Two of Seattle's best-known restaurants, Henry's Off Broadway and The Mirabeau, have closed recently in what may be a harbinger of a tough year ahead for downtown restaurants.
Henry's, which is on Capitol Hill, closed New Year's Day after the pre-Christmas snowstorm hurt business at a crucial time. Henry's went into Chapter 11 bankruptcy in August, and the current operators said the restaurant couldn't meet payroll after the snowstorm.
The Mirabeau, a downtown restaurant that opened in 1969, also closed on New Year's Day. Managing partner Tom Cosgrove said the snowstorm cut business 40 percent at a crucial time. He said he couldn't see anything coming in 1991 to change the fortunes of the restaurant.
Jack Gordon, executive vice president of the Restaurant Association of the State of Washington, said restaurants that don't have healthy cash reserves could be in trouble in the coming year.
``We've seen a tremendous growth in the number of restaurants in this area over the past couple of years,'' Gordon said. ``Undoubtedly, we're going to see a shakeout.''
Gordon said downtown restaurants may have a particularly difficult time surviving because of heavy traffic in the area.
Henry's, which opened in 1977, closed after struggling for several months to emerge from Chapter 11 bankruptcy reorganization.
Lynn Taylor, who bought the restaurant in August and took it into Chapter 11, said the snowstorm that hit the Seattle area before Christmas hurt business just as Henry's was struggling to stay afloat and pay bills.
Taylor was hired last summer to try to turn the restaurant around.
``Costs were too high, business was off,'' Taylor said. Business was on its way back when the snowstorm hit and ruined the Christmas season.
He said the biggest problem for the restaurant was servicing a $2 million debt on the restaurant and property.
David Orr, who was a host at Henry's before it closed, said he never received his last paycheck from the company for about $300. He said that other employees were not paid and that some who were paid had been given checks that bounced.
Taylor said today that all of the bounced checks have been covered. He said the restaurant is liquidating its wine and food inventories to obtain cash to pay employees. The restaurant employed about 40 people.
Cosgrove said The Mirabeau was hurt in the summer because The Goodwill Games encouraged people to stay away from downtown. He said the restaurant never recovered.