Springdale votes to settle Subway case, local owners unhappy

SPRINGDALE — After five years of fighting a lawsuit, it appears the town of Springdale and the Izzy Poco sandwich shop have finally come to an agreement which would consist of a payout to the company and a change in the town’s formula ordinance.

Representatives from Springdale met with Izzy Poco LLC and a mediator in June to arrange a settlement after years of litigation, and the settlement could cause a drastic change in the town’s atmosphere, which has made local business owners unhappy.

Before the Town Council can change the ordinance however, the Planning Commission and council must host public hearings, which are slated for Aug. 5 and 12.

The history

Springdale is known as the Gateway to Zion National Park, and the nickname fits, as the town sits right at the entrance to Zion and is, for many, the starting point for visitors to the park, as a shuttle system links the town into the park.

A Subway sign in the window of Izzy Poco, which now might be able to open, Springdale, Utah, July 17, 2015 | Photo by Nataly Burdick, St. George News
A Subway sign in the window of Izzy Poco, which now might be able to open, Springdale, Utah, July 17, 2015 | Photo by Nataly Burdick, St. George News

The town is home to many park-centered businesses, while keeping a small-town feel with a population of just over 500.

Springdale is known for its quaint atmosphere, something residents showed they wanted to keep when surveys went around to form a general plan for the town in 2005.

An ordinance, known as the formula or franchise ordinance, was written into the town’s code to keep chain restaurants and delis out of Springdale that would disrupt the atmosphere of the town.

In 2009, the town gave a business license to Izzy Poco to open a sandwich shop, and the owners began trying to open for business with a hopeful date of June 11, 2010, according to a legal complaint filed with U.S. District Court, District of Utah, Central Division.

The state registry lists Springdale resident Jack Fotheringham as owner, as well as out-of-state owners Edger Irizarry and James Ribera, with agent Renee Goodnow.

Fotheringham also owns Tsunami Juice and Java, which shares a building with the prospective Izzy Poco shop and has been able to do business in Springdale.

By May 2010, they were ready for inspections, and according to the complaint, passed a restaurant health and safety requirements inspection by the health department.

The hold

The restaurant also needed to be inspected by a fire marshal, but the complaint said that Joe Barker, a member of the Rockville/Springdale Fire District, refused to inspect the restaurant, knowing that they planned to sell Subway products out of it.

June 9, 2010, the town sent Izzy Poco a fax saying that they would not renew their business license, which was up for renewal at the end of June, until they removed all Subway-related products from the restaurant.

They also refused to renew the license on grounds that they did not provide required information about the owners, such as contact information and addresses, on the renewal form.

Izzy Poco then sued the town, claiming the formula ordinance violates the Commerce Clause of the U.S. Constitution.

They also alleged that the town was discriminating against the owners, some of whom are minorities.

The town and Izzy Poco have been in litigation ever since, but it seems the lawsuit is nearing its end, as both sides have signed an agreement to settle and dismiss the case.

The settlement

The settlement means the town’s insurance company, United Local Governments Trust, will pay about $787,000 in damages to Izzy Poco, and Springdale will have to rescind the formula ordinance.

However, any franchises in town would still have to adhere to certain exterior rules already present for Springdale businesses.

Franchises would not be able to have drive-thru windows and would have to adhere to certain color, style, size and sign restrictions.

Basically, Springdale Mayor Stan Smith said, the town will have some control over the outside of the business, but will not be able to control how they decide to operate, and that includes whether they sell franchise products.

In a letter to the town, Smith explained that part of the town’s decision to settle came from pressure put on them by their insurance company, which refused to renew their contract with them set to expire at the end of June if they didn’t settle.

So, the Town Council voted in favor of the settlement June 29, after meeting with Izzy Poco, their lawyers and a mediator.

While both sides have agreed to the settlement, there still are a couple of steps left before the settlement and all of its requirements are completed.

First, Izzy Poco must file to dismiss the case in the United States District Court for the District of Utah and in the United States Court of Appeals for the Tenth Circuit.

Once the case is dismissed, the Town Council will hold a public hearing, which is required by law before they can change an ordinance.

The Planning Commission will hold a public hearing Aug. 4 to make a recommendation to the council, followed by the council’s hearing Aug. 12. Both meetings will start at 5 p.m. at the Springdale Town Hall.

A public hearing was initially slated for July 8 but because Izzy Poco had not signed yet, the hearing was postponed.

Holding the hearing after the case is dismissed will allow the council to give residents information they couldn’t have before, according to Smith’s letter, because of the pending litigation.

The Town Council seems determined to move forward with the ordinance change, however, as Smith and other council members have said on multiple occasions that they made the decision based on information they have that they are unable to share until the case is dismissed.

“I’m very saddened by having to make this decision,” Smith said. “It wasn’t an easy decision and it wasn’t a knee-jerk reaction.”

Conflict with citizens

Some Springdale residents have questioned the council’s decision to settle, while others have stood up and praised the council for making a difficult decision.

Town members expressed in a Planning Commission meeting July 7 that they weren’t sure the insurance company should have that power over the council’s decision.

