In 2018, Michael Olszewski — businessman, realtor, Loyola alum and benefactor — said he was personally invited to open an upscale restaurant across the street from Loyola’s Lake Shore Campus by Loyola’s Chief Financial Officer, Senior Vice President, and Chief Business Officer Wayne Magdziarz.
Olszewski was initially weary about the success of an upscale restaurant in the area, but said he wanted to do something one of a kind for his alma mater.
“We’re not going to come out of the gate doing very well drawing people and making money, we all knew that,” Olszewski said. “And [Loyola] said that’s not going to be a problem, we’re here to work with you.”
Thus Olszewski committed, signing a 10 year lease, which The Phoenix obtained, with two five year extensions. The lease detailed $10,000 monthly rent. He said he invested $1.3 million of his own money to build the restaurant, located at 6580 N. Sheridan Road, which only had dirt floors and columns to begin with, according to court documents.
Three years later, the restaurant is permanently closed. Olszewski, who said he expected and invested in at least a ten year business venture with Loyola, is now facing an eviction suit with the university.
According to the initial agreement, Loyola was responsible for cleaning the exterior and maintaining the building, which Olszewski said never happened despite requesting such services in the emails obtained by The Phoenix. Olszewski specifically requested in the emails Loyola clean multiple places of graffiti on the exterior of the building and tend to plumbing and outdoor patio issues that he said were preventing business.
In Section 3.9 of the lease, it’s stated that Loyola is responsible for any expense to repair the exterior walls, plumbing, building facade, electrical and structural foundations. In total, Olszewski said he had a $77,000 financial loss from accumulated building repairs.
“[Loyola was] deficient and they ignored it because they didn’t really care,” Olszewski said. “It’s very disheartening and saddening, I would never believe the university that I went to and my family went to would do something like that, and they did.”
Onward officially opened in November of 2018. The restaurant served an array of food, such as oysters, steak and duck. Prices on the dinner menu ranged from $12 – $28.
“We’re introducing something that hasn’t been introduced to Rogers Park and it was something where it was going to be an effort,” Olszewski said. “And quite frankly [Loyola] didn’t take any risk, I took all the risk.”
Business was going well, Olszewski said, until the pandemic began in 2020 and forced indoor dining restaurants across the nation to close their doors, as a result of Governor J.B. Pritzker and Mayor Lori Lightfoot’s restriction on indoor dining services. The restrictions came when Pritzker declared Illinois in a state of emergency due to the rapid spread of the deadly COVID-19 virus in March.
However, Olszewski said it was more than the City of Chicago’s restrictions that hindered his business – it was also the university failing to understand the effect of classes moving online and many students moving home had on the business.
“The demographic that everybody anticipated would be filling seats in this restaurant were the parents and visitors to the students at Loyola,” Richard Carbonara, Olszewski’s lawyer and a Loyola alum said. “And students weren’t there for fourteen months.”
Additionally, Olszewski said carry out wasn’t prohibited, but not encouraged, because the lease agreed Onward would be a “sit-down fine dining” restaurant. Though, carry out services is how many restaurants stayed afloat during the pandemic, Olszewski said Onward’s kitchen and food services didn’t operate in a way to allow this.
Loyola issued a notice to Olszewski in April 2021 requesting $169,899.84 in outstanding rent from November 2019 to March 2021. Olszewski had 10 days after this issue was sent to pay the balance, which he never did.
Prolonged closure prevented Olszewski from paying his $10,000 monthly rent fees according to Olszewski and Carbonara. Olszewski said rent wasn’t paid in the months leading up to the March restaurant closure due to struggles with generating business.
According to Olszewski and Onward’s counterclaims, Loyola officials claimed they would help him with business struggles as he worked to get it up and running, yet he said the university never actually provided help.
The Phoenix requested an interview with Loyola’s Vice President of General Counsel Pamela Costas, but was declined by university spokesperson Anna Rozenich.
Magdziarz didn’t respond to requests for comment from The Phoenix.
“Loyola University Chicago does not comment on pending litigation,” Rozenich said in an email to The Phoenix.
After failure to pay, Loyola’s legal representation filed a complaint May 4 to Circuit Court of Cook County municipal department to evict Onward from the premises.
However, the complaint was defective due to it listing the wrong address and not being delivered to the legally agreed upon locations.
