Kevin Sousa, a visionary chef with fiscal issues on his plate

He's building Superior Motors restaurant in Braddock with foundation, nonprofit and crowdsourced support. While debts dogged his previous ventures, he’s working to clean up his balance sheet.




Since 2009, high-profile chef Kevin Sousa has carved out a niche by launching gourmet restaurants in distressed Pittsburgh neighborhoods.

His latest unorthodox venture, Superior Motors, might be his riskiest yet. Taking shape across from a working steel mill in Braddock, one of Allegheny County’s poorest communities, it is expected to be an ambitious mix of high-end dining, a no-cost training program, free room and board for interns, discounted dining for locals, all with the goal of helping the struggling borough.

Seeking capital, as well as a buy-in from the community, Mr. Sousa took to Kickstarter, a popular online fundraising platform, in December 2013. The monthlong campaign grossed $310,000 from 2,026 donors, making it Kickstarter’s most-funded restaurant project to date.

As he raised new money, though, old debts dogged him. Sysco Corp., a food supplier, sued him Feb. 13 for $25,173.96. That was only the latest in a string of liens and legal filings by creditors against Mr. Sousa during the past several years.

During that period, Mr. Sousa has obtained nearly $900,000 in loans and donations from both private sources and public entities to fund his restaurants. They include the Heinz Endowments, East Liberty Development Inc. and the Enterprise Zone Corp. of Braddock. Of late, one of his most important allies in securing capital has been Braddock Mayor John Fetterman.

 

Even as Mr. Sousa sought financing, he said, he stretched himself too thin, made ill-advised business decisions and scrambled to pay his bills and stay current on his debts.

In addition to two mortgages on a house in Polish Hill, Mr. Sousa was on the hook for a $150,000 loan from the Urban Redevelopment Authority of Pittsburgh for his first restaurant, the successful Salt of the Earth in Garfield; the state Revenue Department had filed liens for unpaid sales taxes at two other restaurants; checks had bounced for his Station Street Hot Dogs, where he had to secure high-interest financing from a cash-advance lender; and he had defaulted on a $75,000 promissory note as well as lease payments on the space in East Liberty for his Union Pig and Chicken.

Under Kickstarter’s rules, Mr. Sousa was not obliged to disclose his financial status or history.

Mr. Sousa sees his fundraising for different ventures as separate, not interconnected.

“It’s unnecessary to disclose any of my other businesses’ dealings,” he said.

But experts in business ethics say that disclosing past problems is usually the best route for entrepreneurs while trying to raise capital.

“Individuals and organizations that do disclose, that do build an element of trust with their employees, their customers their investors, often do well,” said James Weber, a business ethics professor at Duquesne University.

During a recent two-hour interview, Mr. Sousa said he is in the process of cleaning up his debts.

“Right now I’m working with my accountant and my attorney, in large part because of your inquiry, to get as many of these things expunged as we can,” Mr. Sousa said.

Tough past

Born poor in McKees Rocks, Mr. Sousa is a self-declared recovering alcoholic (sober since 2009) who is the father of two daughters, one with severe disabilities.

Well-spoken, passionate and creative, Mr. Sousa used the kitchen to elevate himself from his humble beginnings. He has been a nominated regional semifinalist for the prestigious James Beard award and has had an undeniable hand in Pittsburgh’s surging restaurant renaissance. His limited-seating pop-up dinners have become such a hot ticket that one recently sold out, he said, in “15 seconds.”

“It would have been very easy for me to end up in the system had I not found a path of cooking. I mean I grew up in McKees Rocks. I have many friends who are either in prison or deceased.”

Mr. Sousa touts his liberal hiring policies, having rubbed elbows with ex-cons, recovering addicts and Ivy Leaguers. He speaks proudly of opening Salt of the Earth in what was then a Garfield neighborhood rougher around the edges than it is today.

“Salt was my baby. It was my first restaurant on my own,” Mr. Sousa said, while acknowledging his former partners, Doug and Liza Cruze.

Salt gave Mr. Sousa national recognition and jolted the Pittsburgh dining scene.