The town’s attorney, Greg Hardman, said since the insurance company tendered the town’s defense, the insurance company can dictate the direction of litigation.

Other citizens said the Town Council hasn’t been as forthright with sharing information as they’ve claimed to be.

Two former Springdale mayors, Pat Cluff and Bruce VanderWerff, and former councilmember Louise Excell, wrote an open letter to the council saying they haven’t been open enough with the information they can share.

There is more information that you are able to reveal to Springdale residents; we know because we were able to discover details that are not privileged but that you haven’t shared with the public. We think the residents of Springdale will understand why you believed that you were acting in their best interests if they simply have more information.  As it is, people are still bewildered and stunned, and that only leads to speculation and rumor.

The letter asks the council to put a moratorium on formula business license applications until they draft a new ordinance.

This new ordinance should make formula businesses a conditional use, the letter says, making the Planning Commission award business licenses on a case-by-case basis.

They also suggest following the example of other towns in the country that have had restrictions on where and how franchises could operate that withstood constitutional challenges.

The letter said that Springdale’s ordinance was similar to one in Islamorada, Florida, which was also overturned in 2011.

Local business owners aren’t happy either, with some having met in the time since the council voted to settle to discuss their options with the city.

At one point, business owners were even contemplating suing the city themselves, Flanigan’s Inn owner Larry McKown said, but have since decided against that.

They are still looking at other approaches, McKown said.

What they don’t want, McKown said, is for Izzy Poco’s owners to be able to say that Springdale is trying to keep franchises out to keep competition down for local businesses.

“They claim that that’s the only reason we’re trying to keep them out,” he said. “It isn’t. It’s both. It’s the fact that it degrades the whole town but it also … it’s not good for our business, either.”

Residents have wondered why Izzy Poco’s owners are causing so much trouble for the town, and according to the July 7 Planning Commission meeting minutes, an audience member asked Fotheringham directly.

Fotheringham responded that as a long-time resident of the town, he felt it is his right to open a restaurant as he sees fit.

His father was once mayor in Springdale, Fotheringham said, and during his time in office, residents similarly objected to The Bit and Spur restaurant opening.

Fotheringham also said that during his time in the United State Air Force he was trying to uphold and protect the Constitution, and that’s what he’s trying to do now.

We don’t have to ask permission to live in the Town or open a business,” the minutes say. “That’s why we’re doing it.”

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11 Comments

  • laytonian July 22, 2015 at 3:14 pm

    Izzy Poco should realize that Subway is on the downslide, quickly.
    The stock is down, sales are down … and it doesn’t hurt that their spokesman hired a child pornographer to lead his “foundation”.
    (Of course, that foundation is merely a front to pass out Subway coupons to children….but it’s a nice tax write-off, eh?)

    WHY can’t they just make their own cheap sandwiches without a Subway franchise? Put up a sign that says GREAT SANDWICHES, make them from quality meats and great bread, and charge $3 more.

    • Willie July 22, 2015 at 5:44 pm

      This is hands down the best comment I have ever read on St, George News. Entrepreneurial, stock, and sandwich building advice. Tied in with no less than a Subway, corporate sponsored, pedophile sex scandal conspiracy. Epic!!

    • Real Life July 22, 2015 at 9:42 pm

      Subway has a pedophile for a spokesman? Well they should look no further than a few miles down the road. That Subway in Colorado City should be a goldmine! I mean they actually WORSHIP pedophiles there!

      • Free Parking July 23, 2015 at 10:23 am

        You sound like one of those pedophiles you sure are interested in them aren’t you.?

        • Real Life July 23, 2015 at 12:18 pm

          Nope. Not from here. Not into little kids. So therefore unlike yourself, I do not have an aunt mom and uncle dad.

  • fun bag July 22, 2015 at 3:49 pm

    subway = nasty, overpriced garbage..

  • Free Parking July 22, 2015 at 4:53 pm

    Dang sub making tweekers

  • Harold S. July 22, 2015 at 5:12 pm

    I believe that Subway will have a very difficult time in Springdale, even from the visitors. And I hope they do. I know that the local people will boycott and not support the business as they should. Most people who are on vacation and visiting, want to try something new, not something that they can get at home. Its terrible that towns with this type of atmosphere are strong armed into changing their ordinances which deviate from the atmosphere they want. A message to the local Springdale people, Don’t blame your local politicians for this collapse, its not their faults, they had no choice. After all they were strong armed by the longest legalized racketeering mafia in the U.S. , the insurance companies who really control every move we make. If you do not do what they say, they will drop you. They call it damage control and they do not care about anyone or anything except their profits. They are all backed by the government who pass laws requiring everyone to have insurance, and if you don’t you are a criminal.

    • voice of reason July 22, 2015 at 7:46 pm

      You’re nuts. Subway would be the busiest restaurant in town over night.

  • samiam July 22, 2015 at 11:10 pm

    I know of a local business that has been selling Starbucks products for years and has a big Starbucks logo on their window.

  • Free Parking July 23, 2015 at 12:09 am

    Hey Harold…. LOL. Ha ha ha ha ha really.? LOL…. Ha ha ha ha ha ha ha

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