Steamboat Springs Landlord Tom Sharp placed a closed sign on the doors of El Rancho Nuevo restaurant in downtown Steamboat Springs Monday after obtaining a court order allowing him to repossess the property from the owners for failure to pay rent.
Joe Walker, Dave Brererton and Joel Kunkel owned the restaurant at 425 Lincoln Ave. They are the principals in Steamboat Brewery and Tavern, Inc., which was named in the court order.
The repossession of El Rancho Nuevo has no direct bearing on its next door neighbor, Steamboat Brewery and Tavern, Walker said.
It is open in a separate building and has just introduced a new menu, Walker added.
"I'm very sorry those guys weren't able to make it go," Sharp said. "For some reason they are able to hit home runs at Steamboat Brewery, but not over here."
Walker said he and his partners are eager to focus on just one restaurant in the future.
"It's not as easy to operate two restaurants," he said.
Documents on file at the Routt County Courthouse reflect that Sharp began writing formal letters in mid-July seeking payment of three months of back rent totaling just less than $12,000 for April, May and June.
Sharp sought relief from the court on Aug. 7, filing a demand for compliance or possession. County Judge James Garrecht found in Sharp's favor on Aug. 28.
The owners of Steamboat Brewery and Tavern, Inc., signed a 5-year lease for the El Rancho Building on Sept. 24, 1997.
It was due to run out in November.
The El Rancho building is the immediate neighbor of the Fifth Street Marketplace, where the Brewery and Tavern is located. The restaurateurs' original plan involved opening a Mexican-themed restaurant next door to their established restaurant.
That would allow them to deliver their line of microbrews to a second restaurant.
Sharp said Monday there is a significant possibility that he will be able to rent the El Rancho building promptly to another restaurant operator. He will not initiate efforts to recover the rent owed him until the outcome of those negotiations is known.
The back rent could accumulate to more than $35,000 by November, based on the minimum monthly rent of $4,447 plus monthly tax rent of $759, his entitlement to 6 percent of the restaurant gross over and above the minimum rent and interest accruing at 18 percent.
Sharp has owned the El Rancho building for 12 years.
As the name "El Rancho Nuevo" implies, it was the reincarnation of another restaurant.
The original El Rancho had a long run as a mom and pop restaurant typical of many western towns. It served breakfast, lunch and dinner, and was the morning coffee break spot for a group of Steamboat old timers.
The El Rancho was the focus of a small controversy in 1992 and 1993, when the city sought to force Sharp to tear down the retro sign in front of the building. The sign was larger than the city's new sign code allowed. Sharp sought to have the bright yellow sign "grandfathered in," and went as far as launching a petition drive to save it.
Some of the petitions were rejected because some of the names on the list had irregularities. In the end, the City Council relented, and the sign still stands.