Z Cycle Shop Evicted From Capitol Hill Spot After Landlord Dispute

Z Cycle Shop is no longer open at Ninth Avenue and Corona Street, after a months-long legal battle over shop modifications and landlord consent ended with an eviction order being dished out last week to the establishment.

In 2021, Z Cycle signed a ten-year lease for a unit at 1025 Ninth Avenue, the building owned by Katina Gatchis and largely managed by her son George Gatchis. The pair operate Capitol Hill Liquors across the street, and took issue with changes that were made to the unit, which the court agreed amounted to a breach of the lease.

Dimitri Rumschlat, Z Cycle's owner, was working to transform what had long been a restaurant inside the space into a new bike shop. He contends that all the modifications he made — from knocking out an ADA bathroom to removing old kitchen equipment — were done for that purpose, and that his landlord should have known that such renovations were necessary.

The lease specified, however, that such projects required written landlord consent and approval, which Rumschlat did not have. He also made the modifications without required architectural drawings — another requirement.

“I didn't actually realize that I was supposed to get architectural drawings,” he says. “I removed the restaurant, and I put grates on the windows after I got broken into seven times in a year and twice in one week.”

He says he kept the Gatchises informed of everything he was doing despite the lack of documentation, and feels that a “negative personal interaction” between himself and George led to the souring of the relationship between the two businesses and the legal proceedings. Katina’s lawyer, Dammon Semmens, says that isn’t the case at all.

“This is a regrettable result, but he was in violation of the lease, which the court decided after a multi-day hearing,” Semmens explains.

The bike shop, which has been around in Denver since 2019, opened its Capitol Hill location in 2021. Just a year and a half later — in February 2023 — it faced a demand for compliance and/or possession after Rumschlat put up security grates to prevent break-ins following the occurrence of two separate incidents in less than two weeks at the end of 2022, which totaled over $30,000 in losses each; he felt he couldn't wait to protect his business.

The Gatchises argue that the grates create an eyesore and were installed in a way that permanently damaged the shop’s windows. Most important, they contend that Rumschlat putting them up violated his lease. The court agreed after a hearing on November 30.

In their February legal notice, the landlords also said that removing a cooking hood and industrial coolers, knocking out an ADA bathroom and hosting a coffee and music business in the basement were lease violations on Z Cycle’s part.

According to Semmens, the two parties tried to negotiate from March to August but could never reach an agreement. Therefore, Katina filed an eviction proceeding at the end of August. The hearing originally began October 27, but Katina is a native Greek speaker, and it was determined that she needed an official court translator and new hearing aids before the matter could proceed.

This isn’t the first time the space has been subject to a messy legal matter: Z Cycle used to house a fried chicken joint, which closed in 2017 and sparked another legal confrontation between the Gatchises and tenants. Craig Caldwell, the restaurant's owner, suggested at the time that his lease be transferred to Rashad and Zuned Khan, a Muslim father and son who wanted to open an Indian restaurant in the space.

However, Caldwell recorded Katina telling him to find Americans to fill the property rather than the Khans, who had immigrated to the United States. That resulted in a lawsuit that was settled out of court, with Katina paying Caldwell and the Khans $675,000.

So far this time, the Gatchises have prevailed. But the question of damages is still up in the air, with a second part of the proceedings yet to come to determine whether Rumschlat owes the Gatchises money for the changes he made to the space. The amount could be in the hundreds of thousands of dollars unless he can convince the court otherwise, Rumschlat says.

According to Semmens, the hope is to reach a settlement during the process leading up to a hearing, which he adds could take over a year. In the meantime, Z Cycle and its supporters worked all of December 1 and 2 (the date it had to be out of the space) to move its inventory to its second location, at 3217 East Colfax Avenue. That new location opened in July inside of Collins Bikes.

“We had over 100 people show up to help me come and clean and sell off our inventory,” Rumschlat says. “Some people I've never even met. They said, ‘We just really like you guys and are really sad that you're leaving.’”

Though he says Capitol Hill has been his home and he’s sad to leave the neighborhood, Rumschlat calls the eviction a blessing in disguise, because the overhead there was much higher than at the new location on Colfax.

He’s excited to keep the Z Cycle legacy going as he waits for the next steps in the legal proceeding.

“People come to Z Cycle because we're chill and we make them feel okay,” he says. “We can get fancy if you want, but we're just trying to have fun, and we're going to keep that spirit alive.”