Loyola refiled the complaint July 1 which claimed Onward owed more than $268,000 in rent fees that had been accumulating since September 2019 — nearly $100,000 more than was originally requested in the April notice.
The Phoenix spoke with commercial real estate attorney Robert Boron, who said the federal and state Eviction Moratorium orders didn’t cover commercial evictions.
Boron explained that the defenses between commercial and residential eviction cases are very different, although all eviction cases happen in the same court.
“The obligation to pay rent is a separate obligation than every other covenant under the lease,” Boron said. “If someone is saying, ‘I didn’t get whatever service I was supposed to get,’ that could be a defense for a residential eviction, but that would not be a defense in a commercial eviction.”
Loyola’s complaint requests the court enter an eviction order against Onward and have Olszewski pay accumulated rent fees, legal expenses and any other expenses the court decides Loyola deserves.
Loyola’s complaint states the original lease signed by both parties agrees that if there were any events that prevented performance of the restaurant, such as an “act of god,” Onward would still be obligated to pay rent. Meaning that despite an occurrence such as a pandemic, Olszewski would still owe rent.
This corresponds to the lease The Phoenix has, though Olszewski denies this.
“We didn’t agree to that,” Olszewski said. “Nobody in their right mind would agree to that.”
Largely, Olszewski said he went into this with communication from the university that it would work with him, either through payment plans or relief, to ensure a successful business venture, with the understanding that it would take years to generate revenue.
“In this situation there are legal problems, but you know when you think you’re dealing with a Catholic Jesuit institution, they have very sharp elbows in the business world,” Carbonara said. “They’re not practicing what they’re preaching, certainly in their business transactions. They’re looking to cut every corner … it’s Loyola’s world, we’re just living in it.”
In 2008, Loyola started the Partners for Business Initiation, which worked with Rogers Park Business Alliance (RPBA) and Edgewater Chamber of Commerce to economically develop the area around Devon Avenue, Sheridan Road, and Broadway Avenue, according to the press release by Loyola.
Since launching, Loyola has invested roughly $98 million in real estate acquisitions near its Lake Shore Campus. The university also launched Loyola Property Management in 2011, which manages roughly 25 retail and residential tenants, generating a revenue of $2.2 million annually.
Onward filed its verified answer, defense and counterclaims against Loyola Oct. 14, which details 13 defenses and six counterclaims. The Phoenix was provided with these court documents by Carbonara.
One of Onward’s defenses claims that they had an oral agreement prior to the execution of the lease that Onward wouldn’t pay rent if there was an unforeseen circumstance, such as a pandemic. Although the clause detailing that Onward is still required to pay rent is included in the lease that is signed by both parties.
Ultimately, these claims argue that because of the pandemic, Onward wasn’tt only prevented from performing their obligations under the lease – being to operate a sit down, fine dining restaurant – but it was actually “illegal, impossible, and impracticable.” Thus, Onward is claiming the lease was terminated March 16, 2020, when indoor dining was shut down by the City of Chicago.
Though Chicago allowed indoor dining to reopen at limited capacity at some points during 2020, and fully reopen in June, Onward never reopened its doors. Per court documents, Onward could not open with capacity restrictions due to “impossibility to rearrange kitchen and furniture to comply with Center of Disease Control guidelines.”
To this day, a sign remains on the door stating closure due to COVID-19.
Boron said the majority of the counterclaims listed in Onward’s defense wouldn’t be heard in an eviction court room.
“Eviction courtrooms have limited jurisdiction,” Boron said. “The only thing they have jurisdiction to hear is cases involving concession and rent. They can’t do breach of contract … those would either be dismissed or transgressed out of the courtroom.”
Ultimately, Olszewski said he’s disappointed in how the lease worked out between him and Loyola.
“They didn’t act as a good landlord,” Olszewski said. “They didn’t act properly, and they didn’t act in a manner to help a business succeed which they said they would.”
The suit between Onward and Loyola is ongoing. In the counterclaims filed, Onward requested a trial by jury. Though, Boron suspects because eviction judges cannot hear counterclaims of their nature, the case will be transferred out to a different division or circuit court or will be consolidated, but only time will tell.
“This is a matter of principle, this is a matter of right and wrong,” Olszewski said. “This is a wrong that I have to make right. Maybe it’ll set the tone for other people, and maybe for the university to follow. It’s something that I feel deep down in my heart, a burning desire and passion to follow through and I’m not going to stop.”