Gringo Star Street Bar abruptly closed–reportedly sold
Investors left in the dark regarding Gringo Star Street Bar closure
Investors of a popular Tempe, Arizona bar were taken by surprise when they learned via a Facebook post that the Gringo Star Street Bar on Mill Avenue had locked the doors for good.
“I had no idea it closed,” said a Tempe resident, who had invested in the establishment. His sentiment was echoed by other investors, who wished to remain anonymous for fear of financial retribution. The surprise was not that the establishment had closed, but that shareholders had learned of the closure on social media and not from the owner or managing partners.
“There was no communication,” said an investor who trusted his money with Gringo Star Street Bar owner Julian Wright. “I found out Gringo Star closed when I saw it on Facebook.” The shareholder noted that there had been “street talk” that business was faltering and that it was apparent the bar was not doing well, however, he was “left in the dark.”
Unbeknown to shareholders, the bar was sold, according to Hartley Rodie, Gringo Star Street Bar managing partner.
“We sold the bar,” Rodie wrote in response to a request for information. “The group that purchased it will be starting construction immediately and opening a different concept in the coming months.
Bodie didn’t elaborate as to who purchased the facility and what it will become.
As reported January 20, a post on the bar’s Facebook page alerted customers to the closing. There was no explanation given and numerous questions from patrons were left unanswered.
The bar opened in 2013, offering arcade games, food, drinks, dancing and street art. The 6,500 square foot bar on the corner of 5th Street and Mill Avenue was once home to the Library Bar and Grill, another of Wright’s bar/restaurants. Gringo Star’s opening was highly anticipated from both a consumer and investor standpoint.
Shareholders said when the bar first opened, it appeared to be a sound investment. They said they did see a return on the funds they entrusted with Wright.
But after a couple years, they said things started going south. They no longer received dividends and Wright was difficult to reach. They allege when they asked questions about their investment or the financial health of the Gringo Star Street Bar, they were either ignored or not given an answer. When they did receive an answer, they allege it wasn’t a favorable one. In fact, two investors said Wright would answer with a “F**k you” if he didn’t like what was being asked of him. Veritas News was provided with a string of text messages allegedly between a shareholder and Wright that does show crude language. Wright was unavailable for comment.
Lack of notification irks shareholders
Several shareholders said while they knew the bar was not doing well, they expected Wright would keep them updated as it its financial health.
That didn’t happen, they allege, and it wasn’t until they saw a Jan 19 post on the bar’s Facebook page that they were notified of the closing.
“It’s been real and it’s been fun but now it’s time to go. We know many of you have had some of your wildest nights at our lovely bar and we are glad we were able to be part of it ❤ It’s been a great ride! Peace out ✌🏽Thanks for the memories!” the announcement stated. There was no other information provided.
“I first heard of the closing on Facebook,” said an investor who had signed on to his account Jan. 20 and saw the announcement as he perused his newsfeed. “I received nothing from Julian.”
Wright did notify investors, but not until Jan. 24, and not until after an investor contacted him wanting to know the status.
It looks like we’ve finally closed a deal to sell Gringo Star. We haven’t received funds yet but it’s looking good. In anticipation of the sale closing we closed the business as well last week. It’s been losing money and staff at a rapid rate so wasn’t worth keeping open even through the weekend.
The sale price was $300,000 and included all FF&E, liquor license and inventory. Quite frankly we were lucky to get that. They probably could have bled us out and gotten it for half that. Especially since the last $300,000 deal we had in escrow fell out the day before we were supposed to close (in October.)
It will take us 45-60 days to reconcile as we have to await final statements from all vendors and make sure everything is paid off before making final distributions. The deal was an all cash offer so at least there was no carry back.
I could only guess at what the final amount will be as I don’t have all the financial info but I do know I’ve personally put in at least $60,000 in the last six months to keep the doors open and the staff paid and we had to pay $56,000 at closing to get caught up on rent, and that was after applying our $17,000 rent deposit.
More questions than answers
The message from Wright left several shareholders with more questions than answers.
“The new owner is doing construction and Wright doesn’t even have the money? That’s taking a risk,” an investor noted, adding that he believes Gringo Star closed due to mismanagement, hence, selling without having cash in hand was not a surprise.
“There were too many comps and the place wasn’t kept up,” another investor said.
Gringo Star Street Bar’s Jan. through Oct. 2017 profit and loss statement indicates the establishment took a negative 37 percent change in sales. The 2016 profit and loss statement also indicates a loss of revenue.
The bar is situated in the Mill Avenue District, a popular downtown strip located near Arizona State University. Arizona Leisure’s website states, “Without a doubt, Tempe’s Mill Avenue District is the hottest entertainment center in Arizona. It is the hot spot in the Valley of the Sun Phoenix area with the highest concentration of restaurants, cafes, microbreweries, sports bars, unique shopping and nightlife than any other place in the Metro area.”
The location of the bar and its proximity to the university leaves one investor baffled as to Gringo Star’s demise.
“It’s a popular area and a college hangout,” the shareholder noted. “I thought it would be a good investment. Lots of foot traffic.”
College students and foot traffic weren’t enough to keep Gringo Star out of the red, according to another shareholder. “It was mismanaged. They were giving out too many comps and not watching the bottom line.”
What will happen next, the shareholders said they aren’t sure. Those interviewed said they hope to receive some money from the sale, however, noted they won’t be surprised if they don’t.
“We probably won’t see a nickel. I’ll be surprised if we do,” said one investor. “And letting the new owner start construction before money has exchange hands is a risk, and it could be a liability to all of us. Anything could happen.”
Photo credit: Kelly LittleJohn for [email protected]