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Bop Shop Won't Stop

Kate Smith/ Down but Not Out



Bop Shop Won't Stop

Art and commerce have always bedded down together un-easily, and with good reason: art needs the space to take chan-ces; commerce thrives by eventually elim-inating chance. To be in the business of making space for art, then, is often to be out of business. The Bop Shop, one of the city's only remaining venues for up-and-coming and avant-garde jazz, has been on the verge of collapse for four years, and earlier this summer it appeared that the levitation act was over.

In June, after longtime proprietor Kate Smith filed for Chapter 13 bankruptcy for the third time in as many years, the club's lending bank, Security Federal Savings & Loan, forced the sale of the property. The bank can hard- ly be blamed; Smith's original mortgage, which her former attorney estimates at about $300,000, had nearly doubled since she bought the building in 1990, and she was carrying a debit of more than $6,000 on her gas bill. Every year, says the attorney, Steven Fritzshall, "I'd pull her out of bankruptcy and make a side deal with the bank, who'd be waiting and waiting, and nothing ever came to fruition.... They never got any payments."

New owner Wayne Berman, who says he supports Smith but wouldn't elaborate on his exact plans for the building, paid the interest and took over the mortgage. He's owned various other commercial and residential properties, mostly in Lakeview, including the Blue Iris, which he sold last year. "I'm not very competent at running a business like that," he says. "I'm better at design and concepts."

Smith, 45, has lived in Chicago on and off since 1970, working mostly as a bartender. In 1987 she cofounded Stop AIDS Chicago; three years later, "sick of writing grant proposals," she began looking for a piece of property to invest in. Though she knew little about jazz at the time, she was interested in it and decided that opening a jazz club would be a good way to learn more. She's still community conscious and has a national reputation for treating musicians well, often paying them more than she takes in at the door; over the years she's lent out the space for numerous benefit functions. Part of the building is occupied by SRO tenants with whom she has been generous with regard to unpaid rents. But unrestrained generosity and poor business skills make a bad match--and, in a neighborhood where everyone's suddenly eager for property, a dangerous one.

The financial troubles leading up to the final declaration of bankruptcy, ironically enough, were complicated by friction between Smith and her first long-term tenant, the Wood Be Cafe, owned by Jim Nuter and Alison Raby (daughter of independent political organizer Al Raby). The couple opened the nicely renovated space in the eastern half of Smith's property in January; they'd been working on it since late spring of 1995. Smith claims the couple wanted to buy the property, and accuses them of ratting her out to the liquor commission and the police for the sort of tiny technical violations committed by every bar in the city. Nuter declined to comment for the record, saying he didn't want to aggravate tensions that have by and large been made moot by the sale.

The relationship between the businesses seems to have been marked by miscommunication. Last fall the building's gas was turned off for a time because of Smith's sizable debt. It was eventually turned back on, but in the interim Smith switched on an old electric hot-water heater for the club and her residential tenants. Unfortunately, the heater turned out to be wired to the cafe's electric meter, a fact Smith says she forgot. "It was a full family thing, pulling together," Smith says of her operating mentality at the time, but Nuter and Raby had no interest in being adopted.

When the third bankruptcy loomed, Smith says, she expected Fritzshall to file an extension for submitting the required reorganization. She had been trying to work out a deal with Columbia College to use her facilities for a hotel-and-restaurant-management program, but the measure couldn't have been approved by the school until November. Fritzshall says that considering the history, the plan wouldn't have satisfied the court. Smith released Fritzshall and hired another lawyer, Melvin Kaplan; her case was tossed out in less than ten minutes. Smith lost the property and had to pay Kaplan $5,000.

Throughout the ordeal, Smith had been looking for a new space for the Bop Shop, but says she has been surprised at how amenable Berman has been to keeping the club afloat. "I'm standing and looking at the future and declaring that the new landperson is a godsend, and not my worst enemy," she says. "I'm trying just to focus on the business instead of being sucked up and dragged down by property problems, fees, and penalties."

At her request she's been given a short lease, six months, with a promise to renegotiate when it expires, and Berman says he's charging her about two-thirds what he could get. (Smith says she's paying $2,000 a month.) "I'm trying to expand the amount of commercial space I own on Division," explains Berman (who owns no other property on the street yet), "and her concept melds well with my plans. I think bankruptcy was the best thing that ever happened to her."

Art accompanying story in printed newspaper (not available in this archive): Kate Smith photo by Nathan Mandell.

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