Eatery Woes Put Paradise in Peril : Business: Huntington Beach’s landmark skate-rental shop near pier will be evicted from the building it shares with Maxwell’s restaurant, which has been seized by the IRS.
After 14 years running one of Orange County’s most popular skate rental businesses, Glenn Koshi never thought his tenure next to the Huntington Beach Pier would end so suddenly.
“They’re going to move us out by Saturday,” said a dejected Koshi, 32, who, with partner Scott Einbinder of West Hollywood, has run Paradise Beach Co. since 1981. “We didn’t want this for our New Year’s resolution.”
The two, who learned last week that they would be evicted, are trying to win city permission to open a temporary office near their present location, at least until a permanent location is found. But they’re not sure they’ll hear before they must vacate their building Saturday.
“We have nowhere to go,” Koshi said.
Paradise’s trouble is linked to financial problems at the city’s landmark Maxwell’s restaurant, which was seized Tuesday by the Internal Revenue Service because its owner has failed to pay back taxes. After being padlocked by IRS examiners, the building was opened Wednesday to Maxwell’s owner, Paul Wimmer, head of WPL Industries, an IRS spokeswoman said.
The building, erected in 1932, is city-owned and leased for $300,000 a year to WPL Industries. Maxwell’s occupies the top floor along with one sublessee, a pizza restaurant. WPL subleases the bottom floor of the two-story building to Koshi, a Green Burrito restaurant and an arcade.
The closure of Maxwell’s is having a ripple effect on its sublessees: the Green Burrito has already closed. The arcade and pizza restaurant are expected to close their doors Saturday.
In terms of volume, Paradise ranks among the largest skate rental firms in Southern California. On peak summer days, it rents at least 500 pairs of roller skates.
In addition, thousands of tourists, including those here for Monday’s Rose Bowl, have rented in-line skates, surfboards, bicycles, volleyballs and even Frisbees at Paradise.
“We have, or had, probably the best and most unique location in all of California,” Koshi said.
Judith Golden, an IRS spokeswoman, said Maxwell’s was seized after Wimmer failed to pay employer tax and Social Security contributions. The IRS filed a lien against Maxwell’s on Sept. 12, seeking $135,604 in back taxes for most of 1993 and the first quarter of 1994. An earlier lien was filed Dec. 23, 1993, for $257,225.
A WPL Industries spokesman could not be reached for comment.
Financial trouble for Wimmer began more than two years ago, when city building inspectors examined the aging structure.
“We found that we should have closed the building at that time,” said Ron Hagan, Huntington Beach community services director. “There were severe structural, plumbing and electrical problems. But we had a lessee, and the city needed revenue.”
It was determined that the building would have to be rebuilt because renovations that were essentially Band-Aid solutions to the problem were not working, Hagan said.
But new construction was tied to the city’s ambitious Pierside Village development, which later was downgraded to a “Pier Plaza area” that would consist of fixing up the pier’s entryway with colored concrete, landscaping and revamping Maxwell’s. The rebuilding of Maxwell’s has not proceeded.
Despite Maxwell’s IRS woes, Hagan said the restaurant is still scheduled to be rebuilt into a full-service dinner house with lower-level banquet facilities sometime this year.
All projects are on hold because the city has $43 million tied up in Orange County’s crippled investment pool. About $3 million from that fund was for Pier Plaza, Hagan said.
“There’s still a lot of hope,” he said. “We have not canceled the project. It’s still a high priority with the City Council.”
In fact, Maxwell’s project has been approved by the city’s design review board and is scheduled to go before the Planning Commission on Jan. 26. Construction of the new restaurant is contingent on the city’s ability to finance the Pier Plaza improvements as well as the lessee’s ability to secure financing for a new restaurant.
Koshi said he intends to keep his store open through Saturday, hoping the city approves his temporary shop before then.
“You know the city advertises in its brochures about the pier and how you can easily rent skates here,” Koshi said. “I hope the city allows us to put something on a temporary basis. We’ve been down here for so long.”
