BIG HOLE OPENS UP IN THUNDERSTORM
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| Buffao's Restuarant after the first thunderstorm |
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| Buffao's Restuarant after the first thunderstorm |
Nation's Restaurant News. August 11, 2003, by Jack Haves
HICKORY, N.C. -- When Sean Morris opened his franchised Buffalo's Southwest Cafe here in October 2001, only a month after the 9/11 tragedy, local customers supported him handsomely despite the timing.
Traffic and revenue grew steadily at the restaurant until the following summer when, at the start of dinner last Aug. 15, Morris' parking lot began to cave in, taking with it an expensive sports car that just had been parked by one of his guests.
"We ware on an hour-and-a-half wait, and somebody in the bar yelled out:
'Who owns the yellow Corvette—it's going underground.' Next thing you know, everybody's running for their cars, and this sinkhole is widening in front of the restaurant," said Morris, a casual-dining veteran whose family founded Gastonia, N.C.-based Carolina Country Barbecue.
Actually, two sinkholes opened on Morris' property last August following weeks of rain, eventually merging to form a 150-foot-long trench approximately 40 feet deep along Highway 70, the major artery passing his restaurant's front door.
Until recently—following a 10-month ordeal filled with arguments over who was responsible for the cost of repairing the sinkhole and alleviating the subsequent flooding of other businesses nearby—Morris spent every day wishing he could just be back in his shuttered restaurant, serving guests.
His wish was fulfilled when the Buffalo's branch reopened In June, but only after Morris tacked a $1 million repair bill onto his preopening debt balance and was told the sinkhole episode has put him at least half a decade away from profitability.
But first, the novelty of the sinkhole incident captured international headlines and put the city of Hickory on the world map. Attracting particular interest was the contention of Mayor Rudy Wright that, since the sinkhole had opened on private property, the city had no financial obligations for repairs.
Then, when the state Department of Transportation stepped in to address the flooding issue, a condemnation was ordered that nearly spelled the end for Morris' business since, he claims, it would have forced him into bankruptcy.
*I was trying to get Hickory to fix the problem," Morris said. "When we built the restaurant, they were acting like they owned the 96-inch drainage pipe that runs through the front of my parking lot. It was that pipe that burst and ate away the ground beneath."
Morris asserted that an overload of the drainage system had caused the failure. The city told reporters at the time that they had warned Morris about the pipe. But Morris said he never received the document they claim to have sent him.
"Now we're open again, and things look promising, but we've got another $1 million of debt at the minimum," he said. "Our accountant says it's going to take five years for us to begin showing a profit. Through this whole nightmare, we've found out who are our friends and who they aren't."
Mayor Wright said he regretted that the city could not make an exception for Morris and relieve him of financial responsibility. But to do so, he said, would have exposed the municipality to liability for future claims.
"We had to follow the state's language on this matter, which says the resolution of water problems of any type on private property resides with the property owner," Wright explained. "But I'm glad the restaurant is back in operation. It looks like business is good now, and I'm confident they will recover."
One of Moms' friends in the yearlong sinkhole incident turned out to be First Gaston Bank executive vice president Mark Skilstead, whose office came through with financing to cover the costly underground repair. The bank fronted Morris another $1 million when it realized the condemnation would have forced him into bankruptcy.
"We had a secured loan that, under language of the condemnation ordered by the state, was going to become an unsecured loan, so we said the better risk would be to repair the sinkhole, reopen the restaurant and let the fruit of that effort repay us," Skilstead recalled.
According to Morris, the bank, taking into consideration the time needed to reopen and begin generating consistent cash flow, also suspended payments for six months.
Morris explained that First Gaston's intervention took place at the llth hour when Skilstead halted the condemnation by convincing state officials his bank would guarantee the financing.
"We learned a lot of taw from this," Skilstead said. "We don't know anyone in our field who's encountered this type of situation. We were perplexed. Wa went back on several occasions to rethink the underwriting process. It's been fascinating, to say the least."
Morris also had generous words for his food vendor. Hickory-based Institution Food Mouse, which, he said, had extended generous terms on unpaid invoices during his struggle to reopen.
"They're carrying a $60,000 note for us and still have not asked for that money," Morris said. "They've been unbelievable."
"IFH has helped a lot of people get into and stay in the restaurant business," said Raleigh, N.C.-based foodservice industry lobbyist and consultant T. Jerry Williams, former chief executive of the North Carolina Restaurant Association. "It's nice to get the support you need when times are tough."
Other gestures of generosity came from Morris' accountant, his printer and several of his employees. Morris said he was advised by his attorney and his insurance company not to make current payroll after the sinkhole shutdown, but he chose to do so anyway, for approximately 80 employees. After that ha continued to pay four managers for 10 months while construction delays dragged on.
"It turned out to be a blessing," Morris said. "One of our server's husbands is a plumber, and he came and did a lot of work for us. Then, when we were getting ready to open back up, our people came and worked for nothing."
Morris said his family "maxed out every one of its credit cards. Tensions were high, and we definitely found ourselves at the bottom for a while," he said. "At times we thought we weren't going to be able to pull it off."
After the restaurant reopened, Morris walked into his accountant's office with a checkbook and asked what he owed but simply was told, "Get yourself healthy, and then we'll talk."
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| After the second storm hit! |
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| Repairing the hole |
