Congress Theater splits with development partner

September 16, 2012

Less than two months after announcing ambitious plans for the ground-floor block of the Congress Theater—and citing them as evidence of progress at city hearings that will decide the fate of the embattled venue—its controversial owner has broken with his development partner, once again raising questions about what will become of the Logan Square landmark.

“This fall, the Congress Theater Entertainment Center will undergo a bold renovation and reconceptualization to mark a new era for the landmark space,” read a joint press release issued on July 23 by the Congress and Doejo, “a full service digital agency and startup accelerator headquartered in Chicago” and led by the ambitious young entrepreneur Phil Tadros.

“A city block of opportunity lies within the 10 to 18 rehabbed street level spaces within the entertainment complex, which will be punctuated by a farmers market-inspired grocer, a cafe called Flat White and a forthcoming gastropub restaurant, all independently owned and operated,” the statement promised.

On Saturday, Tadros issued a very different release: “Though we wish the building and community well, Doejo will no longer be working on the Congress renovation due to breach of contract. We were proud to provide a foundation of innovative work for this landmark space but will not be able to continue due to non-payment.”

Tadros expounded on the bitter split in an interview, further addressing his conflicts with the notoriously mercurial owner of the Congress, Erineo “Eddie” Carranza. “He’s not a maintenance person; he’s kind of a slum lord,” Tadros said. “I told him before, if you want something awesome to happen here, just walk away. But he kept coming in and changing things. I was like, are you loony? He’s kind of nuts.”

Carranza deferred to his attorney for comment. “Is Eddie nuts? Everybody’s a little nuts!” said Carranza’s lawyer, Thomas Raines. “Tadros is coo-coo for Cocoa Puffs! This banana was paid over a quarter of a million bucks and he did zero.

“The idea that firing Doejo somehow hinders improvement in progress at the Congress is one of the silliest statements I’ve ever heard,” Raines added. “It’s actually the opposite: Getting rid of him is the most beneficial thing to the improvement. The build-out has continued. The build-out hasn’t stopped. There is a lot of improvement going on there.”

Development of the Congress has taken on added urgency in recent months because Carranza and the venue are in the midst of a series of high-pressure “Deleterious Impact/Public Nuisance” hearings with the city that could result in the theater losing its liquor license if concerns about security, the condition of the building and noise are not abated. The next hearing takes place on Oct. 31.

Meanwhile, Carranza earlier this month surprised many neighbors and city officials when he purchased the Portage Theater, a second, smaller landmark venue at Six Corners on the Northwest Side, for a figure sources say is close to $3 million.

Aldermen have questioned how Carranza could buy a second 1920s-vintage theater in need of serious repairs when he has long frustrated officials by not meeting their demands and those of neighbors to repair the theater he already has owned and operated in Logan Square for the last seven years.

 “It’s a free market… but really? You [Carranza] still need to get your act together and deal with all of the problems at the theater you already own. You’re crying poor to me all the time [when urged to improve the Congress], and now you want to buy another theater?” First Ward Ald. Proco “Joe” Moreno said in an interview with this blog in July.

Northwest Side Ald. John Arena (45th) echoed those comments last week, expressing concern about Carranza’s ability to restore and operate the Portage. But Arena added that he was “cautiously optimistic” about Carranza’s new ownership of the theater.

Carranza declined to comment for this blog about his plans for the Portage, but in response to the aldermen and others questioning how he financed the new deal, he wrote via email, “Have you ever heard of Bank Loans? Bank loans is where entrepreneurs go to borrow money to grow their businesses. Banks like what we do so they lend to us money. Bank loans have been going on for hundreds of years.”

The Doejo development plan for the Congress was ambitious, but Tadros said money did not seem to be an issue for Carranza. “Phase one was close to a million dollars, and phase two was close to a million as well,” Tadros said. “He has money. He had no problem writing a check.”

So why has redevelopment and improvement of the Congress dragged on to the point of city hearings? “I don’t know,” Tadros said. Carranza did not make his second payment for the project, the developer said, and Tadros claims that he was preparing to walk away when Carranza fired him first.

“Here’s what we know,” Raines responded. “We know we gave [Tadros] $270,000. We don’t know what he did with it. We have a letter of intent with him. He has to provide an accounting of where that money went. He’s failed to do it. Since failing to do it, we’ve terminated the agreement.”

The attorney added that Carranza will file a lawsuit against Tadros this week.