He kept experimenting with restaurants in transitioning neighborhoods, opening Station Street and Union Pig and Chicken in quick succession.

Now, at 40, he said his focus is on Braddock.

“Being a famous chef, being a hotshot in the culinary world is no longer — and I’ve been on record saying this — I no longer want to be part of the scene. ... I want to be here and I want to be part of something that’s really special. I know it sounds corny, but it’s legit.”

Salt, Station Street, Union

In less than a year, Mr. Sousa gave up ownership of two restaurants and closed the third.

He sold his share in Salt of the Earth to the Cruzes in February 2014. At that time, the couple took over responsibility for the $150,000 Urban Redevelopment Authority loan, but Mr. Sousa is still listed in the paperwork as the borrower of record.

The Cruzes said little about Mr. Sousa’s departure beyond thanking him “for his dedication,” in the press release announcing the change. They declined to comment for this story.

On Nov. 1, just shy of three years after the place opened, Mr. Sousa announced that Station Street would close.

He made his third exit in January, when employee Jessica Keyser announced on social media that she would become the owner of Union Pig and Chicken.

Ms. Keyser took over Mr. Sousa’s financial liabilities, which include the building lease, a promissory note from East Liberty Development Inc. and debts from private vendors.

“I now have learned from some judgments that I made that going into opening two restaurants simultaneously undercapitalized was not a great idea,” Mr. Sousa said.

The chef and the mayor

Mr. Sousa had his concept for Superior Motors in place by late 2013, but knew he’d have trouble financing it because of its location and his own financial history. He calculated he would need $760,000 to launch.

An integral part of raising that money was John Fetterman.

The mayor has become the biggest cheerleader for the once-bustling steel town and he has started a nonprofit, Braddock Redux, that is involved in various good-works projects.

“Braddock, of course, doesn’t have a restaurant and hasn’t had one in probably a generation. And I thought, wouldn’t it be great?” Mr. Fetterman said. “I asked my friend to put us together and that sort of started the conversation.”

On the day they toured Braddock, within four hours, Mr. Sousa was hooked.

“I basically was asking him about real estate, not to open a business, but as a residence. The place just is, I use this phrase, there’s just something in the dirt down here. Either you get it or you don’t,” Mr. Sousa said.

Mr. Fetterman said he didn’t know much about Mr. Sousa’s finances.

“I don’t know the exact details of his business, but he’s always been very forthcoming that he’s had some scrapes and some of his exits from his last two restaurants may have had some hair on them, but he’s never held anything back in terms of that when I’ve asked or when we’ve talked.”

So Mr. Sousa rolled out the Kickstarter campaign on Dec. 6, 2013.

“Without a doubt, the largest challenge that we face is opening a for-profit restaurant within a community that is well outside the traditional market-driven dynamics,” Mr. Sousa’s campaign page said. “Through Kickstarter, YOU DECIDE, not the banks, and that is exactly how we want it.”

“It’s a way that you can kind of put everything out there,” Mr. Fetterman said. “The proverbial: You run it up the flagpole and see who salutes.”

Mr. Sousa set a $250,000 goal; if it wasn’t met, he wouldn’t get any money. A month later, he exceed the goal by $60,000, netting $261,000 after Kickstarter’s fees. Mr. Fetterman’s two brothers donated $5,000 each.

“Superior Motors will never exist without your support,” the Kickstarter page said. “We know from the many events that Kevin and Braddock Mayor John Fetterman have hosted in the community that Chef Sousa’s patrons will follow him to Braddock.”

The connections between Superior Motors and Braddock Redux, Mr. Fetterman’s nonprofit, and the maverick mayor himself are complex.

In June 2013 Mr. Fetterman bought the Braddock Avenue property housing Superior Motors from his sister, Kristin Fetterman, and moved in upstairs. He provides the restaurant space to Mr. Sousa for free.

“It was more like, I have the space here. The downstairs was empty and I had no plans for it,” Mr. Fetterman said. “It had no highest best use or anything like that. And I thought, well, if we’re gonna have a restaurant there, this could be a place where you could put your restaurant.”

