SYRACUSE, N.Y. (WSYR-TV) — No sign of a resolution in the impasse that’s shut down the popular Empire Brewing Company brewpub in Armory Square.
Empire and the building’s owner, Armory Boys LLC, are in a dispute over rent payments and the lease.
Armory Boys LLC Managing Member Jeffrey Appel says, “Empire has not paid a dollar in rent for three months and was constantly behind in payments over the past year, despite business as usual and substantial infrastructure investments made by the building owners to improve the establishment. The default is immediate and irreversible without any rent payments made.”
Empire founder David Katleski tells NewsChannel 9 that Armory Boys LLC raised his rent significantly when they bought the building the brewpub resides in two-and-a-half years ago.
“All of our profits now went to them. We’ve been operating at a deficit for some time,” says Katleski.
Katleski was asked by NewsChannel 9 if Empire will ever reopen in its familiar basement location on Walton Street in Armory Square. “It’s hard to say. I’m not opposed to opening in another location. I love downtown Syracuse. I love Armory Square.”
Appel adds in his statement to NewsChannel 9, ” Today we will respect the past, respect the contribution Empire has made to the City and then look forward to embracing the next innovator that will bring prosperity to themselves and others.”
Empire Brewing Company would have celebrated its 25th anniversary in Armory Square in the coming weeks.
The two sides have each issued statements on Thursday.
Empire issued the following statement:
The success of Downtown Syracuse, in particular Armory Square, has been at the forefront of my interest and business priority since 1992. When Empire Brewing Company first opened its doors on November 3rd, 1994 I think we paid $3 per square foot; a fair rent at the time for a basement. And over the past quarter-century and five different landlords we have watched Armory Square grow into something remarkable. Local business people interested in creating a unique entertainment and shopping district of downtown primarily developed Armory Square, fostering the character we see today.
While I applaud the investments being made in Syracuse by outsiders, it’s concerning to see some negotiations are not done for the betterment of our city but solely for personal interest. I am not a proponent of increased regulations but I do believe that a structured growth plan for Armory Square is prudent. Now outside developers purchasing buildings are doubling and tripling tenant rents. Solid businesses are being forced out of their locations as a type of cleansing because they are not able to sustain the new occupancy costs or don’t fit within the landlord’s grand scheme.
Such is the case with Empire Brewing Company in Armory Square. Prior to the Armory Boys acquisition of our buildings Empire paid an average of $10 per square foot; a fair rent for a basement space. When the Armory Boys purchased the buildings, they raised our occupancy costs to average $33 per square foot. Rather than being evicted, and lose 50 jobs, we moved forward optimistically hoping to conquer these economic challenges and remain a cornerstone of Armory Square. Empire has paid over $300,000 more in rent and additional charges in the past 24 months versus the 24 months prior. It is simply not reasonable to expect Empire, occupying less then 20% of the total leasable space, to pay 100% of the Landlord’s mortgage.
In addition, an extensive punch list of landlords required work in the brewpub has gone unfinished. When I was promised an increase in business by having them as our landlord the opposite has occurred. We were promised full tenancy in the two buildings and the opposite has occurred with increased vacancy. Renovations to the Piper Phillips Building went well beyond the projected construction timeframe and during the past two-years of construction we were forced to deal with constant operational disruptions, construction noise and renovation dust, with no rent concessions whatsoever. Empire has been operating for the past 6 months without a Certificate of Occupancy because the buildings sprinkler system is not to code.
The economics of the lease is unsustainable and has caused deficits at the brewpub. Having to pay three times the occupancy cost forced us to cut labor at the sacrifice of service, decrease portion sizes and increase prices, which caused us to fall short on the customer experience that we strive to deliver. The occupancy cost has made it impossible to invest profits back into the business for marketing, renovations and upgrades. We were current on all charges up until August when I asked the Armory Boys for rent concessions; if they wanted Empire to continue as a tenant, we needed a 3-month rent abatement (just rent, not taxes and utilities) and a revised rent structure moving forward.
Tuesday night Jeffrey Appel, managing partner for Armory Boys, LLC locked the gate and all access to Empire without a NYS court order and took possession of all of the contents including perishables, beer, liquor, tenant property and employee personal items.
In as much as I love operating the brewpub in Armory Square, it pains me to admit that we are at a significant impasse with the Armory Boys and will be closed indefinitely. Losing nearly 50 jobs at the pub also pains me greatly.
Over a thousand people have worked at Empire on Walton Street during the past 25 years and each have helped us create and serve award-winning beers and critically acclaimed foods. Thank you to all that have worked here and all that have patronized Empire’s brewpub. November 3rd will be our 25th anniversary. Please raise a glass of your favorite Empire beer in remembrance of the pub and join us in celebrating a quarter century of business.
Armory Boys, the company that owns the building that Empire Brewpub is in, issued it’s own statement:
The Empire Brewing Company is in default of its lease for its Armory Square location at 130 Walton Street. The owner of Empire, David Katleski, has failed to make rent payments since August. The regretful failure to make any rental payments for this prime downtown space has placed the buildings owners, Armory Boys, LLC, in the untenable situation of calling the lease in default and moving to repossess the premises. “The facts speak for themself,” proclaimed Jeffrey Appel, managing member of Armory Boys. “Rather than take advantage of the surge in new residents and businesses downtown, David has chosen to stand still and blame the lease that he negotiated combined with an increase in new restaurant choices as the basis for his failure.” Empire has not paid a dollar in rent for 3 months and was constantly behind in payments over the past year despite business as usual and substantial infrastructure investments made by the building owners to improve the establishment. The default is immediate and irreversible without any rent payments made. “We will look to the future with confidence. We know that this is a great time to be in Syracuse and that the City has its best days ahead. Today we will respect the past, respect the contribution Empire has made to the City and then look forward to embracing the next innovator that will bring prosperity to themselves and others,” Appel concluded.
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