“If he wants to sue me asking for his money back, it’s going to be me saying you have no right to break our contract and now we can talk about it in court,” Tadros said. “I don’t think he’ll get very far. I really just wanted to fix up the place. I had beautiful plans for everything, from the menus to the floors to the vintage wood I bought for the walls and the counters. But he sabotaged the whole thing.

 “I’ve been through three different general contractors on this project in a month and a half. It’s crazy,” Tadros continued. He said Carranza constantly changed plans for the project, demanding more from Doejo than the agreement stipulated while failing to meet his own obligations. “He just kind of spins around and you never know what you’re going to get with him.”

Countered Raines: “The plans are continuing. If anyone thinks that Phil Tadros is the answer to everyone’s prayers, they’re sadly mistaken.”

According to Tadros, Carranza changed his mind mid-project about inviting high-end food and retail outlets into the storefronts—the developer claims he had several lined up—to wanting to control all of the businesses himself.

“When he started acting weird and the relationship went south, I started questioning why was he doing this—why would he want to own all the stores and bars and restaurants he wants to open up? Is he doing that just so he has the leases, so he has the value of the building, whatever he wants it to be? He makes enough money; he owns [the theater] by himself. You know how much cash that is at every show? I think if he had partners and other people watching him, he wouldn’t be able to collect like he does.”

Tadros says he regrets testifying on behalf of Carranza and the Congress at the city’s Deleterious Impact/Public Nuisance hearings. “I really felt like I got the alderman to see eye to eye that we were going to do something positive. I’m embarrassed now because I stuck my neck out there and vouched for [Carranza] and all of the sudden he’s turning on me in the middle of the project. There could be something there mentally. There’s definitely a switch.”

Tadros added that Carranza does not seem concerned about the city process that could revoke his liquor license or the bad publicity that the Congress has gotten from it. “I think he’s pretty cocky that they wouldn’t [do that]; he’s got a lot of stock in his dream-team lawyers. And I think he enjoys the attention in some weird, sick way. He was never in the spotlight like this, and even if the attention is bad, he’s fighting something. It’s a bigger conspiracy for him: People want that space, and he doesn’t believe he has any faults.

“[But] he has a history of working with people and then really quickly spitting them out. He’s not able to maintain a relationship with the people who want to do stuff there to improve this amazing venue.”

Indeed, though Carranza often portrays himself as the small independent businessman fighting larger entities that want to take control of one of the most valuable venues on the music scene, he has pulled off the unprecedented hat trick of allying with and then alienating every one of the three major national concert promoters in Chicago that he calls his competitors.

Carranza borrowed money from Jam Productions to retain control of the Congress, though that company never has hosted shows at the theater. He also partnered with Live Nation, which held concerts at the theater for several years via its House of Blues outlet, and Lollapalooza promoters C3 Presents, though neither of those partnerships resulted in the promised improvements to a venue that many concertgoers call the worst-sounding, most decrepit and potentially the most dangerous in the city.

Raines denied that Carranza is not taking the city hearings seriously. “There’s new security as of the last Deleterious Impact hearing. You should see the security company he hired: It’s a top-notch place, run by a former policeman and two current policemen. Eddie went ahead and took the notes from the Deleterious Impact hearing, he’s gone ahead and hired these guys and he’s working with them constantly.”

Ald. Moreno agrees that there has been some progress at the Congress since the hearings began. But he maintains, “I think you can say I’m happy, but still not satisfied.”

Raines argues that the Congress would not be in the hearing process if a rape had not occurred outside the theater on New Year’ Eve, though city officials have denied there is a connection. The lawyer also says that the hearings are a result of a personality conflict between Moreno and Carranza.

 “Look, I get it: [Eddie] wasn’t the greatest operator in the world, but he certainly wasn’t the worst,” Raines said. “What I’m trying to do is mend the fence with Eddie and Moreno. I learned a long time ago that butting heads with aldermen doesn’t do anybody any good.

“But if Eddie’s so horrible and he’s such an ogre, how the hell does he have this many events? Why do performers keep going there and performing? I understand some people might not like the guy—you know Eddie: He’s rough, he’s abrasive and things of that nature—but there’s also people who are as loyal to him as the day is long.”

Earlier reports about Carranza, the Congress and the Portage:

Sept. 11: The Portage Theater: What’s Eddie up to?

July 26: Congress Theater partners up… and looks to expand

April 14: More trouble at the Congress Theater

March 28: Critical of Congress security, headliner brings his own

March 25: Congress Theater responds to complaints

March 22: City to Congress Theater: Clean up your act!