ROSEVILLE, CA - Thecity-sponsored development corporation that loaned $1.51 million to build out a Sammy Hagar-themed bar and restaurant on Vernon Street saysdespite a missed loan payment,theclosure of the business last week came as a surprise.
The Roseville Community Development Corporation (RCDC) said it learned about the Nov. 10 shutdown of Sammy's Rockin' Island Bar and Grill through media reports.
"It seemed to be going great. On the surface, that's all we can go by," said Howard Rudd, RCDC board chairman.
Six months beforepartners Steve Pease and Jon Yip made their first payment to the RCDC for Sammy's Rockin' Island Bar and Grill downtown, they formed a second partnership, Innova Galleria, LP, to open another Hagar-themed restaurant two miles away at the Westfield Galleria at Roseville.
The source of funding for the Galleria buildout is unknown.
Under the RCDC loan agreement, the partners were offered an 18-month grace period before the first payment was due on the Vernon Street location, allowing them a full year of operation before their first installment.
The RCDC says the partners made their first payment of $9,165 in September as promised, but then came up short in October.
The partnership, Innova Vernon, LP, missed the second payment, due Oct. 22, three days before partner Steve Pease disappeared under mysterious circumstances.
Pease remains missing with the last confirmed sighting in Fort Bragg a week before the restaurant closed.
Although the Galleria restaurant was due to open in mid-December, work on the buildout stopped about the same time as the downtown restaurant closed, according to a Westfield employee. The employee said the buildout was only about halfway complete.
At the downtown location, Rudd says Pease's long-standing reputation in the business community along with the Sammy Hagar name helped the partners secure the loan with the RCDC, which is eager to re-energize Vernon Street.
"I think all five (board members) plus the city staff that collected all the data felt pretty solid that it was a good plan and going to be successful," Rudd said.
Rudd pointed out that the loan was made in 19 progress payments during the seven-month buildout and not in a single cash grant and that the building and tenant improvements are protected by liens.
Property records show the $1.51 millionloan in Feb. 2012 to build out the restaurantfollowed a $650,000 loan in 2008 from the city's now-defunct redevelopment agencyfor Pease to buy the building, a former JC Penney store.
A Roseville city official said it's unclear whether the original loan is also in default because of thecomplicated structure of so-called "successor agencies" that were created following the dissolution of redevelopment agencies in California.
Although the RCDC has formally declared the partnership in default on the $1.51 million loan, Rudd said he's still hopeful the default can be cured and the restaurant reopened.
Hesaid staff is also considering the eventual possibility of foreclosing on the loan and seeking a new restaurant operator.
Multiple attempts to contact JonYip were unsuccessful.
A spokesman for Westfield said Pease and Yip still hold the lease on the restaurant space at the Galleria, and he provided a statement from Galleria general manager Eddie Ollman:
We have not been officially notified of any change in status or opening date for the Sammy's Beach Bar & Grill restaurant planned in the Westfield Galleria at Roseville. We remain confident that either Sammy's, or another restaurant our customers will enjoy, will be joining us in that location sometime in the coming months.
by George Warren,GWarren@news10.net