Sexy Pizza is losing its Capitol Hill restaurant after its owner criticized the building’s anti-homeless landscaping

The restaurant will offer delivery and takeout from a Lincoln Park ghost kitchen while looking for a full-time spot.
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A Denver Homeless Out Loud locker at Sexy Pizza in Capitol Hill. (Kevin J. Beaty/Denverite) kevinjbeaty; denver; denverite; colorado; sexy pizza; lockers; denver homeless out loud; storage; capitol hill;

For the first time since Sexy Pizza opened 15 years ago, the restaurant won't have a Capitol Hill location.

Restaurateur Kayvan Khalatbari said the business's landlord, Katherine Diane MacRossie, has refused to renew the lease at the pizza chain's 1018 East 11th Avenue location.

"Fifteen years, we've never been late on rent, let alone missed a payment," he said. "And we've been great tenants. We've been good stewards of that block, I think, and of the Capitol Hill neighborhood. We are obviously very engaged in the community and philanthropically and with the local schools and the creative industry and obviously take very good care of our employees with our ownership stock and benefits and pay and things of that nature. But this woman has just always had something against us."

Over the years, he said, the business has put more than $200,000 in renovations into the space. MacRossie hasn't returned our request for comment.

Sexy Pizza started trying to renew the lease a year ago, Khalatbari said. Over the months MacRossie declined to commit, saying she was waiting to see what the right market price would be.

Six months ago, he and the team revisited the lease with her, noting that Sexy Pizza had employees and customers to think of. She stalled again, he said.

In March, Khalatbari criticized rocks installed around the building designed to deter unhoused people from camping on the block. Khalatbari, who said he had been homeless himself when he opened Sexy Pizza, had been blasted by community members for the landscaping and wanted to correct the record. He opposed the installation, both because it was designed to keep unhoused people from camping in the area but also because it was making it hard to do business.

"It's kind of a double slap in the face on that front, in that it goes against everything that we believe in, and people are now associating this terrible practice of placing rocks in front of the store -- they're associating that with us," he said at the time. "And it's made it harder on our drivers to do their job, especially on busy weekend nights."

Shortly after Denverite's story on anti-homeless architecture at the building came out, Sexy Pizza attempted to renew the lease, and he said MacRossie confronted him about the article.

"She said that she essentially didn't appreciate getting thrown under the bus on the homelessness issue. And we don't have an interest in renewing your lease at this time," recalled Khalatbari.

A week ago, he said, the company tried to convince her to extend the lease on a month-to-month basis and for double the price, and she still said no.

Sexy Pizza has managed to find a ghost kitchen at Cloudkitchens to work from in Lincoln Park. The team has a month and a half to build out a kitchen and set up an operation, and the goal is to avoid any disruption in business.

"We're not going to have any dine-in at this temporary location," he said. "She's really putting our business in a very rough spot for no reason and with no warning, which is really unfortunate."

In the meantime, the team is on the hunt for commercial real estate to buy or lease, where they can set up a new Sexy Pizza in Capitol Hill, the Golden Triangle, Uptown or another part of Central Denver. The business model might shift away from dine-in and look more like Benny Blanco's, with a take-out window.

"If there are any landlords or people looking to sublet, probably somewhere between 500 and 1000 square feet, we'd be really interested in talking with them," Khalatbari said.

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Once homeless, Sexy Pizza co-founder Kayvan Khalatbari can't stand the rocks on the sidewalk in front of his Capitol Hill restaurant

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