Friday, January 11, 2013

Saying Goodbye.....

It is difficult to make a statement, clarifying the inaccurate information being disseminated,  that is not lengthy.  The details surrounding this situation are based on events and conversations that span over the past two and on-half years.  I will do my best to keep this as short as possible.
I feel the following are key facts:
Below is my original email to Mr. Stearns sent on February 24, 2010, sent after we initially spoke regarding my interest in leasing the building located at 3313 Harborview Dr.  As you will see, it was not my intension to open a restaurant in this location, but rather a coffee shop on one side with a retail store on the other side.
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  • After correspondence by way of email, phone conversations and a walk through of the property, Mr. Stearns advised me that he liked my business plan and intended to allow be to lease the space.  He said that due to his busy schedule as well as some additional remodeling that needed to be done to the inside of the building that it would likely be a few months before I would be given the keys.  I asked if he would remove the for lease signs, and he agreed.
  • At that point I applied for the LLC, and based on my experience as the Director of Social Media for more than one successful local business, I opened the “Red Rooster Cafe and Collectibles” Facebook page.  I continued building a buzz through Social Media, and continued the process for the following few months.
  • On or about May 1, 2010 I was given the keys to the building and submitted my business proposal to the city planning department.  I received a letter from Diane Gagnon advising that my proposal had been denied based on that the zoning restrictions would not allow the sale of anything other than “marine products” and “food”.  This left me feeling unsure as how to best move forward based on my lack of experience in the restaurant business as well as my concern of being undercapitalized.
  • Along with the letter I was also advised of the following restrictions for a restaurant located within the historic district of Milleville.
    1. Hours of operation were limited to between 7am and 7pm only
    2. There was to be No sale of beer, wine or spirits
    3. The building was limited to using electric appliances and not gas or propane
    4. I was not allowed the use of a deep fryer
    5. The amount of space for storage and refrigeration was extremely limited
  • While considering my options, I posted the developments on the Facebook page and immediately began to receive Comments from the community suggesting despite the limitations that downtown Gig Harbor truly needed a kid friendly cafe.  I discussed all aspects my concerns with Mr. Stearns and with his encouragement, I continued with designing what would soon become a “cafe” in which both rooms on the lower level of the building would be used as an eatery without the ability to sell collectibles or home decor.
  • It was at this time that I began to buy the items needed to open the Red Rooster Cafe, I designed the menu, logos, signs, and interior, spending time painting, planning and creating.... It was not long before I realized that the costs to open a restaurant a substantial and between my savings and the money invested initially by another community member, that I was definitely under capitalized and would not be able to move forward.
  • I arranged a meeting Mr. Stearns at which point I told him that I was unable to continue and that he would need to lease the building to someone else.  I did not ask Mr. Stearns to help me to move forward and did not ask him to lend me the money.  However, he advised me that he had watched me work extremely hard and he would buy the additional items needed in order for me to continue moving forward.  He suggested that he buy the convection ovens and the 2 refrigeration units needed, as well as any additional items necessary for me to open the restaurant.  We agreed that whatever he bought would remain on the premises if the Red Rooster ever closed.
  • I told Mr. Stearns that I appreciated his faith in me and asked him if he would like partial ownership.  He declined and encouraged me to proceed with working to open the Red Rooster.
  • August 2nd, 2010, the Red Rooster opened.  Beginning the day I was given the keys, I worked at the Red Rooster for 20 months, often as much as 14 to 16 hours a day, without taking a single day off.  I realized quickly that I would need to work either cooking or serving seven days a week.  It was my desire to keep my overhead as minimal as possible.  As estimated, during the summer months the business was quite busy, however during the winter months sales dropped dramatically.  In October of 2010 I saw the sudden decrease in sales and immediately reduced my staff.  In addition, sadly on January 4, 2012, due to his own personal struggles, my head server took his own life.  I redoubled my efforts and worked hard to continue to make the Red Rooster a success.
