Freddy's Nightmare

Pierpont Public Relations, one of the tenants, sent a list of staff comments praising the eatery. "Like any restaurant, some people like it and some people don't," explains Pierpont's Philip Morabito. "But they're nice people and their hamburgers are fabulous."

The Foteh family doesn't believe Freddy's disposal system simply failed Crescent's white-glove test. At the very least, the canceled check to SOS Services would demonstrate a good faith effort to perform the work.

Nadir Foteh says that, for a brief time, he wondered if Crescent was caught up in a post-September 11 display of jingoistic bigotry. The company's initial complaint did come less than a week after the World Trade Center terrorist attacks. Foteh is active in the local Palestinian community, but he has never been back to his troubled homeland, nor does he have any desire to return.

"Hell, I've been here too long," he says. "I'm a Texas boy now."

Instead, Crescent's handling of this longtime tenant could be just another example of corporate ham-handedness. In 1999 the company backed out of a deal with the City of Houston to build the convention center hotel after deciding that $65 million in taxpayer subsidies wasn't enough. The company -- which owns ten million square feet of office space, including Greenway Plaza -- also has sued the city for leasing the municipal-owned Compaq Center to Lakewood Church.

Regarding the Fotehs, Crescent's real motivation could be simply to wiggle out of the five-year lease. The family pays $12 a square foot in a building that commands on average about $20.

Indeed, the day Freddy's reopened after the court order, Foteh began receiving mail addressed to an outfit called N&M Enterprises. Harris County records show N&M operates the Out to Lunch Cafe & Deli in the Crescent-owned Post Oak Central Two near the Galleria. Its newest business registration is for the Uptown Grill & Deli at 1800 West Loop South. N&M registered for that name with the county clerk on January 24 -- the day before Crescent evicted the Foteh family. Maliwan Mak, N&M's president, declined to comment on her company's plans to expand.

Whether or not Crescent has already cut a more favorable deal with a new tenant is unknown. But the company could use the money. Crescent is suffering from an ill-advised buying spree after the company went public in 1994, including a failed bid to enter the casino business in Las Vegas. With shares sagging in spring 1999, the company agreed to sell $500 million of office properties and "non-core assets" in other states.

However, financial troubles continue for the company. In January, Standard & Poor's issued a negative Credit Watch on $600 million of Crescent's unsecured debt. Earlier this month, S&P issued another ratings watch after a related company, Crescent Machinery Co., filed for Chapter 11 bankruptcy protection in Fort Worth.

Still, the Fotehs know that in a legal battle, they can't hope to match the resources of Crescent, one of the largest real estate companies in the nation. The family's lawyer, Daniel Jackson, admits that settling the case through mediation would probably be best. A civil action for breach of contract and lost revenues may be too costly.

"They're not wealthy people, and if they win a jury verdict and have $30,000 in legal costs, where does that leave them?" Jackson says. Nadir Foteh says he's not inclined to remain where he's not wanted, but he won't be bullied out of business. He's put about $65,000 into Freddy's, and the loans aren't close to being paid off.

If Crescent officials wanted to change tenants, they should have done it before or after the current lease, Foteh says. "Don't just decide you don't want me in here, then put me out on the street with a moment's notice."