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November 10-16, 2005

loose canon

Terminal Politics

Reading Terminal merchants battle a City Hall crony. Surprise: The farmers are winning.

Rick Olivieri doesn't want Ricardo Dunston poking around the cash drawer of his cheesesteak shop. Olivieri heads Reading Terminal Merchants Association, and none of its 80 or so merchants wants anyone diddling with their financials.

Chosen by the mayor, Dunston heads the Reading Terminal Market Corporation, the nonprofit company that manages the market. That makes Dunston the merchants' landlord. But he wants to do more, much more. He shouldn't. He should do less. He should go away.

The merchants of this century-old Philadelphia tradition don't need to be told how to run their businesses or their market. And they don't especially need a political appointee whose professional experience is with franchise operations, like the Shops at Liberty Place or the retail and food courts at the airport. (Dunston declined to be interviewed.)

The revenue reporting that Dunston demands will radically change a historic institution over which he already exerts too much control. Market management already dictates every merchant's hours of operation. They decide what merchants can and cannot sell. They can tell a merchant what his stand must look like, right down to the signage.

And if Dunston or his team doesn't like something -- anything -- merchants could lose their leases. That's unprecedented, but that's what just happened to six market businesses. Without warning, successful merchants with 20 years standing were shown the door. Paul Steinke, Dunston's general manager, said the businesses were "underperforming," but wouldn't elaborate. I checked with several owners: One stand was a little behind in rent, but other merchants said they were doing fine.

Many merchants think this is intimidation -- like a warden executing prisoners at random. That's how badly Dunston wants to peek inside the merchants' cash drawers.

Why does management say they need to peek? They've written that they need to gauge the effectiveness of their marketing. And, more importantly, sales reporting would allow Dunston's management to assess "retail performance" by comparing the revenues of similar merchants selling the same items.

Come on. This is a setup that invites rigging the outcome, since the market's management already tells vendors what they can and can't sell.

Management by Intimidation

Olivieri and the other merchants aren't buying Dunston's line. The market is doing great. An estimated 5 million visits a year makes it more than twice as popular as the Liberty Bell, the city's largest tourist draw. The sky over the market just isn't falling -- unless you believe Dunston's dire prediction.

Last summer, Dunston assembled the merchants to show them a video about the disaster just over the horizon. Competition like Trader Joe's, Fresh Fields, Di Bruno's and even neighborhood farmers markets would decimate the market, merchants were told.

To many merchants, these aren't threats. If anything, these businesses are expanding the market for locally grown food. Besides, the Reading Terminal merchants were already competing and doing quite nicely.

But Dunston and company wouldn't take no for an answer, and set about busting up the effectiveness of Olivieri's merchant group. Instead of offering all merchants a general lease, as in the past, each vendor would have to go it alone against management.

And for while it looked like that management had won. The camel's nose would soon be inside their tents. But then something happened that you might as well call divine intervention.

God, said the Amish, wouldn't let them open their books to management: It would be "bragging." With the Amish in revolt, management increased the intimidation by refusing to renew the six leases.

Then merchants turned to their own customers, who piled counters high with petitions, for help. Under the glare of publicity, Dunston's board of directors backed down. Packed with politicos like commerce director Stephanie Naidoff and Councilman Frank DiCicco, the board needed to quell the public outcry. As we go to press, insiders indicate that some outcast merchants will be offered leases. Even more importantly, lease negotiations reportedly will be put on hold for at least six months.

In the meantime, the merchants hope to turn the tables on Dunston. Now the merchants want to take a long look at his management's books -- a "forensic audit," as Olivieri calls it. They want to know why security and maintenance have been contracted out, and why their cost is soaring. Other merchants talk about fighting back with a strike, refusing to open their businesses.

Merchants want Dunston gone. That's a great idea. Having had the good sense to back off from this brewing insurrection, perhaps this City Hall insider should turn all his attention back to airport concessions, and -- please -- leave the Reading Terminal Market alone.

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