City of Antioch vs. Humphrey’s – A Whale of a Tale of Competition and Inconsistent Treatment

– Analysis –

By Allen Payton, Publisher

Humphrey the whale would be shedding a tear if he knew what was happening to his namesake restaurant in Antioch.

Humphrey’s on the Delta restaurant has been in the news, lately, due to some back rent owed to the city of a little over $48,000, because the city owns the land upon which the restaurant sits, as well as the filing of Chapter 11 bankruptcy in order to reorganize their finances, to avoid foreclosure and remain in business.

Let me first state, Humphrey’s is still open and in business, and owner Eva Romero and her new partner Samir Rohayem plan to keep it that way.

But the question is how did Humphrey’s get here? Well that’s the whale of a true tale of competition and inconsistent and unfair treatment by the City of Antioch, over the past 10 years.

A little understanding, first. The city has an incentive to make sure Humphrey’s is successful. Why? Because their rent is based upon a flat rate or a percent of gross sales, whichever is greater. So the more business Humphrey’s does over a certain amount, the more money paid to the city.

Let’s go back to 2001 when the City Council chose to go into direct competition with Humphrey’s, when they approved construction of the Lone Tree Golf & Event Center’s new banquet facility.

Up until that point, Humphrey’s was the only place in town where you could hold a seated event for up to 300 people.

The Lone Tree facility was originally planned to be a 150-seat banquet hall at a cost of $3.6 million. Instead, the City Council at the urging of then Mayor Don Freitas, approved a 300-seat, $4.8 million facility. Then with construction cost overruns of $900,000 that figure increased to $5.7 million.

The city loaned that $900,000 to the golf course, but the first payment of $48,379 wasn’t required until this year.

Once the new facility was open at Lone Tree, city, Chamber of Commerce and other events started being held, there instead of at Humphrey’s where they all had been held in the past.

Then the city chose to go into the restaurant business, again. This time with the Downtown Restaurant Incentive Program, in which they had $500,000 in redevelopment money to give to two restaurants.

They ended up granting $300,000 to help Bases Loaded open on G Street, which offered a full bar, food and live musical entertainment, just like Humphrey’s does. Now they’re struggling to stay alive, too.

At the time I argued that whatever the city did for a new business, they need to offer an equal benefit to existing businesses that the new one would compete with.

Instead, the city spent $20,000 on a consultant for Humphrey’s who told them three things, two of which they did: 1. change the staff uniforms, 2. make changes to the menu, and 3. spend $500,000 to $750,000 to fix up the place. The Romero family didn’t have that kind of money for improvements.

All they asked from the city was a new sign at the end of L Street at 2nd Street so people would know that Humphrey’s was there, since the trees in the marina parking lot had all grown up and now block the view of the sign on the front of the restaurant.

Then along came the new Antioch Community Center at Prewett Park which can also hold sit-down, catered banquet events for 220 people in one room and as many as 1,000 in the gymnasium. So, not only was the City competing with Humphrey’s, again, they’re now in competition with Lone Tree – which is owned by the city but operated by a nonprofit board of directors.

City staff recognized that, in their report to the City Council on February 10, this year, when they pointed out the challenges facing Lone Tree – “loan debt, downturn in the economy, creating a larger event center facility desired by the community leaders, the new Antioch Community Center.”

In that same report, staff pointed out that Lone Tree was in arrears almost $542,000 in payments on the loan for construction of the facility.

I don’t fault the golf course board. It was the Council at that time that strapped the board with a much larger debt than was planned or manageable.

But if they can’t make their loan payments, the city’s General Fund – which pays for police – has to pick up those costs.

Fortunately, according to one board member, they have made all the payments required by the city, this year. That included a $281,000 loan payment reducing the amount in arrears to about $260,000 and a $74,055 payment on the loan for the parking lot improvement, reducing that balance to either $74,055 or $148,110.

