[schinde]

Well, here is the story, the painful experience of trying to make this entire venture work.

Owning OT's has been a long time desire of mine, all the way back to 1993, when Dee Pierce originally sold it, I was looking at it at that time and just had to have a heart attack, during my recovery period, John made the purchase and created the Tavern that I also had in mind.

When John placed the Tavern up for sale, I was not ready to take it on, and it was sold then to Tom. We know the end result of that.

So, I, my wife, daughter and son in law headed down the path of making our best effort to buy the Tavern from the bank and return it to the glory days of it's operation. Attended the auction, ended up being the only people at the foreclosure sale and ended up in negotiations to make the purchase. All the while with the economy headed into the tank. Conventional financing became impossible to get, the Small Business Administration backing became non-existent for a long time, and suffice it to say, other methods were attempted.

All during this time, my wife, daughter, son in law and many friends helped resurrect the Tavern from the sorry state it had lapsed into. Coolers needed repair, floors rotting, plumbing leaking, sinks leaking, roof leaks, the men's bathroom needing complete renovation, the area of the bar needing to be cleaned, the kitchen in need of serious attention, all items that the Ingham County Health Department said would need to be fixed before I had a prayer of getting a permit to swing open the doors. We worked endless hours and spent literally thousands of dollars in interior renovations required by the Health Department to bring things to a point where we could then pay the $1,238 fee for an operations license, again, all needed before I could even sell a soda pop, let alone beer, wine and liquor. The kitchen could wait until we could generate some revenue to obtain the money to make the repairs, the local store was willing to work with us to provide pizza, burgers, grinders and other food until we could get the kitchen operating. Needless to say, we spent a whole lot of money, and a ton of sweat equity, a lot of hope and a boatload of dreaming and planning to make it come to fruition.

An important part of this story is that under conventional business or SBA financing, I would also have had about $55,000 in startup capital, operational expenses and first year cushion. The business plan I had was conservative and ended up with me being able to make all bills, pay my employees, and allow Mary and I to work for free (of course). By year three, I would have been able to begin to bank some money to pay Mary and I back for our financial part of this deal, another expected part of opening a business. This conventional financing deal would have resulted in my owning the property, liquor license and also receiving the full benefits at taxation time of the above, and the rental income from the three apartments that are a part of the entire building. Alas, the economic collapse and tightening, or should I say, non available credit for any small business startup put that concept on hold.

Back to the bank. So, after all the above described work has been done, and the Tavern is now ready according to the Health Department, to open the doors. The bank made an attempt to work with me under the following conditions.

I would pay them a lease payment for the bar portion of the property, assume property taxes, necessary insurances, etc., and also pay the bank and the holder of the liquor license a grand total of 25% of gross profits on a monthly basis. Again, important, 20% of gross to the bank, 5% to the holder of the license (currently in receivership) and a monthly lease payment, all before I even began to pay employees, keep stock, make normal repairs, pay business taxes, workers comp, unemployment insurance, music licensing, Health Department permit fees, advertising costs, entertainment (band) costs, and the many, many other myriad things that operating a tavern require. Again, I would be operating with only 75% of gross, not net, but gross, profits. By the time I would be finished at month's end, there would be no net margin profit, no money to put back into the business, and nothing to make any improvements or plan and or put on special events necessary to bring the Tavern back to the glory that it once had. Even at that, even at that........ Mary, myself, Rhia and Matt Jr. (as we affectionately call our son in law) were still willing to give it a shot, provided I could do so under an operating LLC, (Limited Liability Corporation), so, if the above described operating agreement proved fatal, (which my business plans showed it would) at the very least, I would not lose everything I had worked for since I was eighteen. Which meant I would still have spent a lot of money and worked many hours for free, I nonetheless would have given it my best shot, as would have my family. But rolling the dice as they were loaded without the personal protection of being able to do so under an LLC was worse than pointing a shotgun under my chin with a toe on the trigger. Financial suicide, and a completely irresponsible and reckless act on my part that would hurt my family.

Under the LLC scenario, if I had opened the bar and eventually it failed after the first year or so, the bank still would have ended up with the 20% of the gross profits, the lease payment, and had most all of the other costs of the property covered, along with taking the rental from the three apartments. In essence, they would have made money from me anyway, and more than they will make from me now. The position the bank put me into was unworkable, and as a result, the negotiations for our ownership are now over, and Schinde's OT, a bar for bikers and racers owned by a lifetime biker and current racer, will not exist. All of our work, effort, money and a lot of everyone else's hopes, have been dashed.

Do I feel badly. Yes. Does my wife Mary and my daughter Rhiannon and my son in law Matt Jr., feel badly. Yes. We feel as if we have let everyone down that was counting on this coming together. Some of you have been inside and seen the changes, the improvements, the effort, the toil, and have made plans that will have to be changed. For that we are truly sorry.

The corporate world knows no bounds when money is at stake, and as such we have become victims of that. The worst part of this all is that I have now found out that there is someone ready to step in and pick up on all of our work, sweat, blood and money, and give it their best shot. So, the good is, maybe OT's will be open after all for everyone anyway. The bad is, we did the work, and will not reap the benefits.

Anyway, that is the story, the unvarnished truth and the reality. The Schinde's OT Myspace site will be open for a few more weeks to get the message out, and then this too, shall become no more than dust in the wind, as we all eventually shall be.

With hopes we will see all on the road,

have a good day,

schinde, (Matt) Mary, Rhiannon and Matt Jr
_________________
Short track racing is more fun than a human being ought to be allowed to have!

[goinincircles22]

Sorry to hear this Matt, I was looking forward to coming there, but at least you gave it your best shot.

John