City officials are going to court to shut down a financially troubled waterfront nightspot, claiming the owner has ignored provisions in a 13-year-old special use permit.
Since 2000, when Bill Melkesetian opened the Mexican-themed restaurant and bar on the Strand, Rosita’s has been an anchor of the city’s revitalized waterfront nightlife district. But the restaurant has since fallen on hard times. In April 2011 with the mortgage $715,000 in arrears, Ulster Savings Bank initiated a foreclosure action. In May 2012, a judge granted the bank’s request. By July, three years after, court papers allege, the restaurant made its last mortgage payment, the stage was set for a foreclosure sale. But the sale was postponed as Melkesetian returned to court to argue that informal negotiations with the bank regarding his efforts to find a buyer for the property — the Hudson River Sloop Clearwater had expressed interest in the site for its new winter home, but the deal fell through — constituted an agreement to forestall the auction. Finally, in November the court ruled against Melkesetian and once again scheduled a foreclosure auction for Dec. 18.
One month later, however, Rosita’s remains unsold and open for business. City of Kingston Corporation Counsel Andrew Zweben said the property is sheltered by a Chapter 11 bankruptcy filing. Melkesetian, in an e-mail claimed that “Rosita’s has not petitioned for any Chapter 11 proceedings.”
That may not matter, however, if the city is successful in its bid to shut down the eatery based on what Zweben said was a long-ignored provision contained in a special use permit. The clause in question requires the restaurant to provide uninterrupted pedestrian access to the Rondout Creek waterfront by means of a walkway or other clear path. Instead, Zweben said, the restaurant’s creekside frontage became an outdoor dining area where strollers would have to pass through two rows of tables and could only see the creek “looking over somebody’s lunch.”
On Dec. 4, the city filed suit in state Supreme Court seeking to shut down the business based on the ongoing violation. According to Zweben, the closure followed months of warnings, a $1,000 fine levied on the restaurant in August and a remediation plan offered by Melkesetian that the city deemed inadequate.
“The bottom line is, he should not be open,” said Zweben. “When he came before the planning board with a plan that did not address any of the issues, it became clear that he had zero intention of complying with the law.”
While the city corporation counsel’s office attempts to shutter Rosita’s, The Kingston Local Development Corporation, a quasi-governmental agency loan provider headquartered at the city’s Community Development Office is hoping to recoup at least some of roughly $408,000 owed by Rosita’s corporate owner Melke Land Corporation LLC. The total is split among four separate loans dating back to 2001 and 2002. The last payment made on any of the loans, according to KLDC officials, came in May 2008. The KLDC in its role as a “lender of last resort” typically assumes a subordinate position to banks or other lenders in cases where a business is funded through a mix of sources. As a result, city officials said, KLDC cannot recoup anything until Ulster Savings Bank is made whole. Melkesetian did not respond to requests for comment other than to deny that the restaurant had sought bankruptcy protection.
Slideshow image: Rosita’s. (Photo by Dan Barton)
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