However, that doesn’t include the approximate $850,000 remaining from the loan for construction cost overruns.

The Prewett Park Fund, for both the new Community Center and Antioch Water Park, received a subsidy of almost $300,000 in this past year’s budget from the city’s General Fund. So that tells me unfortunately, they’re not making it on their own, either.

So now there are three facilities competing for the same banquet room rental business – which needless to say has dropped off dramatically since 2008 – and two of them are owned by the city, and all are struggling. One council member said the city now rotates events among the three.

Another shot from the city was the replacement of the Marina Park with the new Boat Launch Facility. Why? Because people would use the park for weddings then have their receptions at Humphrey’s, afterwards.

Finally, the latest shot was when the Council voted against changing the name of L Street to Marina Way or Parkway, as has been in the city’s Economic Plan since 1996. Humphrey’s address would have been 1 Marina Way or Parkway. The signs on the freeway would have provided permanent marketing for the waterfront and the road. Currently Humphrey’s address is 1 Marina Plaza, but there are no signs with that name on it and is confusing.

Yet the city is coming down hard on a 70-something, Hispanic female and longtime Antioch business owner and resident, over $48,000 in back rent.

Eva Romero attempted to sell the business two years ago, but she claims when the managing partner of the LLC defaulted on payments, she had to take the restaurant back.

She really doesn’t want to be in the restaurant business any more. She wants to retire.

One council member said it was because Romero filed for bankruptcy protection, the city was done dealing with her. They’ll be happy to negotiate with a new owner on the back rent. But not with Romero, because he doesn’t believe they can due to Humphrey’s being in bankruptcy.

Something smells about this entire situation, and it’s not from the fresh fish served at Humphrey’s or from a whale.

The City Council needs to work with Romero and her new partner, and let Humphrey’s deal with their creditors and stay alive until they can find a new buyer. It’s only fair after all the competition the city created for them.

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6 Comments to “City of Antioch vs. Humphrey’s – A Whale of a Tale of Competition and Inconsistent Treatment”

  1. Skip says:

    Sure wish I could get some of this free money paid for by Antioch taxpayers. I guess this article helps to explain why the rents downtown are still so high even though there are plenty of vacancies. Apparently, I need to get more buddy buddy if I want to move my business downtown and start generating tax revenue for the city. While this is an interesting history lesson, I’ve got to disagree with your conclusion. The bottom line is that Humphrey’s owes back rent. The city didn’t force them to rent the location. At anytime they could have shut down the business and left if it wasn’t profitable. If the city were to ignore Humphrey’s responsibilities just because they’ve been there a long time would be unfair to every other restaurant in the city. If anything, this story should be a lesson in why the government shouldn’t even be involved in things like this. The loans to the golf course, the corrupt gift to Bases Loaded and even their misguided community center are all things that should have been left to private businesses. Consistent or not, people need to be responsible for their own actions. If the council “works” with Romero and her partner it will send the wrong message to those of us who work hard and play by the rules. It was bad enough that we wasted $20,000 to hire a questionable consultant, lets not compound our mistakes more by letting some businesses get away with not paying rent while the rest of us pay higher rents because of subsidies just like this.

    • Daniel Lopez says:

      Sad part is City of Antioch only solution is to sink one business o make another work. The problem with the City of Antioch is that Government is just that, no experience in running businesses, if they did they wouldn’t be running for City Council seat, not now.

  2. Jim Marchetti says:

    Well, this is a messy situation, and as usual, when a government goes into “business” it always causes trouble. Because the Lone Tree situation is their own doing, they seem to give “grace” unto themselves. If the figures are right “staff pointed out that Lone Tree was in arrears almost $542,000 in payments” then the golf course/events center owes 10 times as much as Eva does. So, exactly how does the city go about “paying itself back”?

    Dumping $300,000 into the water park and community center is shocking to me. When at a time in our city’s history where we have cut staff to the bone, have an auto dealership owner giving $100,000 to help keep the city from whacking any more officers, it just makes no sense to me.

