Crash And Burn
By Rick Boettger
I’m helping a couple of friends put together a roughly $2 million complicated real estate/business deal. They are both smart and already successful, and they’ve got me as their consigliere, so I wouldn’t bet against them. But a couple of spectacular failures I read about recently must give anyone pause on how hard it is to make money on restaurants and real estate in Key West.
The real eye-catcher was the quick demise of the restaurant that replaced the locally-beloved Finnegan’s Wake on Grinnell. Opening as Backspace on February 24, it closed for good in mid-June. Under four months! Less time than they spent renovating it.
To appreciate the drama, read the 109 posts on a TripAdvisor thread you can easily Google. My belief from reading the postings is that if anybody deserved to go bust, this owner did. The allegations I believe are:
- He fired the popular chef after working him like a dog until the last minute, also giving no notice to the other staff.
- He appropriated all of the positive comments about Finnegan’s Wake from their Facebook page, even about food he wouldn’t be serving.
- On the other hand, he deleted negative comments from the Facebook page, and answered criticism on TripAdvisor by calling his critics “idiots” who wanted the “cheap food and filthy kitchen” of the old Finnegan’s.
- Charged A-restaurant prices for B-restaurant food.
- Got frozen fish from Sysco.
The guy was not nuts. He runs the same restaurant in New Orleans successfully, and the typewriter theme here he tied to Hemingway. But when you serve your Hemingway sandwich as a Cuban on French bread, fire the chef badly, diss all the locals, and don’t provide anything new, you’re toast in this tough restaurant town.
Friends of mine poured their heart and soul into the restaurant at the Blue Lagoon for 2 ½ years and went bust. That broke my heart. They worked hard for locals’ business, had some original food, and interesting local music, but bought in at the start of the recession, and sometimes what the world does matters, and your own fate is sealed. Them I felt sorry for. The Backspace owner, no.
A recent sale of one of the Seaside condos on South Roosevelt led me on a merry jaunt through the Clerk’s website. A northerner named Robert Butler, no relation to our locally renowned Bobby Butlers, developed the four-story sea view residences, but ended up having seven loans foreclosed for a loss of $12.5 million to the banks—sadly, two of them to my beloved Keys Federal Credit Union (maybe that’s why they sold my own 3.875% refi with them to Flagstar right after I closed with KFCU—they felt snake bit).
This guy didn’t do anything weird. Made interesting condos with covered parking, elevators, high views over the mangroves, fine amenities. Unfortunately, he bought in and built a couple of years too late. If he’d been able to sell them at $2 million each, which could have happened in the wild days of 2006, he’d have made a fortune. But he was a year late and it turns out $12.5 million short.
Some savvy investors lost money in the crash, but they were way ahead. The best one I could find was a guy who flew helicopters in Hawaii, came here in the early 2000’s, and turned over properties to make $10 million by 2007. He was left $1 million underwater on the properties he was holding at that time, but still had $9 million in the bank. We can say the same about the three biggest, smartest landowners in Key West, named Swift, Spottswood, and Knight, who all took a thrashing in the crash. But they were zillions ahead before and have largely recovered already.
Makes me very humble about my own real estate luck. And very careful about my friends’ complicated business venture. You’ve got to respect anyone who’s made it big in this town. We are basically a place to spend money you made somewhere else. Next time you see one of the winners, salute anyone you know who’s managed to beat the odds in Key West.
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yet another exhibition of bombastic tripe fueled by an ego that seemingly knows no limits. just what is this article about? trashing a failed restauranteur from a hack “Investigative reporter” so maladroit libel is substituted for fact? or your own greatness as a consigliere immune to the failures of others and certain to reign success for your friends due to the magnificence of you and your financial acumen and genius?
c’mon Shaquille, stick a pin in it; your exploits fail to impress, your braggadocio defines you as the insecure grifter that you are, and your prose is a flat as your singing.
other than that, really enjoyed the article…
I do not know who KEYSBUM is, But I know what he is. An idiot that is also a coward. Of course, I would not put my name on that rambling mess either. I do not even know what they are upset about?
The only part of the article I know anything about is The Seaside project. As far as I can tell, Mr. Butler should have had some money hidden away somewhere. He developed that whole area and surely made a few dollars on them.
As for all the units that were caught up in the Real Estate crash, they were all sold for very nice prices, prior to the crash. Some even had second mortgages on them. The problem was that they were sold to Investors/Speculators operating under the name of Keys Property, LLC, a Virginia Corporation headed up by attorney, Paul Waldron – Waldron & Cassellman. Mr. Butler was apparently paid for all the units. The banks were the ones that lost money on the units.
it took you that long to find someone to stick up for you shaquille? I guess that’s understandable.
next time tho, get someone who at least finished high school. you’re a minimal challenge, this guy doesn’t even rate a response.
Congratulations Rick! You appear to have rooted out the true identity of KeysBum. He writes in the same style and with the same flattering commentary as the owners of Backspace. A coincidence? Let’s all hope and pray that he leaves town with them.
another Shaquille stooge… didn’t know you had that many people on your payroll. because i have to write down when interacting with cognitive midgets such as yourself, i will let this be the last word on this useless article. thinking in the monosyllabic syntax necessary to reach you is tiresome. and boring…. much like you.
lol One of you gentlemen is as eloquent as Donald Trump, all crass and no class. I won’t say which one but I’ll make a prediction that he’ll be the next one to post to this “discussion.” Like Trump, he’ll not be able to resist defending his own ego. Keep making a jackass out of yourself, my friend. Perhaps The Donald will choose you as his running mate!