chamber of Commerce, said he has attended the meetings and Carranza has made evident progress.

“We’re glad that he has made he changes that he has made,” Levin said. “It seems as though, from the hearings, he has done what he has to do to keep his [liquor] license,” Levin said.

The operators of the Portage Theater continue to fight to  “save the theater as we know it,” with fundraisers and a Facebook page.

Posted by on January 11, 2013. Filed under Community, Editor's Choice, Local Business. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.