Rick's Original Philly Steaks to leave Reading Terminal

Faced with paying almost $700,000 of his opponents' legal fees if he lost at trial - and court rulings that all but assured that he would - Rick Olivieri agreed yesterday to take his steak shop out of the Reading Terminal Market.

The settlement was announced on what would have been the first day of a nonjury trial before Common Pleas Court Judge Mark I. Bernstein of Olivieri's lawsuit against the market and of the market's suit to evict Olivieri.

The agreement calls for Olivieri, 43, one of the third generation of the South Philadelphia family that claims to have invented the steak sandwich 75 years ago, to close Rick's Original Philly Steaks by Oct. 31.

Yesterday, Olivieri was disconsolate and teary-eyed while speaking to reporters outside a City Hall courtroom. Several times, he turned and walked away to compose himself.

"It's not so much for myself; it's my employees," said Olivieri, who also has an outlet during baseball season at Citizens Bank Park. "Some of them have been with me 20 years. They're like a family."

Olivieri, whose family has operated from a prime window location on the market's 12th Street side since 1982, said he would reopen at another Center City location, though nothing was definite.

Kevin Feeley, spokesman for management at Reading Terminal Market Corp., said the settlement ended "a very difficult time for all the people involved. . . . Our motivation was always what was best for the market."

Feeley disputed Olivieri's claim that the eviction was retaliation for Olivieri's work as president of the 74-member merchants' group, with which he was involved in difficult talks on a new master lease.

Feeley said management agreed to forgo lease overstay penalties against Olivieri totaling $29,686 and its right to be reimbursed for $696,512 that it paid Richard Sprague and his law firm to represent the board.

Olivieri agreed not to try to return to the market for at least three years and not to contact any members of the market's management board. Any violation would result in reinstating legal fees and penalties.

"It's a sad day," Michael Holahan, owner of the Pennsylvania General Store and Olivieri's successor as head of the merchants group, said in a telephone interview.

"It's not clear to me that the market was well-served by losing a long-term merchant who had a wonderfully run business and lots of customers," Holahan said. "It doesn't feel like a net win."

The seeds of Olivieri's eviction were sown five years ago, when management began trying to modernize leases and operating policies to better position the market to compete with incursions by upscale national grocery chains such as Whole Foods and Trader Joe's.

The market's famously idiosyncratic and independent merchants initially balked at such changes as instituting standard business hours, sales reporting, and a tiered lease system in which prepared-food retailers paid a higher rent than those who sold fresh food.

Management said the tiered rents were incentives to encourage Reading Terminal's survival as a genuine urban farm market.

In late 2005, as lease talks dragged on, merchants were stunned to learn that managers had not renewed the leases of six longtime tenants.

Two eventually won reprieves, but the evictions and the lease talks further eroded management's relationship with Olivieri, who was then president of the Reading Terminal Merchants Association.

In July, market officials announced that Olivieri would not get a new lease and that his spot would be offered to Tony Luke, a South Philadelphia restaurateur who has made a national reputation with his roast pork sandwiches.

Olivieri drew public support from more than 3,000 customers who signed petitions and from a majority of the merchants. Olivieri's July 31 eviction date came and went. Olivieri sued the market board, the board sued Olivieri, and Luke said he would wait until the dispute was resolved.

Olivieri's business was better than ever, but his legal options steadily narrowed.

In February, Bernstein set yesterday's trial date but threw out 10 of 11 counts in Olivieri's lawsuit, including punitive damages. What was left was a claim for renovation expenses - totaling $1,500 - that Olivieri incurred based on what he said was the oral promise of a new lease from management.

Then, on May 12, Bernstein granted judgment to the market in its eviction action against Olivieri for overstaying his lease.

The rulings effectively eliminated Olivieri's chances of winning at trial.