Banks tenant Mahogany's falls behind on sales taxes, workers' comp premiums, city loan payments

State secured two judgments for $22K in December

CINCINNATI - The state of Ohio has secured judgment liens against Mahogany’s at the Banks for unpaid sales taxes and workers compensation premiums totaling $22,095.

The restaurant is also behind on its loan payments to the city of Cincinnati, said William Fischer, an economic development division manager for the city.

The judgments, filed in December in Hamilton County Common Pleas Court, are the first to surface against the soul food restaurant since it received $984,000 in startup financing from the city of Cincinnati in 2012. The combined grant and loan package was controversial because of unpaid bills from other businesses operated by Mahogany’s co-owner and Executive Chef Elizabeth Rogers.

Mahogany’s manager Raymond King declined to comment on the liens Tuesday, but said business has been good for the restaurant, which held its grand opening in October, 2012.

King referred WCPO to Rogers and her accountant. Neither returned repeated calls seeking comment. But Rogers told WLW-AM 700 talk show host Bill Cunningham Thursday that the restaurant "secured a payment plan" with state officials because business was slow.

"Actually we did pay the sales tax," she said. "They were just filed late. We were assessed for that. We paid a late fee. Is it something that needs to be on the news? No. Am I the first company that ever filed something late? Am I the first company that has ever paid something late? No. I mean, some people don’t even pay sales tax."

The Ohio Department of Taxation has not responded to WCPO inquiries about Mahogany's sales tax judgment.

City spokeswoman Meg Olberding said Mahogany's missed its November and December payments and made a partial payment in January. The city expects another partial payment in February, she added.

"Unfortunately this has been a difficult winter season for the restaurant and their sales have been lower than projected," Olberding said. Mahogany's "will continue to work with us to get current on their loan obligation."

Located at 180 E. Freedom Way, Mahogany’s touts a dining experience that gives customers “a taste of the deep south.” Menu items include family recipes for fried chicken and waffles and deep dish Southern-style peach cobbler.

City council approved by a 6-3 vote a $684,000 grant and $300,000 loan for the restaurant in February 2012. The grant covered design and construction costs of the restaurant’s interior. The loan was for restaurant equipment and $115,000 in working capital.The 10-year loan was personally guaranteed by Rogers and carries an interest rate of 1 percent above prime, city records show.

Loan documents require Mahogany’s to promptly notify the city of any litigation “that could reasonably be expected to interfere substantially with normal operations” or “adversely affect its financial condition.” Olberding said the city wasn't aware of the state judgments before today, but added that Mahogany's is working on a payment plan for those bills.

A spokeswoman for the Ohio Bureau of Workers' Compensation said Mahogany's made two partial payments last month toward the $12,424 judgment secured by the state in December. The lien amount represents past-due premiums and collection fees for coverage provided by the bureau from August 2012 to June 2013. The unpaid bills were turned over to the Ohio Attorney General for collection in November, said BWC spokeswoman Melissa Vince.

"Payments are due at the end of this month for the last six months of 2013," Vince added. "Hopefully, the balance they owe will be paid" with their second-half premium.

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