Just one year after opening its doors at 100 Trumbull St., Dulce Restaurant is facing eviction for failing to make payments on its lease and other loans since last October, court documents show.
And on Aug. 24, the company that owns the restaurant — DG Restaurant Group — filed for bankruptcy in Hartford court, putting its future into question.
The news comes on the heels of a report issued by the city of Hartford, which said 40 percent of downtown’s half-million square feet of retail space is vacant. It also comes at a time when part of the landmark Bushnell on the Park property, which sits less than a mile away from Dulce Restaurant, remains in the foreclosure process.
Dulce, which offers “American cuisine with European influences,” is an upscale Manhattan-style eatery at the corner of Trumbull and Lewis streets.
Peter Guimaraes, a general manager of the restaurant and a member of the family that owns it, did not return several calls seeking comment. But in January 2008, Guimaraes told the Hartford Business Journal that his family was opening the restaurant to tap into what he called a neglected downtown dining demographic, the older-than-30 crowd looking for something classier than the average bar or restaurant.
Richare Wareing, a lawyer representing DG Restaurant Group, declined to comment.
Maggie Gallagher, a restaurant specialist at MG Real Estate in Hartford, said the economic downturn has been difficult for restaurants in Hartford and across the country because fewer people are dining out. At the same time, people who are going out to eat are looking for less-expensive options.
“The current economy has been challenging for everyone, particularly for new businesses and restaurants that haven’t been operating for a lot of years,” Gallagher said. “When people are dining out, they are looking to get the best value for their money.”
Gallagher said many restaurants in downtown Hartford have been fighting for the same demographic Dulce was looking to attract. Some of its main competitors include Max Downtown and Dish Bar & Grill. Dulce is also located next door to Vito’s on the Park, an Italian restaurant.
DG Restaurant Group signed its lease in October 2007 to occupy 4,000 square feet in the retail section of the Trumbull on the Park property.
That’s the largest retail space the building has available. Alchemy Studio Salon and Quiznos also hold spaces in the building, occupying about 1,000 square feet each. Another 1,300 square feet, which is set aside for retail space, currently remains vacant, city records show.
DG’s expenses included a 10-year lease with minimum monthly payments of $6,000 and a common area maintenance fee, court documents show.
Additionally, Trumbull on the Park provided DG Restaurant Group a $200,000 promissory note, which was to be used to help the company to do “tenant improvement work.”
On a monthly basis, DG Restaurant Group owes Trumbull on the Park just over $10,000, but has failed to make full payments since last October, said Glenn Duhl, a Hartford attorney representing Trumbull on the Park.
Duhl said Trumbull on the Park sent a letter to the restaurant owners Dec. 18 informing them they were in default of the loan and demanded payments. The letter said that if the payment wasn’t received on or before Dec. 24, the eviction process would begin.
Despite the demands, no payments were made, Duhl said.
The eviction process got underway in June, but hit a road bump late last month when DG Restaurant Group filed for bankruptcy. That can hold up the process because once a company files for bankruptcy, all other legal actions against them are frozen, Duhl said.
“You need permission from the bankruptcy court to resume any other legal action outside of bankruptcy,” Duhl said. “But the bankruptcy judge could lift that freeze and allow eviction to go forward.”
Duhl said his client has worked hard to try to keep the restaurant in the building, but now needs to move forward because it would like to find another tenant that can pay the rent. Duhl said it has already begun to explore potential replacements and that a restaurant continues to be “a good fit,” for the area.
“The landlord has been very kind in trying to allow this business to prosper,” Duhl said. “They didn’t want to issue an eviction right away because they hoped to get the attention of the business owners. They have been extremely patient, but they need to move on.”
Vacant retail space has been a problem for downtown Hartford. As of July, 203,000 square feet of the 511,000 square feet of retail space identified in 191 units in the center of the city is vacant, according to a first-ever retail-space survey by Hartford’s Economic Development Division.
The survey also found that most of the vacant space is concentrated on downtown’s four key retail corridors: Main Street (72,728 square feet); Trumbull Street (47,740 square feet); Asylum Street (39,389 square feet); and Pratt Street (20,082 square feet).
Restaurants and café/bars dominate the 60 percent of occupied retail space in downtown, according to the survey.