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Brewpub Developer, Gillum’s Treasurer Sued for Over $650,000.

Posted on September 9, 2014

Brewpub Developer, Gillum’s Treasurer Sued for Over $650,000.

Last year the City Commission voted to spend approximately $2.1 million to renovate the old electric building in Cascades Park to house a brewpub restaurant. The developer of the restaurant is required to invest $1.5 million.

A lot has changed since the original idea of a brewpub.

First, the winner in the bid process decided they had better options and backed out.

Second, somehow, without another bid process, a local restaurant owner -who happened to be the campaign treasurer for then City Commissioner Andrew Gillum- was selected to take over the project.

And then Tallahassee Reports wrote about deadlines and milestones being missed by Cascade Holdings, the new developer of the proposed restaurant in Cascades Park.

In addition, Tallahassee Reports revealed how one of the requirements in the Memorandum of Agreement – a commitment letter outlining the developers ability to contribute approximately $1.5 million to the development of the restaurant- was waived and a less stringent “proposal letter” was accepted.  See story here.

And now this.

Tallahassee Reports has learned that one  of the principles of Cascades Holdings  and the campaign treasurer for Mayor-Elect Andrew Gillum, Adam Corey, is being sued in Circuit Court for over $650,000 in two separate lawsuits revolving around the ownership of the downtown restaurant, 101 Mint.

The first lawsuit was filed on Dec 26, 2012 and claims that the Tallahassee Hospitality Group (THG), which is owned by Corey, failed to payoff a loan as ” the sole consideration” for the transfer of assets of 101 Mint to the Tallahassee Hospitality Group. The amount of the loan was $317,000.

The lawsuit was filed by Tapas Lounge, Inc., former owner of 101 Mint.

Attached to the complaint was the Assets Acquisition Agreement bearing Adam Corey’s signature as “the Purchaser”.

The agreement states that “the purchase price for this transaction shall be equal to the note balance on the day of closing. Purchaser shall assume the note at closing.”

The lawsuit has been delayed due to the plaintiff changing attorney’s, but the latest filing was on August 15, 2014.

The second lawsuit was filed on January 3rd, 2014 by Tarek Habib, former owner of 101 Mint restaurant through his 50% ownership in Tapas Lounge, Inc., the complainant in the first lawsuit.

The lawsuit lists Corey and Tallahassee Hospitality Group, LLC as the defendants.

Habib’s complaint argues that Corey and THG has failed to pay Habib $425,000 as part of Corey’s purchase of the 101 Mint restaurant.

The complaint states that Corey and THG began making payments in February of 2012 but after eight payments and approximately $44,000, the payments stopped.

Based on information on the Leon Clerk of the Courts website, a motion to dismiss by the defendant, Adam Corey, was denied by the judge.

Subsequently, both sides have begun the discovery process.

What does this mean for the agreement the City of Tallahassee has with Cascades Holdings to build a restaurant in Cascades Park?

Tallahassee Reports talked to an experienced local banker that indicated pending litigation, such as in this case, would have to be disclosed to a bank considering a decision to offer a letter of commitment.

Was the litigation, which was initiated before financial negotiations with Cascade Holdings, disclosed to City officials?  If not, does this affect the City’s relationship with Cascade Holdings?

Tallahassee Reports reached out to the City staff working on the Cascades agreement but calls have yet to be returned.

Tallahassee Reports will continue to seek answers to questions about this project, which will ultimately be financed by your tax dollars.

4 Responses to Brewpub Developer, Gillum’s Treasurer Sued for Over $650,000.

  1. Hope Reply

    September 10, 2014 at 9:07 am

    Only question now is what date will the paddy wagon pull up in front of City Hall?

  2. Brad Reply

    September 10, 2014 at 12:12 pm

    I would expect nothing less from this scam!

  3. Mark Daniel Reply

    September 10, 2014 at 9:49 pm

    If you wish to consider some implications on this debacle, let me point you in the following direction:
    First, review this Tallahassee Reports article from three years ago:

    http://tallahasseereports.com/2011/06/03/tallahassee-historic-preservation-process-raises-questions/

    There have been several changes of personnel involved in the Architectural Review Board and Tallahassee Trust for Historic Preservation, but the described takeover of a public citizens’ board and the questionable ethical compromises remain.

    This should be one of the first targets of our new Ethics Process in the City, if the election allows it.

    This board is a pivotal rubber stamp step in the process for approval of the Brewpub’s progress for development and financing.

    Next, read the following entry on Wikipedia, regarding the Racketeer Influenced and Corrupt Organizations Act:

    http://en.wikipedia.org/wiki/Racketeer_Influenced_and_Corrupt_Organizations_Act

    Consider each of the questionable steps this brewpub project has taken.

    I read somewhere that federal money which has been provided by the Department of the Interior has been given to Florida (among other states) for preservation of historic sites. So either Federal or State RICO laws may apply.

    Our State of Florida Department of State/Division of Historical Resources was the second step for the compromised historic approval by the Tallahassee Board.

    Reappointment of the compromised Architectural Review Board membership has been by the City of Tallahassee and Leon County Commissions, with full knowledge available to them of the ethical compromises and violations of the code they were making.

    And, once again, our City Attorney’s Office has had a very heavy hand in the affair, justifying the ARB makeup.

    When you read the methodology described in the Wikipedia RICO article, it becomes very easy to overlay that long series of innocent (but questionable) steps onto the process this Brewpub is following.

    Everyone involved at every step seems so pure and forthright in their pursuit of historic preservation of this old power plant, but the end result does not appear too dissimilar from an organized crime.

    Any banker or lender involved in this project who does not do the obvious due diligence on how the approvals got this far deserves to lose their money.

    Unfortunately, they are also risking Federal money through the security of their institution.

    And I would not be surprised to learn that financial guarantees from the City of Tallahassee are tied up in the fine print, so we’ll lose big time when the whole deal implodes.

    • Hope Reply

      September 11, 2014 at 9:45 am

      Yes, the “Insiders Special Interests” are benefiting at the expense of taxpayers, economic development, and public safety. Hopefully, the Feds will step in soon and break up this pocket of corruption that has set us back 20 years.

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