By Alan Prendergast
By Michael Roberts
By Michael Roberts
By Amber Taufen
By Patricia Calhoun
By William Breathes
By Michael Roberts
By Melanie Asmar
She was wrong. On August 31 Excise and Licenses revoked La Bonita's cabaret license permanently. While the restaurant's liquor license can be transferred to any new owners, they'd have to reapply for a cabaret license. "The new owners will have to have a public hearing, and the neighborhood will have to be notified so that they can come and voice their opinions on it," says McCann. "It's hard to say whether the neighborhood will let them."
"Anyone would be crazy to buy this place without knowing for sure that they would get the cabaret license," Nunez says. "They would probably lose their houses, too. And their business."
The majority of MOED's loans are made to retail and manufacturing establishments, says Lysaught, which could account for a default rate that he pegs at only 7.5 percent. Of course, MOED's usually lenient--and often criticized--repayment terms also contribute to that low figure. "I'm happy to say that we get most of it back," Lysaught says of the MOED money. "I think if our loan loss were any lower, then we wouldn't be taking the kinds of risks we have committed ourselves to taking with this program."
Restaurants, however, are notoriously risky businesses and so account for only 8 percent of MOED's loans over the past twenty years. "We look at restaurants as specifically good for improving the economic well-being of a neighborhood," Lysaught says. Tosh's Hacienda in Five Points, for example, received the largest restaurant loan ever awarded by MOED, $470,000, and Lysaught says the money was put to excellent use. "That has really been a pivotal point in that neighborhood," he adds. "Imperial, down on Broadway, is another one that we loaned to and have felt that not only were we repaid the money, we were repaid in the unbelievable improvement to the area around it, in large part because of the restaurant. And that's what we thought would happen with La Bonita, too."
But had MOED thought about it very hard, neighbors suggest, the agency might have realized that Nunez was shouldering an unrealistically heavy burden--and debt load.
From the start, Nunez had trouble making her MOED payments. She contacted Jim Martinez, an assistant to Mayor Wellington Webb. "I recommended to Lupe that she get a business manager and a lawyer to help her work this out," Martinez says.
After reviewing Nunez's business plan, Martinez says, he agreed with MOED's initial assessment that it was workable. "Lupe had a pool-hall-type recreational area in the plans, and they were going to make their money by catching on to the craze of playing pool and having a beer. So with pool tables, the restaurant, and a beer-garden/patio-type thing in the plans, it looked like they had thought of ways to fill the space," he explains. "They were going to be like Wynkoop, you know, and if you look at that place, you can see where you need a lot of room to play pool. So that building seemed to be perfect."
So did the location. "We're talking about a highly Hispanic part of town," Martinez adds. "They thought people would know her and would want to support her."
But knowing people could have been the problem. Councilman Gallagher says Nunez may have relied too heavily on her contacts with the city, including her brother, Phil Marin, and the business manager and lawyer whom Martinez advised her to hire: brothers Stephan and Andrew Andrade--who happen to be related by marriage to Martinez's wife. Martinez confirms that he recommended the Andrades, who are indeed related to his wife, but, he says, "If my recommending people who happen to be twice-removed third cousins of my wife to do pro bono work for an eighty-year-old woman who's about to go to debtor's prison is wrong, then so be it." Still, Gallagher accuses Martinez of using his pull at the mayor's office to keep La Bonita open. "I think it's a shame that Lupe thought her friendship with Martinez meant that she could get away with these things," Gallagher adds. "She thought that he would protect her and that she had an in. I think the neighborhood tried hard to be fair about this."
But Martinez claims that Nunez was having problems long before he met her and that Gallagher didn't do anything to try to help the situation. "If they want to play racial politics, that's up to them," Martinez says. "I sided with Lupe, number one, because she was in over her head and she needed someone, and number two, because I have to protect the city's investment. I could never find a day or time or place where Gallagher's office came in and said, 'How can we help?' My bottom line is making the situation work, and I don't know how it turned into a Gallagher-versus-Martinez thing."
As the predicament worsened, however, Martinez says it finally came down to leveling with Nunez. "I said, 'Hey, this is real. You are really going to lose this if you don't fix these noise problems,'" Martinez says. "I think the city did what could be expected of us to help Lupe out, but the truth is that she never had two feet on the ground from the start." Ultimately, he says, Nunez "took on too much, and she knew it. She kept at it because she didn't want to let the city down."