Taxpayers helped Nick LaVecchia open his downtown Gastonia restaurant three years ago with a $700,000 federal loan.
The city had the money at its disposal and lent it so Nick’s Steak and Taphouse could open in the redeveloped and long-rundown Webb Theater at 182 S. South St. But since then, LaVecchia has struggled to pay back the money on time.
A month ago, the restaurateur was $30,546 behind on his payments to the city, though he promised to absolve the entire debt and make his account current by the arrival of the new year. By Jan. 1, LaVecchia had paid off all but $6,246 of what he owed.
But he has since missed another rent payment and was behind by $14,019 as of Tuesday, said Gastonia City Manager Ed Munn. “He said he was going to get to zero (by Jan. 1). He didn’t get to zero,” Munn said. “Now he’s moving back the other way again.”
On Thursday, Munn said the city had just received another check for $10,000 from LaVecchia, though that still leaves him about $4,000 behind.
LaVecchia has not returned calls seeking comment since December. But Munn said he has communicated with him on several occasions, including within the last week. “It’s moving in the opposite direction of what we talked about,” he said. “But he says he will be current by Feb. 17.”
LaVecchia opened a second Nick’s Steak and Taphouse in Waxhaw last June, only to close it in October.
Rent to own: The city has owned the Webb Theater since 1995. In exchange for getting the $700,000 loan, LaVecchia also made a substantial personal investment into renovating the building into a modern restaurant. Gastonia’s offering came from three federal sources: a $492,800 U.S. Housing and Urban Development loan, $108,000 in stimulus money and a $99,200 grant.
The deal calls for LaVecchia to pay back the money he owes over 10 years, after which he will own the old theater. He began making payments when the restaurant opened in May 2011. His monthly lease payments amount to $6,875 per month, or $82,500 per year, and will total $825,000 by 2021. He also pays a 4-percent penalty each month on any past due balance.
The city will hold the title on the building until LaVecchia pays in full, but he is also paying $3,600 a year in lieu of property taxes. LaVecchia first slipped into the red in late 2012, when he got $26,000 behind in his rent to the city. In January 2013, he squared things up by writing the city a check for the full $26,000.
Holding out hope: Late last month, LaVecchia sent the city two checks for $20,000 and roughly $5,000. “We’re getting our money,” said Munn. “But we’re getting it late.”
Munn said he has yet to discuss alternatives for handling the situation with City Council members. He has suggested lowering the monthly payment and extending the term of the loan, but LaVecchia doesn’t want to do that. “He said he wants to stay on the more aggressive schedule where he pays the higher rent,” said Munn. “He felt he would be in a strong position this year and he’s optimistic about the future.”
Munn said the city doesn’t have any other tenants like LaVecchia, so this is a unique situation. But most landlords work with their tenants to maintain occupancy of a building, especially if they have faith in the tenant’s ability to get things ironed out, he said. “It’s a good restaurant,” he said. “As long as he’s moving in a favorable direction, I think we’re certainly willing to work with him.”
You can reach Michael Barrett at 704-869-1826 or twitter.com/GazetteMike.