Farm-to-fork success story became riches-to-rags tale
06/08/2014 12:00 AM
10/08/2014 11:59 AM
When Jess Milbourn and Monda Korich were launching their West Sacramento farm-to-fork restaurant, The Eatery, they had the makings of a power couple on the local culinary scene.
He had graduated in 2002 from the prestigious Culinary Institute of America in Hyde Park, N.Y., had plied his time in many restaurant kitchens, and was ready to do his own food.
She had worked in restaurants since she was 16 and had a wealth of experience in the front of the house and skills that largely complemented his.
The Eatery opened Aug. 2, 2011, in a shopping center anchored by a Target. The often-glowing response was immediate.
Many ingredients of the casual bistro-style food were sourced from local farms. The beef was the high-end, grass-fed variety at reasonable prices. Milbourn engaged on social media. City leaders touted it as a sign West Sacramento was on the rise.
It was practically a love-fest. The restaurant earned three stars in The Bee, praised as “a temptation for food fans from beyond the borders of this often-overlooked or belittled enclave.”
Things looked promising.
Or so it seemed. Behind the scenes, the picture was not so rosy, and despite hard work and sacrifice, they eventually woke to a nightmarish reality: Their farm-to-fork dream was not sustainable.
Milbourn and Korich agreed to speak in detail about the rise and fall of The Eatery because they want their experience to serve as a lesson for others. They’re not asking for sympathy or making excuses. They say they simply took on too much themselves and overlooked certain details.
Once things revved up, the restaurant was grossing about $80,000 a month, but the $7,000 monthly rent was too steep for those numbers; in retrospect, they say they should have been more assertive in negotiations.
Worse, about six months in, the Board of Equalization warned of unpaid sales taxes totaling $24,000.
Amid the early commotion, they had neglected to set aside the money.
Milbourn’s head was spinning. There was no wiggling out of it.
Consulting a lawyer and an accountant, Milbourn and Korich worked out a payment plan. The initial demand was weekly installments of $1,200, which would have bankrupted the restaurant. The couple worked out a compromise – biweekly payments of $1,200. They were told that if they missed a payment, the arrangement was off.
Then winter hit, and as it does in the restaurant business, things slowed dramatically.
“As a small business, how do we come up with an extra $600 a week?” said Milbourn in a recent interview. “You wake up in the middle of the night and think, ‘How will this get paid, and what is the next step?’ I’m a pretty easygoing guy. Now I’m going through my life with this dark cloud over me.
“You’re trying to pay your vendors, and in the back of your mind you’re thinking, ‘If we don’t hit certain numbers this week, we’re screwed, ” added Korich.
Milbourn faced a quandary. He was touting the virtues of farm-to-fork cooking, but “how do I save $600 a week? You go, ‘OK, I don’t have to buy organic produce. Maybe I can buy commodity chicken.’
“To have to consider that, it hurts,” Milbourn said with a shrug. “The alternative is, do I lay people off?”
After a couple of payments, they missed one, and all bets were off. The Board of Equalization issued an interest penalty and put a lien on The Eatery’s accounts. Suddenly, thousands of dollars to pay vendors was gone. A frantic Milbourn pleaded for the Board not to seize the account for payroll.
The celebrated West Sacramento culinary couple continued to keep up appearances, but restaurant problems also were overwhelming them at home, where they were parenting a daughter, Audrey, now 7. They were growing impatient with each other.
Sometimes Milbourn caught himself being short with his wife. One day, she packed her bags and took their daughter to visit her sister in Portland, Ore., leaving her husband a personal note.
It boiled down to this: They either had to get a handle on the financials of the restaurant – and the stress it was placing on their marriage – or make the painful decision to shut down the business.
“I’ve been in restaurants since I was 16,” said Korich. “Things happen, and you don’t take it personally. But that only goes so far when it involves your spouse. I did not want that to happen in front of the staff because we are the ones in charge, and you have to maintain a certain amount of respect for each other. When that line was crossed, I said we need to have a chat because this isn’t going to work if we do this all day.”
“I’m trying to be a good manager, a good chef, a good father and a good husband,” Milbourn said, “but because of what’s going on, you end up being bad at all of them.”
Stressful months passed. With their attorney, they worked out a new payment plan, but despite frantic efforts, they couldn’t pull it off. Then they got behind on the rent and racked up $20,000 in legal bills and another $20,000 in accountant fees. But Milbourn says that without those two, “we would have been in financial ruin.”
Milbourn felt humiliated when a top meat supplier sent its unpaid bill to collections. There were more calls and more payment plans to arrange.
Milbourn was no longer the upbeat chef. In the back of the restaurant, he would plead with bill collectors for more time.
“Personally, it hurts that I put someone in that position,” he said.
In the summer of 2012, they fell behind on their mortgage. While Korich received an annual salary of $20,000, Milbourn earned nothing. They were in danger of losing their house.
“That’s where you live,” Milbourn said softly. “We had saved up for years to buy a house.”
He added, “One of the things we decided early on was that Audrey couldn’t suffer because of this. She had her birthday party. We made sure she had Christmas.” But beyond that, the couple struggled to find hope.
The Eatery continued doing well, but there simply was no way out. By January 2014, it was becoming clear that despite their best efforts, the business was doomed. They owed $21,000 to their landlord.
Milbourn and Korich had a series of emotional talks and decided to call a halt to their dream.
But one more humiliation was to come.
On April 22, just as Milbourn turned 39, he called the staff together to break the news. His daily check of the bank accounts showed that the Board of Equalization had seized all three bank accounts again – $12,000 suddenly gone. Not only was Milbourn going to have to tell his 20 hardworking employees that they were out of work, he would have to plead for their patience for the $6,500 owed in payroll.
“It’s the worst feeling. The one thing we wanted to do was pay the employees. We told them everything. We told them don’t have the money for them right now, but we’re working our asses off to get it.”
Just last week, Milbourn said, “We actually got one of them paid.”
He and Korich sold equipment and furniture for $8,000 and donated packaged food from their walk-in freezer to nonprofit Plates Café.
Korich now works as an events coordinator for the National Pro Fitness League. Milbourn has been taking on catering jobs. They still owe $17,000 in taxes, and they continue to pay. They will come up with the money for the ex-employees. They did not declare bankruptcy.
In recent weeks, Dave Vierra, a West Sacramento farmer and owner of a popular produce stand and pumpkin patch, approached Milbourn about a business opportunity: Vierra would supply the produce, and Milbourn would showcase farm-to-fork cuisine in an old building on the property.
Milbourn will start small – a few sandwiches and some barbecue – and gradually grow the business. The tentative name is The Farmhouse, and the first modest phase is expected to launch in July. The full large-scale restaurant could be up and running by 2016.
Three years after The Eatery opened and two months after it closed, Milbourn and Korich have a new, $200-a-month payment plan for taxes owed. Milbourn, who is still making payments on his tuition for culinary school, expects to pay off the taxes in six years.
“I’d like to get it paid off faster,” he said before heading to another catering job, “and get some closure on it.”
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