The three remaining private businesses operating in downtown Davenport’s riverfront Freight House were shut down Monday afternoon, after city officials and businessman Larry Whitty failed to find common ground on a new lease deal.
Mayor Bill Gluba said Whitty called him Friday and said he was closing the businesses — Nan’s Piano Bar, Penguin’s Comedy Club and Balls and Pucks Sports Cafe — on July 3. Whitty called Gluba back Monday, however, and said the timetable had been accelerated.
“We had hoped it would go through the Fourth of July, but it’s not our call,” Gluba said. “It’s unfortunate people are going to lose their jobs.”
Whitty stepped in temporarily after previous owner Jeff Johnson defaulted on rent, property taxes and other bills. Johnson had been buying the building from Whitty on contract.
The city agreed to let Whitty go in and do a business model evaluation for a few weeks, rent free. Whitty said he learned that the 11,000 square feet occupied by the piano bar, club and bar and grill was too big for businesses that generated significant revenue only on Thursday, Friday and Saturday.
“It’s just too much overhead,” he said. “We just don’t think it’s meant to be.”
The sticking point was lease payments. Gluba said Whitty insisted he could not keep the businesses going unless rent was waived. Gluba said he, the city council and the Levee Improvement Commission could not support that because it would give Whitty an unfair advantage over other private businesses downtown.
“I asked him repeatedly what he felt he could pay in rent, and he said, ‘Zero,’” Gluba said. “He said he wasn’t going to spend good money after bad.”
The city has a lengthy to-do list when it reacquires the property, which is likely to happen at the July 14 levee commission meeting.
One of the first is to have back property taxes in the amount of $128,000 abated. According to Tom Warner, the city’s corporate counsel, state law in Iowa requires the Scott County Board of Supervisors to abate the taxes if the building and grounds are owned by the city.
Karl Rhomberg, a member of the levee commission, said that board will seek to have the Freight House reassessed. Currently, it is assessed at $2.8 million — or $143 per square-foot — which Rhomberg called “ridiculously high.” By comparison, the Front Street Brewery, which also has a river view and sits in the flood plain, is assessed at $45 a square foot.
A more reasonable assessment will help the city market the complex to prospective operators, Gluba said.
“The current assessment is just outrageous,” he said. “Lowering that alone will help knock down the tax burden, which was one of the problems in trying to rent it.”
A public forum on the future of the Freight House held Saturday morning by the Quad-City Times editorial board generated many ideas and suggestions from Davenport Farmers Market customers and vendors. Many favored uses that build on the health-conscious local businesses that have fueled the market’s success, including restaurants with menus that highlight local produce or a grocer with ready-to-eat healthful meals using foods grown in the Quad-City region.
Rhomberg said he wouldn’t be surprised if an expanded — and publicly owned — indoor farmers market isn’t part of the equation. But he doesn’t want to rule out anything.
“If an operator showed up tomorrow, I’m sure we’d be falling all over ourselves to make a good deal,” he said. “On the other hand, you have to be realistic. How many restaurants have to fail in that location before we get the idea that it might not be a good restaurant location? The nightclub and piano bar thing are proven to work, but not a restaurant.”
According to employees of the businesses and some of the artists booked to play at Nan’s, there was no warning of the pending closure.
Nan Losasso, the first manager of the piano bar who recently was working part time assisting in marketing and booking, said she was informed she was losing her job on Monday via text message.
Dean Madonia, who was scheduled to appear as part of a dueling piano act with Paul Hoefler on July 16-17, said no one told him the gig was off.
“I do this for a living, supporting a family of four, and I have already purchased my plane fare and rented a car for that weekend,” he said. “It is too late for me to rebook the gig, and if I don’t get paid for the flight and car, this will be devastating to me and my family.”
Whitty said the lack of communication with artists lies with Johnson, who was retained as the booking agent after losing his ownership stake.
As for the long-term future of the building, Whitty said he hopes a new use is found.
“I think there’s probably something that can work there,” he said. “It’s going to have to be an entrepreneurial project. Somebody’s going to have an idea that will work, and I hope the city can work with them on occupancy assistance.”