Two months later, Mr. Fetterman sold Mr. Sousa his old house on Beech Street, valued at $21,300, for $1. Mr. Sousa, his wife, Holly, a Pittsburgh Public Schools special ed teacher, and their two daughters, now live there.

“John called me. He said, ‘I know you’re looking for real estate, I have this building. It’s not worth anything on the market. It’s an old furniture warehouse that I bought for $2,000, I feel it would be a perfect fit for you because I know that you’re looking for an accessible building,’ ” Mr. Sousa said. “So we paid the taxes on it. We bought it for next to nothing and, yeah, I moved my family to Braddock.

“But giving the impression that I’m making out like a bandit is disingenuous and I just don’t feel that it’s accurate.”

Below: explore a timeline of Kevin Sousa’s recent career as a chef around the Pittsburgh region.

Superior takes shape

The Superior Motors build-out is in full swing.

On a morning last month, a team was at work repurposing the former car dealership into a restaurant with large light panels, custom-made ironwork and a decor reflecting the town’s industrial heritage. As they prepared the floor to pour concrete. Mr. Sousa pointed to walls facing the Edgar Thomson plant to be replaced with “museum-quality” glass, while barely discernible recessed lighting would be on timers to mimic the mill lights.

The framework for the kitchen, to include a wood-fired grill, lay in progress around the corner. The dining area will have custom-built communal tables, banquettes and a private dining room. Outside the restaurant sits a newly built oven where staff will bake bread.

The restaurant will be dinner-only at the start. Mr. Sousa hopes to start training neighborhood residents after it opens. He expects four to 10 to be working there after the first six weeks of operation, swelling to “85 to 90 percent” of his staff. But it will take time. “There’s not a giant pool of restaurant workers in a 2,000-person population,” Mr. Sousa said.

He’s still working out the details of making the restaurant affordable to residents, so that income will never “inhibit someone from eating at Superior Motors.”

“Maybe — this is just spit-balling — maybe there’s a line that says ‘pay it forward,’ and it goes into different part of accounting to help offset costs,” he mused.

Past the dining room lies a 1,000-square-foot incubator space for other projects -- potentially a communal kitchen and a black box theater.

On the upper level, up what had been an indoor car ramp, past Mr. Fetterman’s family residence, lies the greenhouse and raised beds on the roof facing the mill. Mr. Sousa said that Grow Pittsburgh’s Braddock Farms will produce 75 percent of vegetables during the growing season.

Even in the freezing temperatures, Mr. Sousa looked across the street and marveled at the mill as white plumes drifted from smokestacks. “I think the mill is going to be an attraction,” he said.

Other funders

On the anniversary of the Kickstarter campaign, Mr. Sousa wrote on its Web page: “In addition to the 2,026 amazing people who helped us reach our Kickstarter goal, there is another group of folks who have come on board who we would also like to mention. The Enterprise Zone, The Heinz Foundation, The Laurel Foundation, The Buhl Foundation ...”

These foundations have no direct business relationship with Mr. Sousa and his restaurant. The foundations made grants to Braddock Redux.

In turn, Braddock Redux has either used the money for community projects that will also benefit Mr. Sousa’s restaurant — such as the construction of a communal oven right outside Superior Motors with funds from the Buhl Foundation — or loaned the money to Mr. Sousa.

Frederick W. Thieman, president of the Buhl Foundation, acknowledged that the $10,000 grant last year for the oven would also aid Superior Motors, a private, for-profit business.

“We analyzed that as an interesting community development technique. We were aware that it would have collateral benefits for Superior Motors,” Mr. Thieman said. “But we consider that purely a collateral benefit and not the core of the grant.”

Last year, the Laurel Foundation gave Braddock Redux a $50,000 grant to fund what president Elizabeth J. Tata described as a “community kitchen culinary education program.”

“Kevin Sousa kind of gave up all his restaurants and everything and is going to dedicate everything to this program. I mean it’s amazing what he’s doing,” Ms. Tata said.

