The Eatery in West Sacramento went dark Sunday, becoming another unfortunate example of a popular restaurant leveled by a combination of dire financial circumstances, including back taxes and late rent.
“We couldn’t keep bleeding and couldn’t operate without any cash,” said Jess Milbourn, who co-owned the Eatery with his wife, Monda Korich. “There’s not a lot we can do at this point, but we have to be optimistic.”
The couple opened the Eatery in August 2011, in a city that’s not known for its fine restaurants. The bistro was a revelation for West Sacramento and quickly became popular with diners on both sides of the Sacramento River.
Certainly, the owners brought A-list credentials to the task: Executive chef Milbourn is a graduate of the Culinary Institute of America in Hyde Park, N.Y. Korich, a former manager at Paesano’s in Midtown, ran the front of the house.
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But then came a financial storm. “There were a lot of moving parts that needed to work together (to save the business), but that didn’t happen,” Milbourn said on the phone this morning. “I don’t want to come across as blaming anybody. We knew it was going to be risky going into it. We made mistakes early on, then we had some rough patches and ended up getting behind on (paying) sales taxes to the State Board of Equalization. We let (the debt) get too big and they came in and got it. One lesson we learned is that state agencies don’t negotiate payment plans.”
Over a period of months, the situation with the Board of Equalization led to a domino effect, Milbourn said. The couple fell behind on their $7,000-a-month rent, which they unsuccessfully tried to renegotiate. Next came debts to their vendors and staff. Essentially, there was not enough cash to go around.
“We were operating on a week-to-week basis,” Milbourn said. “We wanted a reasonable opportunity to get everybody paid all along, but the Board of Equalization and the landlord weren’t willing to negotiate. I think they could have worked with us a little better.
“We know what we owe and we’re absolutely going to get everyone as right as possible as quickly as possible,” he said. “The worst thing for me is that we had to pull this on our employees. Now there are 22 people out of work.”
Milbourn and Korich said they will regroup, settle the crisis and perhaps try again.
“I’m hoping we’ll be back soon,” Milbourn said.
“We’d like to (open another restaurant) in the future, and in West Sacramento,” Korich said.
To see the responses to their closure announcement on their Facebook page, click here.
Editor’s note: The day after this Appetizers post, we received an email from State Board of Equalization spokesperson Jaime Garza, who said “The Board of Equalization is ready and willing to work with taxpayers who might have trouble paying their tax or fee obligations. In fact, taxpayers can request a payment plan online from the BOE. ... BOE staff will contact taxpayers to work with them.”