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Detroit — The non-profit that runs Eastern Market is looking into ways to keep open the Russell Street Deli, a popular small business that said it will close this fall because its new landlord wants to dramatically increase the rent in a dispute over repairs.

The potential closing of the restaurant that's been in business for 30 years has raised new concerns about gentrification in the neighborhood surrounding the historic farmers market. In the past year, several long-time residents have been forced to move out and small businesses have closed due to rising rents. 

But it may not be over for Russell Street Deli. Dan Carmody, president of the Eastern Market Corp., said he was in contact Tuesday with both the owners of Russell Street Deli and the building's owner, a group of investors led by Linden and Sanford Nelson, about trying to resolve the money dispute. 

"We have had conversations with both, and it didn't work," in terms of finding a solution, Carmody said in an interview late Tuesday. 

But the nonprofit that oversees the 128-year-old farmers market says it is still exploring ways to help the popular eatery remain at its longtime location. The restaurant owners couldn't be reached late Tuesday by The News. 

The building owner appeared open to the idea, according to a written statement by FIRM Real Estate, which is run by Sanford Nelson. 

“We welcome Eastern Market Corporation’s assistance," the statement says.  "From the very beginning, we have sought to resolve this matter in good faith. We’re willing to help the owners of Russell Street Deli achieve their goals.”

Carmody says the Eastern Market Corp. has "over the years found funding to help small businesses" stay open. "We certainly will look into whether we can bridge the gap in this dispute." That includes finding a way to help pay for an estimated $50,000 in floor repairs the landlord is demanding. 

The building owner contends repairing the floor is the restaurant's responsibility. The landlord wants to roll the potential $50,000 cost into a new monthly rent. The landlord gave the restaurant a couple of options, which would raise the monthly rent either by $1,700 to $3,700 a month. The restaurant currently pays $1,700 a month in rent.  

The Russell Street Deli is in one of 20 Eastern Market buildings that has been purchased since 2017 in the historic district by entities linked to the Nelson-led development group. The building at 2453-2469 Russell St. is also home to Supino Pizzeria and Zeff's Coney Island. Mootown Ice Cream & Dessert Shoppe recently closed. Detroit Kung Fu Academy has moved into another building in Eastern Market at 1353 Division that is owned by the Nelson group.

Sanford Nelson said in an earlier Detroit News interview he aims to preserve as much as he can, but many of the buildings are in need of significant upgrades, which will result in much higher rents.  He noted some tenants were paying less than $6 a square foot for rent, and the going rent for renovated commercial spaces was closer to $30 a square foot. 

Eastern Market has been working on ways to preserve "core values" of the historic food district that are aimed at keeping the area focused on food, small and medium businesses, and keeping it affordable for people from diverse incomes.

Since January, the non-profit has also been working on ways to rate the private investment pouring into the buildings around the market. The group wants to set up a list of about a dozen points to help determine if the private development is in line with the market's "core values." 

Detroit Mayor Mike Duggan expressed concern about the deli's possible closing on Tuesday. 

“I think it is really important we maintain the character of Eastern Market," he said. "I have said to developers if they want build housing at higher levels in Eastern Market, I’m supportive of that if you maintain the character on the main levels.”

laguilar@detroitnews.com

Twitter@LouisAguilar_DN

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