    The things that should happen are:
    1. they should work with Eva – in helping her find a buyer for the restaurant.

    2. Stop dumping money into the water park – it is a HUGE waste of city money that should be redirected to what they are COMMITTED to providing. POLICE SERVICES. Look at the original city charter – police and fire services. Fire services are now covered by the County, so all they really need to provide as a SERVICES is POLICE.

    3. Put the golf course, restaurant up for sale – it’s that simple.

    The city is NOT a business, never should be one. It is bad decisions for decades that have contributed to this mess. Those who thought it was a good idea to build the gold course and restaurant were wrong. Those who thought it was a good idea to build the water park were wrong. Those who are now harassing Eva are wrong. Look in the mirror folks. YOU ARE ACCOUNTABLE TO US. I would like to know how you plan to unwind the mess with the golf course and the Prewett facilities.

    Until the city council gets their proverbial heads out of their rear orifice, this city will continue to sink, sink, sink…

    It’s a crying shame…

  3. Daniel Lopez says:

    City of Antioch Leader’s need to be STOPPED, and REPLACED by smart business people. Antioch Ca created a huge crater that will end up eating them up, housing and business out of control. What beats me is that this same “Leaders” are asking for re-election, no shame whatsoever. The problem is that they have nothing to loose, we homeowners, business owners, we loose, big, we are here for the long haul, while these clowns are there playing games for a short period of time. No you cannot blame the population most of which not vote at all. Elections are now part of the problem. Folks elected with 2m votes, when they have over 60m residents. OUT OF CONTROL GOVERNMENT.

  4. Crystal Stahl says:

    I love receiving the Antioch Herald and reading about all the latest news in Antioch. The latest issue contained an article about Humphrey’s that has prompted me to write you. In the article, titled “City of Antioch vs. Humphrey’s: A Whale of a Tale of Competition and Inconsistent Treatment”, Allen Payton suggests that the reason Humphrey’s continues to struggle is partially due to the fact that the City of Antioch has undermined them by opening other venues in town that offer large event seating. Apparently the residents of Antioch should be given only ONE choice of venue to hold their events? I would suggest that if the only way Humphrey’s can succeed is by having a monopoly on their industry…..they’re doing something wrong. When we moved to Antioch 15 years ago, my husband and I would always go to Humphrey’s for special occasions. It was a nice restaurant; right on the water with great views and the food was excellent….but over the years, things changed there. Several times we went and received terrible service and the food was even worse. From time to time we’d hear that it was under new ownership, had new chefs, etc., and we’d go back and try again, but honestly the food was just awful, so we stopped going altogether. It had nothing to do with the fact that other venues opened up, and everything to do with the level of service and the quality of the food we received. Humphrey’s is a wonderful Antioch icon, and I truly hope they can turn things around, but I think it’s completely unfair to blame the City of Antioch for their problems.

    Crystal Stahl
    Antioch

  5. Allen Payton says:

    Ms. Stahl,
    Thank you for your kind words. Glad you like reading the Herald.
    While your experiences at Humphrey’s were unfortunate, the fact that the city went into direct competition with them on the banquet side of their business, is part of the problem and the city is to blame for that aspect of their business – which is a significant portion – hurting, as well as the city spending money on another downtown restaurant which competes with entertainment
    If it were just another restaurant opening in town with a competing banquet facility, without city help, you’d get no argument from me. That’s equal and fair competition, as it should be in a free market economy.
    This is what happens when the government interferes in the marketplace and decides to pick winners and losers, assisting some, and not others, and then worse, going into business and competing with existing businesses. That’s just wrong.
    I believe you’ll find a pleasant change at Humphrey’s, should you be willing to try them, again. If so, there’s a nice coupon in their ad in the August issue of the Herald you might want to use. 🙂
    Allen Payton
    Publisher

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