• Legal troubles shrink Detroit restaurateur’s empire

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    Fish Market

    Two downtown hotspots — the Detroit Fish Market and Detroit’s Breakfast House & Grill — will close today, following a lawsuit alleging their owner tried to “defraud” the city and owes $180,000 in back rent.

    Restaurateur Frank Taylor announced the closures Monday, after the Downtown Development Authority filed suit Friday and moved to evict the Detroit Fish Market. The agency, which owns the building, charged rent based on his profits and accused him of “manipulation” by transferring money from the restaurant to other ventures, including his now-bankrupt Seldom Blues.

    The Fish Market was open Monday, and a manager told The Detroit News about 4:30 p.m. that he had heard nothing of the closing. The Breakfast House filed for bankruptcy last year.

    “It’s disappointing,” said Nick Salowich, an architect who works at the nearby Hamilton Anderson Associates. “It’s great to have a restaurant full and people walking around.”

    The closures are a blow to the Detroit restaurant scene and follow a string of failures for Taylor, a Houston native married to WXYZ-Channel 7 anchor Carolyn Clifford.

    His Southern Hospitality Restaurant Group once owned or managed some of the city’s chicest restaurants. In the past few years, several have closed, including Seldom Blues, The Woodward, Sweet Georgia Brown in Greektown and Magnolia Restaurant & Bar near the Detroit River. His last Metro Detroit location, Cloud 9 Restaurant & Ultra Lounge, is still open in the Fisher Building, according to Michael Layne, a spokesman for Taylor.

    The Fish Market closure also could hurt Detroit’s efforts to boost the Paradise Valley District. The restaurant, which opened in 2008, was the most visible anchor of the district that the city has spent $10 million on, trying to turn it into an entertainment district.

    Layne denied the fraud allegations and faulted the DDA for not developing the area or cooperating with him.

    “While the Detroit Fish Market was a success and well-received, the DDA ultimately failed both Taylor and the city of Detroit,” according to the release from Layne.

    The DDA loaned the Southern Hospitality Restaurant Group $600,000 to open Seldom Blues, in the Renaissance Center, and the Breakfast House & Grill along Woodward Avenue. Both opened in 2004.

    The DDA also gave Taylor a $600,000 allowance to renovate the building that housed the Fish Market.

    Last summer, the DDA let Seldom Blues, the Breakfast House and a number of other businesses pay only the interest on their loans for 18 months. At that time, the two eateries owed a combined $484,000.

    The DDA did not return calls for comment Monday.

    The DDA filed suit after its auditors were denied access to some of the Fish Market’s financial records last month during an audit, according to the Wayne County Circuit suit. A judge on Friday issued a temporary restraining order against the restaurant removing or damaging the improvements and halted the business from transferring funds to a third party. Another hearing is scheduled for May 10.

    “Defendant Taylor has manipulated the assets of the Defendant Detroit Fish Market for his own personal benefit,” according to the lawsuit. “Defendant Taylor’s manipulation (of) the assets of the Defendant Detroit Fish Market was … done with the specific intent to defraud … creditors, including the DDA.”

    The DDA alleges that a balance sheet showed the Detroit Fish Market transferred $302,314.90 to several other entities, including Seldom Blues and Cloud 9.

    The lawsuit also alleges Detroit Fish Market profits were transferred to establish a new restaurant in Houston and cash went to pay some of Seldom Blues bills’ from January 2009 through October 2009.

    Seldom Blues filed for bankruptcy in September 2009, and the Detroit Fish Market wasn’t included as a creditor, according to the lawsuit.

    Auditors concluded the Detroit Fish Market’s gross sales in 2009 were just over $3.1 million, although they noted they didn’t have access to all the business’s financial records.

    Kent Anderson, of the nearby Hamilton Anderson Associates, said he was disappointed to hear of the closures but said he’s still positive that Detroit can support similar restaurants downtown.

    “This is a setback but it’s not a major setback,” said Anderson, whose firm has been on Randolph since 1993. “There will be other restaurants.”

    Jason Huvaere, the executive director of Detroit Restaurant Week, an effort to promote downtown eateries, said Detroiters need to remember to patronize downtown eateries or risk losing them. “There aren’t dozens and dozens,” Huvaere said. “They are rare.”

    According to a release from Taylor, the businessman said he did his best to make the two restaurants work.

    “Taylor deeply regrets the necessity to cease operations at his restaurants,” according to a statement from Layne. “He is saddened by the job losses that will result. The closures were clearly not for a lack of trying. Since his first restaurant opening until today, Mr. Taylor has worked seven days a week, from early morning until late at night to make his restaurants successful.”

     

    Source:The Detroit News/ Christine MacDonald

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