The untold story of the Sa-Bai failure

Reading last Thursday’s DDn article about the failed gamble with the giveaway lease price to Sa-Bai, you’d think that even if the city got the building back, they somehow did OK because the Cincinnati-based tenant, Chanaka DeLanerolle,  did “$200,000” in build out:

Dayton city officials strongly defended the lease, saying it was worth the gamble to rejuvenate a street-level property in a strategic location. Deputy City Manager Stanley Earley said the estimated $200,000 in renovations and improvements that Sa-Bai’s owners made to the restaurant will help the city market the space to future tenants.

Earley said the city’s lease with Sa-Bai’s owners was negotiated by Bart Shaw, the former director of the Dayton Convention Center who left Dayton in late 2012 to take a job as operations director for the convention center in Fort Wayne, Ind.

“But I think he did a reasonable job, and I have no problem with what he did,” Earley said. “Given the cost of the buildout (renovations), and the existing condition of the facility, and the lack of demand for that space, that lease was viewed as a reasonable contract.

“I’m sorry that Sa-Bai didn’t work out. But at the end of the day, we got a lot of work done at the facility, and we had a viable restaurant in there for a period of time.”…

On March 11, the letter demanding that DeLanerolle vacate the premises was sent. By then, the restaurant had been closed for several weeks. The owners complied with the order to vacate.

Reached by phone earlier this week, DeLanerolle said Sa-Bai “never broke even a single week” that it was open. But he said he made several improvements to the restaurant’s interior, including extensive plumbing and electrical renovations and new bathrooms that cost an estimated $200,000.

via City lease gamble fails to pay off.

According to my sources who’ve been in the space, what’s missing from the article, is that before vacating the property, DeLaneroole stripped the place bare- removing hoods, sinks, stall dividers- leaving the space in worse shape then when they took it over. The real question is does Stan Early know this- and is just playing dumb, and or why did the city allow this to happen? And, why aren’t they taking DeLanerolle to court.

Typically in a tenant buildout, any additions, leasehold improvements, etc.- that are attached to the building become part of the building- it’s part of the reason why building owners are willing to forgive some rent in exchange for the improvements. In this case, the City of Dayton and the taxpayers got neither?

As property managers go, here’s another prime example of the city, engaging in business they have no expertise in, and failing miserably. However, that matches their performance on things they are supposed to do, like provide parks and recreation opportunities, clean and well maintained streets and public safety forces. I guess we shouldn’t be surprised.

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