Time and luck ran out for Katie Mullen’s.
The Irish pub in downtown Denver shut down Wednesday night, a move that put the cavernous, 10,885-square-foot restaurant space back in the hands of Chartres Lodging Group, the San Francisco investment firm that owns the Sheraton Downtown Denver Hotel at 1550 Court Place.
The closure was noted Thursday morning on the restaurant’s Facebook page in a post that invited patrons to Katie Eile’s at Orchard Town Center in Westminster.
Katie Mullen’s owner, Northwest Bars Inc., . Owner Paul Maye told the Denver Post then that Katie Mullen’s fought an uphill battle from the time it opened in early 2009. The recession severely limited financing options and new 16th Street Mall competitors such as the Yard House siphoned away customers.
The restaurant filed for bankruptcy just after Chartres, operating as W2007 MVP Denver LLC, served Maye a notice of default.
Northwest was more than $92,000 behind in rent and penalties after failing to make payments in November, December and January, W2007 attorneys said in a filing made with the U.S. Bankruptcy Court in Colorado. W2007 sought a forcible entry and detainer action.
Rent payments “dribbled in,” and then the March 31 rent check bounced, W2007 claimed. Additionally, Northwest breached the lease terms by granting liens on the restaurant to other creditors that were in excess of $295,000.
Katie Mullen’s base rent for its first five years of operation was $32,283.33 per month, increasing to $40,818.75 per month for years six through 10, court records show.
“Certainly, debtor’s disappointment for failing to make its business work does not rise to the level of harm W2007 will suffer if it is unable to obtain possession of the premises and is forced to endure debtor’s continued and incurable breaches of the lease,” Matthew A. Morr and Andrew J. Petrie, the Ballard Spahr LLP attorneys representing W2007, wrote in court filings.
W2007 and Northwest hashed out an agreement earlier this month that allowed the restaurant to operate rent-free until June 5, when a large event was scheduled. Maye promised to hand over the keys the following day, Petrie said Thursday in an interview with The Denver Post.
Closing the restaurant on Wednesday breached that agreement, Petrie said.
Sheraton Downtown general manager Tony Dunn said the space is being marketed in hopes of landing a corporate-owned steak and seafood concept with a bar focus that would be appealing to hotel and convention guests. Finding the right restaurant could take a couple of months.
“We’re going to take our time to find the right partner, the right tenant,” he said.
In the interim, the Sheraton will use the restaurant space as a venue for private events, he said.
Maye and his attorney could not be immediately reached for comment.
But according to transcripts of a March 7 court hearing, Maye said Katie Mullen’s needed $6 million to $7 million a year in gross sales to be successful. Court records include financial statements showing the restaurant’s revenue totaled $3.5 million in 2015, down from $3.6 million in 2014.
“To be honest, then, we have struggled probably with the upturn in the economy,” Maye said in the hearing. “Ironically, we have struggled to get good management teams and stuff like that with our people who have moved on to other corporations and stuff with the more corporate culture type.”
Maye also said in the hearing that he had been in discussions with W2007 to sell the restaurant to a “major corporation, a big player here in the United States,” but the agreement wouldn’t allow him to pay off creditors.
Wee Katie’s in the Highland neighborhood and Katie Eile’s in Westminster are not owned by Northwest Bars Inc. Maye told the court he’s looking to sell his interest in Wee Katie’s.
Alicia Wallace: 303-954-1939, awallace@denverpost.com or @aliciawallace