When asked about what she knew of Mr. Sousa’s past financial problems, Ms. Tata said: “I don’t want to comment on anything like that. I don’t know anything about Kevin Sousa’s financial situation. Our grant is to Braddock Redux, and I trust what they’re doing. I don’t want to be put in an uncomfortable situation to answer. Are you doing a negative story on this? All my comments are positive.”

In May 2014, Braddock Redux received a $190,000 grant from the Heinz Endowments. Of that, $150,000 is earmarked as a loan to Superior Motors for equipment. The remainder is to be used as a grant supporting a classroom-based culinary arts training program for young people in the community.

“We’re talking about a blighted district,” Heinz spokesman John Ellis said. “We recognize that it is a risky endeavor in a deeply distressed area, but we also believe very strongly that it can be a benefit if successful.”

Braddock Redux, he added, would be responsible for undertaking due diligence for the loan.

“We know them well,” Mr. Ellis said. As for Mr. Sousa’s track record, “Personally, I’m not aware of his financial background.”

More recently, Mr. Sousa has tapped the Enterprise Zone Corp. of Braddock, which is seeded with state money from the Department of Community and Economic Development.

The nonprofit, “committed to a $175,000 low-interest loan through our enterprise program” to Superior Motors 15104 LLC, said Charles Starrett, enterprise zone coordinator.

The corporation lists Kevin and Holly Sousa as organizers.

In November $63,769 of the loan was released at a fixed interest rate of 3 percent.

Mr. Fetterman said that while he is on the Enterprise Zone Corp.’s board of directors, he does not vote on loans and had no influence over the decision to lend money to Mr. Sousa.

Mr. Starrett said Mr. Sousa is on schedule with his payments.

In a November email exchange between Mr. Starrett and the corporation attorney’s law firm provided by Mr. Sousa, Mr. Starrett responded to a question about Mr. Sousa’s $760,000 in funding used to secure the loan. It reads: “Mr. Sousa has provided us with additional funding he’s secured. EZCB is satisfied with this.”

In a document prepared for the Pittsburgh Post-Gazette, Mr. Sousa itemized that funding. He included all the money from the three foundations — as well as the $175,000 loan from the enterprise zone. There are also two private investors, one providing $25,000, the other providing $50,000.

The larger investor is Mr. Fetterman’s family.

Mr. Fetterman said the money was largely used to purchase vacant lots adjacent to Superior Motors. His family, he said, does not expect any repayment or return on its investment.

A modest salary

As workmen wield power tools inside the shell of Superior Motors, Mr. Sousa said he does not know how much he will pay himself when the business opens, tentatively in June.

“Right now times are skinny,” Mr. Sousa said. “But I’ll be drawing a salary that is modest but helpful and that’s it.”

Over the past few years, Mr. Sousa has become a familiar sight in his adopted town. He volunteers during community events. He holds dinners in his home. And Superior Motors has garnered national interest, stirring people’s excitement about what he will accomplish.

While Mr. Sousa splits his attention among developing dishes for his menu, overseeing the Superior Motors renovation and attending to the myriad administrative details required to open a restaurant, he believes he has learned from his mistakes.

No longer saddled with the burden of running three restaurants at once, the chef hopes his star power can help make Superior Motors a success and at the same time lift Braddock and its residents.

“My goal has only been to open restaurants in areas that didn’t have restaurants to service the neighborhoods,” Mr. Sousa said. “And I went into them undercapitalized and overly ambitious and, quite frankly, I had some hiccups and I’m doing my best to make all of those things right.”

Mr. Sousa, who has left a trio of restaurants behind, says he is committed to this one.

“What it comes down to is I’m doing something that nobody else would have the guts to do and I’m doing it for a reason that I believe in and the trajectory of my career has brought me to Braddock for this. So that’s it. That’s what I have.”

Jonathan D. Silver: jsilver@post-gazette.com, 412-263-1962 or on Twitter @jsilverpg. Melissa McCart: 412-263-1198 or on Twitter @melissamccart.





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