comments

RCDC comes into focus in light of developer’s disappearance

Innova issued notice of default on loan from Roseville Community Development Corporation
By: Sena Christian, Staff Reporter
-A +A

The disappearance of Roseville developer Steve Pease — last seen Nov. 2 in Fort Bragg — has led to speculation over the financial status of his most publicly prominent business, Sammy’s Rockin’ Island Bar and Grill, which closed more than a week ago.

The partner in that business, Jon Yip, has kept mum as the speculation and concerns over Pease’s whereabouts have grown. Pease’s friends and family now fear the worst, especially considering his rental car has not been found. 

A public records request by the Press Tribune has led to the discovery that Pease, 57, and Yip are behind at least $9,100 on their repayments toward a $1.5 million loan from the nonprofit, private Roseville Community Development Corporation.

“One loan payment is generally not a significant concern … but with the mystery around it with the owner not being accounted for (our attorney) delivered a notice of default,” said RCDC Chairman Howard Rudd.

That notice was issued Thursday, Nov. 14.

“The next step after that remains to be seen,” Rudd said.

The first repayment was made, but the October payment is past due. The November payment also not been made. But Rudd emphasized that the RCDC does not think Pease stole any money.

“He didn’t leave town with a bag of money from the RCDC,” Rudd said.

The $1.5 million loan was dispersed in the form of 19 progress payments, which means once work was completed, the RCDC paid Pease and Yip’s company, Innova Restaurant Concepts, for that work.

“The No. 1 (question) is where is Steve? Is he OK or not? And with that we’re trying to balance that business decision,” said RCDC board member John Norman.

Yip may have closed the restaurant on Nov. 10 in part because of the terms of a licensing agreement with eatery namesake Sammy Hagar, which specified that should either Pease or Yip become disabled, die, divorce or otherwise need to sell their ownership interest, the license contains no provision to allow the restaurant to continue operating.

In some ways, much of the RCDC’s and city of Roseville’s hopes and dreams for downtown redevelopment have been hung on the shoulders of Pease. The corporation is now in wait-and-see mode to determine how exactly it will proceed. 

“We were as surprised as everyone else,” Norman said, of Sammy’s sudden closure.

The Press Tribune has been unable to make contact with Yip. The Los Angeles-based media contact for Hagar has not returned emails seeking additional information. 

Development Corporation up-close

Three years ago, before Gov. Jerry Brown successfully eliminated redevelopment agencies throughout the state of California, the city of Roseville took a bold step in an attempt to ensure its investments into redeveloping downtown did not get thrown out with the bath water.

With a unanimous approval by the Roseville City Council and a hefty $5 million loan not to be repaid for 30 years, the city formed the RCDC. City council members at the time lauded the formation of this public-private entity as showing foresight.

The council appointed the RCDC’s board of community members, primarily business leaders, and at the corporation’s helm as chief executive officer sits a top-level city administrator — first recently retired Assistant City Manager John Sprague and now the city’s Economic Development Director Chris Robles.

The RCDC used much of its start-up loan of public money to buy properties on Vernon Street, as well as to loan $1.5 million to Innova for improvement projects to get Sammy's ready to open for business, which it did in September 2012.

The RCDC bought the vacant building at 240 Vernon St. for $603,000 in 2011 and then entered into a project development and management agreement with Barbieri Properties — another Pease compnay. In October, the Monk’s Cellar Brewery and Pub signed a lease to operate in the space and it’s expected to open early next year.

"I am hoping he is just on a mental holiday and will show up soon ready to get back to being the great steward of downtown he was," said Monk's CEO Andy Klein. “His disappearance will not have any impact on us. I am not concerned about the closing of Sammy’s. In any situation where there is an effort to revitalize an area, the more options for people the better. Clearly Sammy’s was a key player in the efforts to bring more people downtown. At this point, I can only believe they are sincere in their hopes of serving the community once again. But, if that doesn't happen, I am sure there is already a list of restaurants that would like to slip right in to that spot.”

The corporation purchased the property at 242-246 Vernon St. for $537,500, and subsequently entered into an agreement for the project development and management with Barbieri Properties.

“(Pease has) been the only one to step up to take the risk downtown,” Rudd said. “He’s been a real key."

Rudd said as long as the tenants of those buildings are paying their rent then the RCDC has no reason to be concerned about their status.

"I hope Steve Pease is safe," said Councilwoman Pauline Roccucci on Tuesday. "My vision when I voted for the RCDC was that we had worked with redevelopment on streetscape, the electrical, the water lines for a really nice set-up to go forward. My vision was to help all the small businesses."

Roccucci said other businesses on Vernon Street are doing well, and the city has hired a master developer to flesh out a master plan for the downtown district. She didn't express concern that Pease's disappearance spells the end of revitalization.

"All this is starting to work together," she said.

Not the first time

The sudden closure of Sammy’s Rockin’ Island Bar and Grill in Roseville isn’t the first time an eatery associated with Sammy Hagar has shuttered its doors under troublesome circumstances.

Another eatery licensed with Hagar’s name, the Cabo Wabo Cantina in Fresno, closed down in 2008 after only a few months when Hagar’s company Red Head Inc. severed ties with the restaurant’s owner, developer Milt Barbis, according to news reports. In 2009, Red Head Inc. filed a lawsuit against Barbis, claiming mismanagement. They reached a confidential settlement.

Barbis later sued Red Head Inc. for $10 million, claiming breach of contract and emotional distress, according to news reports. He also alleged Hagar left an angry voice mail and threatened to hire a hit man to resolve their dispute. A U.S. district judge found there was no merit to these claims, according to Courthouse News Service.