The centerpiece of Neil and Eric Bauman's ambitious project to redevelop much of the village of Webster's Main Street as an upscale commercial strip is asking for court protection from creditors.
A Chapter 11 bankruptcy petition filed this week by Prime Steak House LLC follows an ongoing Chapter 11 case filed by the father-and-son team's eBaum Webster Ventures LLC development company in April. The restaurant's website touts that "Prime has established itself as the premier steakhouse in Rochester."
Webster Ventures was founded in 2007 by the Baumans and partially financed with proceeds from the $17.5 million sale of the eBaum's World comedy-video website, which Eric started as a high school student.
The Bauman family also owns other local properties, including a building in the heart of Rochester's downtown at Main Street and Clinton Avenue that once housed Neil Bauman's father's jewelry store and currently houses a lunch counter opened by the Baumans called Food.
The Webster restaurant's 40 E. Main St. address sits in a block of commercial and retail properties the Baumans have been redeveloping under Webster Ventures for the past five years. Their plan is to turn the village's Main Street strip into a shopping, restaurant and entertainment destination similar to Pittsford's Schoen Place, Neil Bauman told the Rochester Business Journal in 2007.
The steakhouse's bankruptcy petition lists a single debt, $40,000 in sales taxes owed to the state Department of Taxation of Finance. The incomplete filing does not state assets or other liabilities or name other creditors.
The Chapter 11 filing was needed to prevent a shutdown of the restaurant for unpaid taxes by the state, but the tax debt would be settled soon, Neil Bauman said this week.
Court records filed with the Monroe County clerk's office list state tax warrants against Prime Steak House LLC totaling some $51,000. Also listed are actions filed against it in state Supreme Court in Monroe County by Jacobstein Food Service LLC on June 15 and by Palmer Fish Co. Inc. on June 26.
Bauman acknowledged the Palmer and Jacobstein actions but he said they have been settled. A sale of the restaurant to an unnamed party who would continue to lease the building from eBaum Ventures is in the works, he said. The eBaum Ventures Chapter 11 workout, meanwhile, is continuing apace and would be resolved in a matter of months, Bauman predicted.
In April, Bauman described the Webster development's Chapter 11 filing as needed to stave off an uncooperative lender's demands for repayment of a construction loan. The development's bankruptcy petition lists Genesee Regional Bank as a $3.25 million secured creditor. Court records show that prior to the Chapter 11 filing, the bank had started foreclosure proceedings against Webster Ventures.
Like many businesses, the Webster project suffered in the 2008 financial crisis, Bauman said in April. But the restaurant was doing well and new tenants, including an Off Track Betting Corp. location and a sandwich shop and sports bar, had brought the development closer to an occupancy rate that would keep the project afloat, he said.
The Main Street project's occupancy stands at the same 70 percent level as it did in April, but he expects several new tenants to ink leases soon, Bauman said this week. An occupancy rate of 88 percent would be needed to put eBaum Webster Ventures on sound footing, he said in April.
A monthly operating statement filed June 27 in the Webster Ventures bankruptcy shows the project to have booked a $6,749 net loss on an accrual basis in June and states negative cash flow of $2,441 in that month. The statement projects the development will achieve positive cash flow in January. The development is on track to meet that goal, Bauman said.
7/13/12 (c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email firstname.lastname@example.org.