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Evanston aldermen Monday will be asked to accept a more than 70 percent loss on the city’s $200,000 loan to the failed Chicken & Waffles restaurant on Dempster Street.

The owners of the restaurant at 2424 Dempster St. that closed a year ago have negotiated a deal to sell the building to another restaurateur.

But the $540,000 selling price will only cover in full paying off of the nearly $187,000 outstanding balance on a first mortgage loan held by First Bank & Trust, nearly $195,000 in back property taxes, over $10,000 owed in state taxes and various transaction fees and brokerage commissions.

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It leaves, according to a memo to aldermen from City Manager Wally Bobkiewicz, just under $60,000 to pay off the original $200,000 second mortgage held by the city and more than $14,000 in unpaid interest and late fees.

It also wipes out what was described at the time the deal was negotiated in 2012 as a $214,000 investment in the building by the restaurant owner, Signature Foods Solutions, Inc. Principals of that company continue to operate two other restaurants under the Chicago’s Home of Chicken & Waffles name, one in Chicago’s Bronzeville neighborhood, the other in Oak Park.

The prospective purchaser of the building is Akmal Qazi, who runs two restaurants in Skokie — Kabul House, an Afghan restaurant at 4949 Oakton St., and The Boiler Shrimp & Crawfish a Cajun and Creole spot at 3445 Dempster St.

Kabul House actually got its start at a location on Main Street in Evanston. No word yet on what cuisine Qazi plans to feature at the former Chicken & Waffles site.

Bobkiewicz says taking the loss on the old restaurant deal will clear the way to “return the property to a productive and desirable use.”

Before it was a restaurant, the building had housed an auto parts store that went out of business.

Bill Smith is the editor and publisher of Evanston Now.

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14 Comments

  1. Loss from a profitable company?
    Why is the city not going after the parent company that is operating TWO seemingly profitable businesses? If Wally & the Aldercreeps (make a good shock-rock band name, huh?) are so intent on giving away the city’s cash, then how about they pony up the amount owed themselves, and leave the rest of us taxpayers to be able to afford some of the rest of the junk they’re so intent on wasting money on.

    Time to vote the whole lot of them out.

    1. Heads need to roll, enough is

      Heads need to roll, enough is enough. The City Managers Office, 2nd ward alderman, and office of economic development must be held accountable.  I hope several of you will voice your frustration over this bad business decision at the council meeting. 

  2. More evidence of Council’s lack of business knowledge

    Do we need more evidence that the Council et al have no business and finance knowledge and their "picking winners" is total bunk?

    Any city official who voted for or had a hand in this deal should resign in disgrace—or be impeached or voters should have a recall.

    No more city loans, guarantee or other gifts. If businesses or theater are suppose to be profitable or useful, let them get their bank financing on their own–no city involvement.

    1. Conclusions with no data

      You draw the conclusion the council has no business or finance knowledge due to the failure of one business.  Where are the data on how many businesses the city has loaned money?  How many failures have their been?  How many have been sucessful?  Without more information no conclusion can be made except this was a mistake that may or may not have been avoidable.  Anecdotal evidence is not meaningful.  We would need to know much more information in order to decide if what they are doing is worth it.
       

      1. Loaning Money???
        I think you’ve missed the point here. It shouldn’t be about how many successes and failures there have been……NO business owner should expect a municipality to give them money. That’s why there are banks and business loans, done the proper way. BYOM….bring your own money if you want to do something……a city should only be responsible for the regular legal paperwork for being in business. It’s totally brazen for someone to approach and say they want to have a business in Evanston…..and then say, by the way, give me some money! It’s ridiculous, to say the least!

      2. Lost money..by the way
        Think of all the things that $154,000 could do to help underprivileged children and families in need in Evanston….food, school supplies, recreation supplies for after school enrichment, etc……YIKES!……That’s money flushed right down the toilet!

      3. Anecdotal evidence is not meaningful

        You make a great point, with a lack of transparency from the city these matters can only be anecdotal.  I would like to hear from the alderman on a qaurterly basis how all of thier business dealings are going.  Maybe we should hold them accountable just like Wall Street companies whom have to do the same forr their share holders.

        One would have to think it would lessen the appetite for future loans.

        By the way, I would go short city loans.

         

    2. City loans
      So…fill me in..is there something written in stone that says the city WILL provide businesses with loans? This doesn’t even seems feasible or reasonable. If I want to start a business…..I’m taking that on myself…my concept, my desired location, etc…and MY money. The fact that a business person thinks that they don’t need to go to a bank for a loan, is ridiculous. There is no reason at all for the city to be a personal lender……put an end to that nonsense. If prospective businesses don’t have the start-up to proceed, then they need to put their idea on hold until they get their OWN money. That’s what banks are for.

    3. Remove all sitting representatives
      I highly doubt the Council would willingly step down, but they do need to be replaced. I would suggest everyone vote against any incumbents.

      1. council, etc…..
        I you all recollect…form an Evanston Now article……the Aldermen love Wally, renewed his contract, and pretty much gave the impression that he can stay on as City Manager for life….so goes that. Now, if many of the aldermen got replaced, then that could be a different story. WHO is the final voice regarding giving away money? Wally…the aldermen…Marty Lyons….? That is a huge decision, and I’d like to know who ALL approves things like that.

      2. But keep Alderman Don Wilson

        In the 25 years i have lived in Evanston there is one Alderman who has truly distinguished himself, and that is Alderman Don Wilson. He is bright, works hard for his constituents and thoughtfully and considerately evaluates the issues before casting his vote.

        We need more Alderman like Don Wilson.

        1. I agree about Wilson as far as I can see from his record

          I don't live in his ward and don't know all his votes/policies, but what I do see is him being the sane person on the Council.  Instead of pouring money into every proposal, he seems to have thought about the issues.
           

          1. Alderman Wilson
            Correct for both of your comments. Alderman Wilson is the prime example of what aldermen should be doing. Maybe because he is an attorney, and reviews issues and facts before making decisions. It’s wonderful dealing with him…..I take him to be thorough, honest, and caring.

  3. Does the math add up?
    I can’t figure this out, but maybe I am just a few cups of coffee short today.

    We were told the owners were going to keep up with payments, but the forgivable portion of the 200k loan plus the payment is well over 200k — the total figure is 214k. Is the 14k late fees? Even then I can’t figure out where the ongoing payments are. Were they going to the 1st mortgage? I don’t understand 2nd mortgages — I have been fortunate enough to not need one. Maybe that makes me a good candidate for city assistance? I promise to pay back at least 30% of what I owe!

    The owners should be held liable to this. I took a bath on selling my property last year, why can’t they?

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