Sea Galley Founder Target Of Complaints

Some Sea Galley stockholders may call for the resignation of a key board member following an annual meeting yesterday that failed to dispel anxieties over the future of the Washington-based chain of seafood restaurants and hardware stores.

Steve Chess, a Sea Galley stockholder and analyst for National Securities, a Seattle-based brokerage, and about 100 others were vocal about their anger over former president and chairman Steven Dowen retaining his position on the board.

Chess said he expects a change on the board during the next few months.

``I think the shareholders need to make a lot of noise about removing Dowen from the board. If the company doesn't listen, then that could invite a proxy fight,'' Chess said. Sea Galley has approximately 1,700 shareholders.

Under Dowen's tenure at the company, its stock price has plummeted and the company last year lost nearly $7 million.

Dowen said after the meeting he would be willing to resign if asked by someone other than shareholders. ``I would if Kim Kreig asked, for instance. He's the one calling the shots.''

Dowen was replaced in March by Kreig, a former Denver restaurant consultant. Dowen became president of American Ranch & Home, a subsidiary with three hardware stores in Washington.

Kreig said he would like to see Dowen remain with the hardware stores because they seem promising. First-quarter 1990 sales were up 30 percent, but Kreig said those did not translate into profits because the stores are still in the start-up phase.

He tried to offset the shareholders' discontent by saying his emotional response had also been to fire Dowen. ``But the business response is to keep him on. We have an employee contract with him and he knows more about Sea Galley than anyone in this room.''

Dowen started Sea Galley in 1972 with one restaurant in Port Townsend. The company went public in 1980 and he became chairman. Since then, its stock price has gone from a high of $17.875 in 1981 to its present price of 62.5 cents.

In 1989, the company lost $6.8 million. Krieg said he does not expect Sea Galley to be profitable in 1990.

One shareholder said he had doubts about the need for Dowen's expertise. ``He's made bad judgments in the past. Are you going to let him continue making these same mistakes?'' Jim Loucks asked.

But Dowen's contract, which is being renegotiated, has a provision calling for an annual salary of $240,000 plus another 25 percent of that amount to be paid for two years should he leave Sea Galley.

Tye Minckler, a Sea Galley representative, would not say whether the same terms would be

in the renegotiated contract.

The controversy over Dowen's continued involvement in the company overshadowed Kreig's presentation. Through a slide demonstration, he tried to remove himself from Sea Galley's past.

Kreig referred to the company as the ``Northwest's new Sea Galley'' and, while admitting to past mistakes, tried to show how he could make Sea Galley profitable.

Remodeling is being considered in some of the 14 remaining Washington restaurants and the three in Arizona, Alaska and Idaho. Kreig said he also wants to sell restaurants in Pocatello, Idaho, and Des Moines, Iowa, as soon as possible. Krieg said he plans to introduce a healthier, lighter menu with more variety.