  • My relationship with Mr. Stearns was important to me and beginning from day one I made it a priority to communicate regularly with him regarding progress, sales and setbacks.  Each month when business was slow, I would personally contact him, being honest and open with him when I was not able to pay the full amount stated on the lease.  His response was always that I should pay “what I was able and keep working hard.”  He told me he did not need the money and that he wanted the Red Rooster to succeed.  I willingly did so.
  • Over the two and a half years that the Red Rooster was open the summer months were substantially busier while the winter months were always a struggle.  This I believe was the case for many of downtown Gig Harbor’s small businesses.
  • Each month, based on sales, I would write a check to Arabella’s landing for the amount I was able.  Some months I would fall short of the amount on the lease agreement and others I would pay more than required in the lease.  Paying extra was never asked of me or written in the lease that I do so, however, I wanted to show Mr. Stearns that I was responsible and that I respected his generosity and understanding during the slow months.  I never asked Mr. Stearns to formally revise the lease making the payment lower during the winter months as I trusted that our verbal communication was sufficient.
  • In mid 2011 as the summer approached, it was obvious that there needed to be additional items purchased in order for the Red Rooster to operate in a manner that would meet the needs of the busy summer months.  It was at that point that I decided that it was time to look for additional capital needed to lease a point of sale system, replace the dishwasher, buy additional refrigeration, etc., etc. The cost of maintaining and running a restaurant is definitely not cheap.  I asked my dad as well as another family friend to consider investing capital needed to continue to grow the RR.  My father flew out from Nashville, TN where he lives to consider investing money to meet these needs.  He and I met with Mr. Stearns property manager, John Moist, and while acknowledging Mr. Stearns’ generosity during the slow months, my father asked Mr. Moist what Mr. Stearns’ intensions were regarding any underpayments made on the lease payments.  He advised Mr. Moist that he preferred not to invest if there were the possibility of the money quickly being lost.  Mr. Moist assured me and my father that he not need to have any concern in that regard, as Mr. Stearns had no intension of closing the business or demanding any repayment of the monies.  As a result, my father took a loan from his 401(K) and purchased items needed for the business to grow.  He as well as an additional silent investor provided the money for me to continue to attempt to make the Red Rooster a staple in Gig Harbor.
  • Throughout the months that followed and into 2012 I continued as always to openly communicate with Mr. Stearns and Mr. Moist regarding sales and continued to write checks for the lease each month.  Some months for less than the amount stated in the lease, and others for more than the amount stated in the lease.  The checks from July 2012 through October 2012 were all made for higher than the amount stated in the lease.
  • As usual, business declined beginning in about October, 2012.  I continued to pay Mr. Stearns what I could, and I worked hard to improve the “off season business.”  Mr. Moist’s recent posting where he said that he spoke with me in October and advised me that the Red Rooster was facing being closed, and that I asked that he give me through the end of the year to close the business, is simply untrue.  No such conversation ever occurred.  If that had been the case, I certainly would not have spent the time, money and energy I invested to decorate the Red Rooster building for the holidays, winning the Downtown Gig Harbor Historic Society Best Storefront Christmas Display.
  • Further, on Monday, December 17, 2012, the area was hit with what is referred to as a King Tide, something that has not happened in 30 years.  The entire restaurant flooded with six inches of water.  I called Mr. Moist and he came to the restaurant, acknowledging that this was a concern, but was not something that they ever expected to happen.  He stayed for about five minutes before he left.  Throughout the remainder of that day I attempted to contact Mr. Moist and Mr. Stearns about what to do, but received no response from either.  I did speak with two employees of Arabellas Landing who also came to the restaurant, and agreed that I would not be able to reopen without taking steps to fix the floors, repair and remove the molding, and essentially dry out each room.  The Arabellas Landing insurance agent, who is also my agent, advised me that this was not my responsibility, but was rather the responsibility of the owner.  He was concerned that the building would have long-term damage which could possibly include mold in the sheetrock as a result of the flooding.  However, I needed to reopen.

