FOX19 Investigates: Mahogany's makes lease payment
CINCINNATI, OH (FOX19) -
The owner of Mahogany's at the Banks made a $26,425 payment on its lease on Monday, FOX19 has learned.
FOX19 spoke with Mahagony's owner Liz Rogers Tuesday afternoon at the restaurant. Rogers said Mahogany's is open and will remain open. Rogers told FOX19 she will meet all requirements of the financial agreement.
"We're not closing. (We're) nowhere near closing and it's not going to happen," Rogers said. "We're here (for) the long haul."
According to the agreement with NCI Riverbanks, Rogers must pay the remaining balance of $37,730.32 by 5 p.m. March 10.
If the payment is not made, Mahogany's must vacate by noon March 11.
According to an agreement:
*On Feb. 20, Mahogany's was served with a fourth notice of default letter and provided 10 days to cure the default and bring its account up to date.
*On Feb. 26, Banks landlord NIC Riverbank One LLC received a communication from Mahogany's attorney that it would not be able to cure the default within the required time period. The restaurant requested that it be permitted to pay $26,422.25 by March 2 and pay the remaining balance with a payment of $26,728.23 on April 2 and a final payment of $13,211.13 on May 2.
*NIC rejected that offer.
However, NIC said it is willing to provide an additional eight days in order to cure the default under these terms:
*Mahogany's must pay $26,422.25 on or before March 3
*Mahogany's must pay the remaining current balance of $37,730.32 (includes March rent and other accrued fees and costs) on or before 5 p.m. March 10.
"NIC hopes that this extension will permit Mahogany's to accumulate the funds and cure the default," the agreement said. "We are communicating this offer and extension to both you and the city of Cincinnati which will have a corresponding right to make good your shortfall until March 10, 2014 provided you make the March 3, 2014 payment in full and comply with the rest of the terms and conditions in this letter. The city, however, should it wish to cure the default, may pay with a check."
The agreement also stipulated all payments must be made with certified funds or via bank wire transfer.
NIC Riverbanks had sent a letter by courier on Feb. 28 to Liz Rogers, the city solicitor and the City of Cincinnati Economic Development rejecting Roger's initial payment schedule.
The Feb. 28 letter outlines NIC Riverbanks' concerns that Mahogany's would adhere to financial agreements. The letter said in October 2013, Mahogany's wrote a bad check when NCI Riverbanks took over the property from the previous owner.
According to that letter, Rogers then told the landlord during a meeting in November 2013 that the reason she fell behind was because a Mahogany's financial manager embezzled $80,000. She told NCI Riverbanks representatives she was pursuing that person with the help of police and the prosecutor's office. FOX19 contacted obtained a report from Cincinnati Police, filed in January 2013, that alleged an employee misappropriated $19,000 from July through October 2012.
"That's public record and I'm not at liberty to speak about that but that's not stopping us from moving forward," Rogers said.
After the November 2013 meeting, NCI Riverbanks agreed to allow Mahogany's to catch up on the past due amount by making weekly payments. The letter goes on to say that agreement lasted three weeks. The letter states Mahogany's wrote a second bad check to NCI Riverbanks on Dec. 9, 2013. As of Feb. 28, NCI Riverbanks said Mahagony's had not made good on that check. The letter also states NCI Riverbanks learned of a third bad check written to the previous owner in September 2013.
Tax, city loan problems
Last month, it was revealed that Mahogany's is also behind in its taxes. The state of Ohio in December secured a judgment against Mahogany's At The Banks LLC for $9,671.48 for sales tax and one for $12,424.04 for workers compensation, according to court documents.
In March 2012, Cincinnati City Council approved $1 million in loans and grants to Mahogany's, asserting the Southern-style restaurant would bring a unique, local offering to The Banks.
The $1 million is made up of a $300,000 loan and $684,000 in grant money.
As of last month, Rogers was also three months behind in her payment of the $300,000 loan from the city. Her last full payment was in October, according to the city. The restaurant made a partial payment in January and the city expects to receive another partial one this month, according to city spokeswoman Meg Olberding.
"It's been one of the worst winters in the country," Rogers said. "I mean we've all took a really bad hit due to the weather."
Rogers is upbeat about her restaurant's future.
"We're positive that we're going to make excellent strides," she said. "Opening Day is coming up so we're pretty excited about that."