NEWS

Mahogany's owner to start new businesses

Sharon Coolidge
scoolidge@enquirer.com

In the wake of city taxpayers forgiving nearly two-thirds of the loan they gave Mahogany's to open at The Banks, the restaurant's owner announced she was starting two new businesses.

Mahogany's Wing Champs is a food truck that will feature chicken dishes and Creamalicious is an ice-cream company that will feature flavors like Merlot and Peach Cobbler that were popular at the restaurants.

"I am grateful to the city of Cincinnati and the citizens of Cincinnati and the Tristate region for its support and look forward to providing delicious food for new customers," Liz Rogers said in a statement read to the media by her attorney, Robert Croskery, Wednesday morning. "Thanks to the efforts of (City Manager) Harry Black in structuring a sound deal that is in the best interest of Cincinnati, I am able to move forward with two new enterprises that I believe will benefit our region."

Six months after Mahogany's at The Banks closed, Black on Tuesday cut a deal to forgive most of the nearly $1 million taxpayers gave Rogers in 2012 to open at the Riverfront Development.

Details of the deal:

• Rogers will repay $100,000, which is to be paid in monthly installments of $800, of a $300,000 loan. Payments start Nov. 1. Rogers previously paid $16,131. That means the city is forgiving about $183,869, based on a February update provided by the city.

• Rogers will relinquish the furniture from the restaurant, which the city already sold for $15,000.

• Rogers will relinquish her mortgage on property in Hamilton where her first restaurant was located and her life insurance policy. The former could be worth $75,000, though that is speculative, according to the city. The latter is worth nothing because Rogers let the policy lapse, according to the city.

"This represents the most realistic means for the city to recoup monies owed," Black wrote Tuesday in a memo to City Council.

Black made the decision without a vote from Cincinnati City Council, giving council members political cover. A previous council made the deal with Rogers. Current Council members Chris Seelbach and Christopher Smitherman voted against the deal in 2012, and members Kevin Flynn, David Mann and Amy Murray had not yet been elected.

The deal ignores the $684,000 grant taxpayers gave Rogers. If she fell behind on loan payments she was to have repaid the grant too. Croskery said Rogers put all that money into what she promised she would – the actual restaurant.

Croskery said had the city not cut a deal – which came after "spirited discussion" – Rogers would have sued the city.

READ MORE:Mahogany's coverage from The Enquirer

In 2012, the city – in an effort to lure a minority-owned business to The Banks – lent Rogers $300,000 and gave her a $684,000 grant.

Rogers put her Hamilton restaurant up as collateral and personally guaranteed the loan, which was to be paid back over 10 years.

The soul food restaurant opened to great fanfare in October 2012 but quickly floundered. Rogers previously told The Enquirer the city didn't live up to its promise to put a hotel, a business and more residents in the development.

Her first missed payment came in August 2013.

Rogers' landlord at The Banks, NIC Riverfront One, shuttered Mahogany's in September.

In January, the Holy Grail, which was Mahogany's neighbor at The Banks, announced it would expand into that space with an Italian concept. SantoGraal, a 3,250-square-foot restaurant, will offer fresh, traditional Italian fare.

Last fall, in the midst of problems, City Council members directed Black to pursue a settlement with Rogers. Black met with Rogers and sent a follow-up memo to council requesting feedback.

There was none, according to city officials. So Black pursued the restructured financial agreement as an administrative matter.

Council Member Flynn had called for the city to declare Rogers in default on her loan and grant, but his fellow council members declined.

Council Member Smitherman, who voted against the loan and has long been a critic of it, said it's "painful that $984,000 is out the window."

Council Member Mann called it "a sad chapter that unfortunately took a long time to close."