Thursday, February 10, 2011

SIGN OF THE TIMES

Mendocino Grille and Wine Bar Closed Over Unpaid Taxes

The M Street restaurant and wine bar is closed until further notice.

By Shaun Courtney


Georgetown's Mendocino Grille and Wine Bar is closed until further notice. The Office of Tax and Revenue (OTR) revoked the sales tax certificate for Mendocino for the second time on Feb. 4. for failure to pay some $80,000 in sales taxes. OTR also seized the business liquor license. The seizure effectively shuts down operations as they are unable to make any sales without a license.

The M Street institution has served California-style cuisine and a wide selection of West Coat wines to Georgetown regulars and visitors alike since reopening under new ownership in 2003. Mendocino began as a collaboration between restaurateurs Eli Hengst and Jared Rager, who owned the restaurant from 2003-2008.

Rager and Hengst are well-known throughout DC for other area projects including Sonoma, a wine bar on Capitol Hill, Blue Ridge in Glover Park, and Redwood in Bethesda.

In 2009, Troy Bock, Mendocino's long-time manager, took over as owner through his company West Coast Concepts. Rager and Hengst remained involved only as guarantors of the lease, which Bock and his company assumed.

In October 2009, OTR entered into a payment agreement with Bock, following the seizure of the business for non-payment of sales and use taxes.

William Bowie, the legal counsel for OTR, said seizing the sales tax certificate and liquor license is "a last step, when all other steps have failed." When asked how often such actions are taken, Bowie said, "it is happening more lately than it probably has in the past. Based on what owners are saying, it's because of the economy."

In an email, Hengst wrote, "Naturally, it is in our interest to see things resolved, but Mr. Bock and his company are responsible for the liabilities incurred during his ownership and management."

The liquor license is a coveted asset in Georgetown, thanks to the moratorium. OTR has also levied the liquor assets in the restaurant and could eventually auction off liquor as well as the liquor license, depending on the resolution of the $80,000 in taxes owed. Bowie said they are not sure of the value of the liquid holdings, but that they will likely evaluate them in the near future.

Bowie said "at this point, my guess is the only way we would allow them to reopen" is if the full sum owed is repaid. Bowie added that OTR "could and probably will at some point file liens againt [Bock] personally."

"We hope Mr. Bock/West Coast Concepts, LLC can reach a quick resolution with the DCOTR and that the restaurant reopens soon. Though we have no reliable estimate of the timeframe, we hope it is within one to two weeks at most," wrote Hengst.

Bock is now reportedly working as a sommelier at BLT Steak, according to industry sources who asked not to be named due to sensitive industry relationships. Calls to BLT's media representatives were not immediately returned.

Steven O'Brien, attorney for the owner, was unwilling to comment at this time.

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