  • As a result, I was closed from Monday, December 17, through Friday, December 21, during which time I, and friends and employees, worked to repair the damage to allow us to reopen.  We rented equipment and supplies needed to dry out the premises and re-polish the floors.  I was forced to new food to replace food that was lost, and I had to pay staff to come in and help me put the restaurant back together, as well as re-prepping all of the newly purchased food.  Considering prior year’s sales, the replacement of food, the cost of supplies, and the at least 12 hours per day spent painting, cleaning, and preparing to reopen, it is estimated that I lost more than $5,000.00.  Only after my insurance agent communicated with Mr. Moist and advised him that this was NOT my responsibility, did I receive five hours of help from Arabella’s personal property contractor.  I would not have engaged in this huge effort and incurred these costs, nor would I have engaged in the decorating effort for Christmas,  if I had had any prior communications with Mr. Stearns or his representative regarding the termination of the Lease on January 1, 2013.
  • I was able to reopen on Saturday, December 22, and shortly after reopening I received a call from Mr. Moist asking “Are you up and running and open for business?”  I told him that the Red Rooster was open, but I expressed my concern that neither he nor Mr. Stearns had returned any of my calls or had been available to deal with the damage to the building.  His response was, “Well at least you’re back open for business.”  Mr. Stearns never called.
  • We remained open through Friday, December 28 (except for Christmas Day).  At 1:30 p.m. on December 28th I received a call from Mr. Moist requesting that I meet with him at 1:30 p.m.  At that time, he handed me a document declaring the Red Rooster Lease null and void effective 12:01 a.m. January 1, 2013, and essentially demanding that I turn over all of the assets of the business, including its name, menus, contracts, Facebook page and webpage under threat of damage to my credit and being forced to file bankruptcy if I refused.  A copy of this demand is attached.  You will note in the second paragraph of this attachment a reference to an alleged conversation between Mr. Moist and me asserting that I had “asked to be given until the end of the year before being closed down.”  As referenced above, no such conversation ever occurred.
  • In my conversation with Mr. Moist on December 28, 2012, he told me that a well known restaurant owner from the area would be reopening the Red Rooster, keeping the same name, keeping the same menu, and asked me to immediately sign the document.  As tears ran down my face, I asked him to confirm that he was saying that he had arranged for another person who was coming in to take over my business, and planned to keep everything the same.  He replied “Yes, that is correct.”  I asked Mr. Moist why I was being informed of this with only three days’ notice, and asked who the person was.  Mr. Moist responded that, “This has been in the works for weeks, but I [he] was told by the Stearns and their attorney that he was not allowed to tell me before that day.”  He continued to repeatedly ask me to sign the document presented by him, but I refused.  I have attached a copy of the actual document that was presented to me by Mr. Moist.  I have also included photos taken as we locked the building for the final time.  According to my records, Mr. Moist’s description of the lease payments and the alleged amount of underpayments” are inaccurate.
  • To be clear, prior to December 28, 2012, no demands or requests were made by or on behalf of Mr. Stearns for the repayment of any monies.  In fact, as of December 28, 2012, I had never received any invoices, written communications, or any written or oral statements regarding the alleged amount of money the Red Rooster owed Mr. Stearns.  Certainly, I was aware that the Red Rooster had not paid full rent, but until December 28, 2012, I was always advised by Mr. Stearns that he appreciated my effort, that he did not need the money, and to keep working hard to make the Red Rooster a success.  I did so.
  • Finally, with the permission of Mr. Stearn’s representative, we reentered the premises in January to remove items not purchased by Mr. Stearns and to clean the premises, a process completed at 6pm on January 4th.
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  • I will close by saying a very sincere thank you to each and every staff member who the Red Rooster employed over the last few years, all of my loyal customers of whom many have become friends, to my family and friends who contributed time and effort into being supportive of my efforts to build the RR, to my two sons who put up with their mom working very long hours and their willingness to spend time at the restaurant even when they may have preferred to be at home, and to Nick, Kathy, and my dad for believing in me and for your willingness to invest in me.