CINCINNATI – Mahogany's on the Banks met its Friday deadline for curing its default with its landlord and thus avoided eviction, the landlord's attorney and the city confirmed.
The troubled restaurant would have been ordered to surrender the premises Saturday if owner Liz Rogers had not come current on her rent, according to her amended agreement with the landlord, NIC Riverbank One.
Brian O'Connell of Strauss Troy said he could not confirm the amount of the payment or terms going forward. NIC said it did not make public terms or conditions of its clients' leases.
A call to Rogers' spokesperson was not immediately returned.
Rogers had agreed to pay off her default - $40,326.67 - along with her April rent and other charges (minus her April 1 payment of $25,000) by noon Friday.
Rogers had been months behind on her rent and under the gun since NIC threatened to evict her in a letter on Feb. 28.
At the time, Mahogany's was also behind on sales tax payments and workers compensation premiums to the state and delinquent in loan payments to the city.
Mahogany's is still not current with the city, city spokesperson Meg Olberding said Friday.
"We're still talking and working with her. Obviously, we wanted to give her a chance to work on her lease first," Olberding said.
The city’s loan was part of a controversial financing package to help the restaurant open at The Banks in 2012. The package consisted of a $300,000 loan and a $684,000 grant.
If Rogers hadn't met her Friday deadline, the amended agreement with NIC would have required her to:
> Voluntarily leave the premises and turn over control to NIC by noon Saturday.
> Pay an eviction fee of $25,000, plus a holdover fee of $500 per day for every day Mahogany's didn't vacate.
> Pay "all reasonable costs and fees, including reasonable attorney's fees, incurred by NIC in reclaiming the premises."
Rogers made at least two other payments to NIC and also received at least two deadline extensions since Feb. 28. Her last payment was $25,000 on April 1, according to an email from NIC's attorney to the city.
"As you know, the next deadline … is April 11, 2014. We will be sure to keep you apprised of any developments," O'Connell wrote.
In their last public statements , Rogers vowed to cure the default and NIC said it would work with her to resolve the situation.
Rogers blamed an $80,000 embezzlement by a financial manager and the harsh winter for the restaurant's troubles.
Last month, NIC said that it and Mahogany's "continue to work together in order to make a mutually agreeable arrangement whereby Mahogany's can cure the event of default and remain in the Premises."
But in a Feb. 28 letter to Rogers , NIC expressed skepticism.
"NIC understands that Mahogany's believes it can turn things around and that things will get better once the weather improves and baseball season begins," NIC wrote.
"However, Mahogany's payment delinquencies go back to September of 2013, when the weather was fine and the Cincinnati Reds were playing baseball at Great American Ball Park and in the hunt for the post-season."
NIC said Mahogany's "has a poor track record in complying with agreements."
NIC claimed that Rogers has issued three bad checks to NIC and the original developer, Carter Dawson, since last fall, when NIC bought the property. Mahogany's had not made good on those bad checks, NIC said in February.
After Rogers told NIC about the embezzlement last November, NIC said it agreed to allow Mahogany's to make weekly payments to catch up on past due amounts.
"That arrangement lasted three weeks," NIC said in the letter. "In less than a month after entering into an agreement with NIC to catch up on past due amounts, Mahogany's wrote NIC a second bad check."
Rogers told WCPO she didn't blame the embezzlement alone for putting Mahogany's behind on its payments.
"I don't blame it on one particular thing," Rogers said. "When you're a new business, you can't afford to lose that kind of money. I just can't focus on that, I have to focus on staying in business, moving our company forward regardless of whatever obstacles we may have. This was an unfortunate situation."
Rogers said her business has had some growing pains.
"We're only a year-and-a-half old, so we're not going to do everything right," Rogers said. "We try, but we're not going to do everything right and with any small business you have peaks and valleys, and the most important thing to do is to learn from it."
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On Feb. 27, City Solicitor Terrance Nestor gave city officials a range of options for recouping their investment, from helping Rogers pay her past due rent and letting her continue operating, to finding another tenant for the site.
Rogers said she didn't want any
further financial assistance from the city.
"We're not interested in that," Rogers said. "We're working to get it up-to-date ourselves. We appreciate the help we've been given so far."
However, Rogers' financial problems don't end with NIC.
READ MORE: Mahogany's owner says she is being singled out
The state of Ohio secured judgment liens in December against Mahogany’s. The judgments indicated the restaurant was more than $22,000 behind on sales tax payments and workers compensation premiums.
Additionally, Mahogany’s was $14,611 delinquent in loan payments to the city of Cincinnati. The amount increased to $17,684 on March 1.
Rogers said she is being unfairly singled out by some politicians and the media.
Other restaurants in The Banks district also are struggling, Rogers said. Those eateries have more resources to fall back on because they are corporate-owned, while she is a small business owner.
"This is the worst winter in 35 years and business is off," Rogers said. "I'm just trying to do business. I'm a small business owner and business owners have debt. There are some unrealistic expectations."
She added, "There are other restaurants down here that are bigger and having rent trouble, but you don't hear about them. I do feel singled out. I have tried to make payment arrangements with my creditors."
WCPO hasn't found any current legal proceedings against other Banks restaurants, but there have been in the past.
READ MORE: Q&A with Banks developer
In February 2013, Toby Keith’s I Love This Bar & Grill was sued for not paying its rent. At the time, the suit alleged Toby Keith’s hadn't paid rent since November 2012. The matter was settled in a private agreement in August 2013.
Carter Dawson got a $5.5 million loan from Cincinnati and Hamilton County several years ago to help pay for customizing some tenant spaces. The loan was never in default.
The owner of another eatery, Johnny Rockets, has said there's little business in The Banks district unless an event is being held at a nearby stadium or arena.
Critics questioned whether the city of Cincinnati should approve taxpayer subsidies while Rogers owed back taxes from a restaurant in Hamilton. That location has since closed.
The city gave Mahogany's a grant to pay for furniture, fixtures and equipment, as well as create a $115,000 working capital fund.
The loan has a 10-year term, payable monthly, with interest fixed at 4.25 percent.
As collateral for the loan and grant, the city has a personal guaranty from Rogers and her husband, Trent.
Other collateral includes a leasehold mortgage on The Banks site; a security interest in the furniture and equipment there; and a second mortgage and security interest in the Hamilton restaurant. Further, the city is named as a beneficiary under the restaurant owners’ life insurance policies, up to the balance of the loan.
Mahogany's Amendment March 10 (PDF) Mahogany's Amendment March 10 (Text)