After news broke Monday that a missing Roseville restaurateur was in default on a $1.5 million loan from a city nonprofit, a friend of the eatery owner scoffed at the notion that Steve Pease would disappear over a $9,000 monthly payment.
“Steve is not going to leave town (over) $9,000,” said Chris Maudru, who has been leading the effort to locate the primary owner of Sammy’s Rockin’ Island Bar & Grill. “Some people have speculated that he took the money and ran ... he would have been taking his own money. That just doesn’t make sense.”
The Roseville Community Development Corporation announced Monday that Pease was in default on the loan the agency had granted him to help kick-start his Sammy Hagar-themed restaurant a little more than a year ago on Vernon Street.
Pease, 57, was last seen Nov. 3 when he checked out of a Fort Bragg motel and drove off in a rental car. With Pease gone, the restaurant – a key component in efforts to revitalize Roseville’s downtown – closed its doors Nov. 10. Maudru said efforts over the weekend to find Pease were unsuccessful.
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“The closure of the restaurant is particularly disconcerting, as it coincides with the announcement of the disappearance of Steve Pease. Steve has been an active member of the community and a pioneer in downtown development,” the Roseville Community Development Corporation said in a statement.
“While media and public interest were high due to the disappearance of one of the owners, the RCDC staff and legal counsel were exploring next steps regarding the protection of RCDC interests and ability to reopen the restaurant,” the statement reads.
On Feb. 22, 2012, the RCDC finalized an agreement to lend Pease’s company $1,512,500, made in 19 payments, to assist in capital improvements needed to open a major restaurant and entertainment venue at 238 Vernon St. Sammy’s Rockin’ Island Bar & Grill opened in September 2012 with much fanfare, including a visit from the rock musician behind the bar’s name.
In September of this year, the business made its first payment of $9,165.45, but it did not make the payment due Oct. 22, said Howard Rudd, the chairman of the development corporation board.
“A notice of default was delivered on Thursday, Nov. 14, to Innova (Pease’s company) alerting them of the late payment and providing the contractually mandated opportunity to cure the deficiency,” the RCDC release said.
Rudd said his group had no advance notice that the business would miss the payment.
“There wasn’t any indication he was struggling. There were a lot of people that were in and out of the restaurant,” Rudd said. He said missing a payment was not the end of the world, but in that scenario, most people would reach out in an attempt to change the terms of the loan or get an extension.
Maudru said Pease had at least five businesses and plenty of assets, including his home, which was recently placed on the market, and a $70,000 Rolls Royce still in the garage.
“Being late on a payment of that amount is not insurmountable,” Maudru said. “Whatever stress was there, it was not financial.”
Pease spoke of “clearing his head” when he phoned his ex-wife from Las Vegas on Oct. 28.
Leaving town out of money woes doesn’t sound like Pease, said Roseville Mayor Susan Rohan, who is in England on a city-related trip. “This is extremely hard to imagine. The person I know is much more of a fighter and far more resilient than that.”
Officials said they are now focused on pursuing options to reopen the restaurant. Pease’s business partner Jon Yip has not spoken to the media or the development corporation since Pease’s disappearance.
The RCDC was formed in 2010 with a $5 million loan from the city. The five-member community board was tasked with using the funds for “property acquisitions, business loans in the larger Downtown Roseville area and formation/operations costs.”
The nonprofit holds several other adjacent properties that have tenants in the process of opening businesses, and Pease was involved in inking those deals. The development corporation also is heavily involved in marketing the city and creating a business improvement district.
While city officials and the development corporation say their goal is to see the restaurant quickly reopen, untangling the property ownership in Pease’s absence could take months, some experts said. Officials said the loan-financed improvements to the property won’t be lost, even if the restaurant has to change hands to reopen.
Rudd said long term he’s not worried about recouping the investment. But questions remain over how long the investment will be inactive with the restaurant closed.
Dissolving a partnership – even when both parties are present – takes time, said Brian Slocum, who teaches at McGeorge School of Law. The quickest route would be to identify someone within the business who has the authority to act in Pease’s absence. Given the fact that Yip could not keep the doors open with Pease gone, that’s a less likely scenario.
“It sounds like you are going to have a typical foreclosure process to go through,” said Val Toppenberg, a real estate consultant who previously ran the city of West Sacramento’s redevelopment agency.
“I don’t think it’s going to be weeks. It’s going to be a few months,” Toppenberg said. “This is very unfortunate for the economic development needs of Roseville.”