CINCINNATI -- Mahogany's at the Banks is not closing and the restaurant will not be evicted, owner Liz Rogers told WCPO on Tuesday, saying she is making payments as demanded by the landlord.
Rogers paid $26,425 in back rent this week, and she plans to pay the remaining portion -- $37,727 -- by March 10.
"No, we're not closing, we're not going to be evicted," Rogers said. "Just like with everyone else, we've worked things out with our landlords and we feel very positive about it."
Sending Rogers a fourth notice of default last week, the manager of The Banks, NIC Riverbank One, threatened to evict Mahogany's and gave Rogers two weeks to pay past due rent plus March rent and fees.
Rogers blamed an $80,000 embezzlement by a financial manager and the harsh winter for the restaurant's troubles.
She told WCPO that business the past four months has been cut 60 percent by bad weather. She said the restaurant took in $1 million in its first year.
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."
Rogers said she reported the embezzlement to police but she didn't talk about it publicly because it was a personal matter. She would not name the person she accused.
"It's not anybody’s business unless they were going to give me $80,000," Rogers said.
"I dont blame it on one particular thing," she added. "When you're a new business, you cant afford to lose that kind of money. I just cant focus on that, I have to focus on staying in business, moving our company forward regardless of whatever obstacles we may have and this was an unfortunate situation."
In a letter to Rogers Friday, NIC said it would retake possession of the premises by noon on March 11 if Rogers wasn't current on her payments.
“The terms of this extension as set forth in this letter are not negotiable,” NIC wrote in the letter.
Additionally, NIC told Mahogany's owners the site must be maintained in a safe manner.
"Recently, Mahogany's failed to clean its hood system, resulting in an unsafe situation," NIC's letter stated. "Mahogany's was asked many times to address its hood system and failed to do so until the situation became dire. Hood maintenance is very important in the food service industry as hood grease is a leading cause of fire."
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."
RELATED: Read the letter below or click here .
City officials were given a range of options last week from their attorney for recouping Cincinnati's nearly $1 million investment in Mahogany's. The options ranged from helping Rogers pay her past due rent and letting her continue operating, to finding another tenant for the site.
In NIC's letter, the landlord 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.
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."
The letter stipulated that Mahogany's must make its March 3 and March 10 payments with certified funds or via bank wire transfer.
Mahogany's has been in continual default of the lease since last September, NIC said.
According to the letter, NIC rejected Rogers' request to cure the default over the next two months. She asked to be allowed to pay $26,422.25 on March 2, $26,728.23 on April 2 and $13,211.13 on May 2.
Last week, WCPO obtained a copy of a confidential city solicitor's memo that outlined the city's options with Mahogany's. The Feb. 27 document, written by City Solicitor Terrance Nestor, was given to the mayor and city council.
“The city can take a number of actions under its agreements, including curing defaults,” Nestor wrote.
“In all events, the city can hold Mahogany’s liable
for all costs and damages suffered by the city as a result of its default under the funding agreements,” the memo added.
Rogers said she didn't want any further financial assistance from the city.
"We're not interested in that," Rogers said Friday. "We're working to get it up-to-date ourselves. We appreciate the help we've been given so far."
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 is $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.
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.
The grant was given 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.
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.
As collateral for the loan and grant, the city has a personal guaranty from Liz 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.