The war between the University and a prominent New Haven property manager is intensifying.
On Wednesday, Yale fired Schiavone Management Co. from managing the Broadway properties the company had been overseeing for the past year and a half without a contract. This comes on the heels of Schiavone Management’s suit against Yale on Monday for ceasing to pay benefits to Schiavone employees working on the Chapel Street properties that the University owns and Schiavone manages.
Yale charged Schiavone Management had been mismanaging the Broadway properties — which include the future Urban Outfitters, the Yale Bookstore, Au Bon Pain and Trailblazer — and gave the University no choice but to find an alternative developer.
“We have determined that given SMC’s continued unresponsiveness to issues such as the conditions revealed by our joint tours, its improper billing of services, its unauthorized use of the Yale name on its Web site and numerous other deficiencies which we have been unable to have SMC address adequately, together with your stated desire to get out of the business, it is no longer in Yale’s interest to have SMC continue as the property manager of these properties,” University Properties Director John Maturo wrote to Schiavone Management Wednesday.
Schiavone Management officer Joel Schiavone ’58 said his company was caught off-guard by the firing.
“We’re all a little stunned,” Schiavone said. “It was done completely out of the blue. They just walked into the office and shoved the notice under our noses.”
Schiavone said he believes the termination is a direct response to the lawsuit filed Monday.
“Absolutely,” Schiavone said. “Why else? We have never received a single letter from them on our performance on Broadway. There is no reason, except for what I think I can say is revenge. They don’t like us because we’re giving them a hard time.”
But University spokesman Tom Conroy said there is no connection between the termination and the lawsuit.
“This was going to happen regardless of any action on their part in court,” Conroy said. “They have stated in writing to Yale their desire to get out of this business. It’s not a matter of animosity. The management was not adequate. Yale worked for a very long time in dialogue to help them manage better. If the performance had been adequate, they would still be on the job.”
Schiavone Management had been managing the Broadway properties under the terms of a contract that expired a year and a half ago, so the University was under no obligation to retain Schiavone as property manager.
But Schiavone Management spokesman Charlie Harper said the University’s accusations of improper billing are illegitimate.
“They can’t determine that without doing an audit,” Harper said. “Every complaint Yale has made to create a paper trail, Schiavone has had an adequate response. It’s been going back and forth for 12 months.”
Harper said Schiavone was perfectly willing to allow an audit, but because of personal reasons Schiavone would not accept the auditing firm Yale proposed.
According to Conroy, tours of the properties revealed uncleanliness and unsafe conditions not rectified by the time of subsequent inspections.
Harper said Wednesday’s firing is not the result of dissatisfaction, but is a direct attack on Schiavone Management.
“Schiavone is open to talk and has always been open,” Harper said. “But Yale has never taken up the invitation. It’s like a divorce. You have the choice between a hateful and spiteful divorce or a congenial divorce.”
Harper said Schiavone Management would be willing to grant such a divorce, as long as its employees were protected.
The termination notice included an offer to pay Schiavone Management employees 30 days’ pay as well as to introduce them to the new management company, Off-Broadway Inc., that will now be responsible for maintaining and leasing space in the Broadway properties.
“Yale made a decision that is in the University’s best interest and the best interests of those tenants in those buildings, of Yale students and of the patrons of those businesses,” Conroy said.
But Schiavone said Yale is trying to drive Schiavone Management out of business, which the company will have trouble stopping.
“They started a year and a half ago,” Schiavone said. “It’s a long concentrated assault on us and it hurts. To be blunt, we are a small company, and we do not have significant resources. We don’t have the resources to fight them.”
Schiavone Management has a contract with Yale to manage the Chapel Street properties — the subject of Monday’s suit — for another eight and a half years.