Restaurant
business. Their goal is $600,000, or enough, they say, to buy out an investor who is suing them in federal court.
“Our guests told us to try to do whatever is possible,” said Steven Rivelis. “We took that to heart. We’re going to give it our all.”
More commonly used to raise money for things like medical and funeral expenses, GoFundMe has become a tool for some businesses struggling to get traditional loans to stay afloat. In 2015, the owner of Station North’s Joe Squared used it to finance a move. Bar owner Liam Flynn set up a GoFundMe to keep his ale house open.
If Rivelis’ GoFundMe reaches its goal, the $600,000 infusion would prevent the mansion at 924 N. Charles St., with its grand Tiffany domes and intricate wooden detailing, from being sold at auction. Though it’s in foreclosure now, the building is still listed online for $1.9 million — a $1 million cut from its original asking price. Rivelis said they will use the proceeds to repay their investors and hope to stay on as a tenant with the building’s new owner.
But the results of such crowdfunding campaigns, business owners and experts say, can be mixed.
In 2015, Joe Edwardsen raised more than $200,000 through GoFundMe to move his pizza spot Joe Squared, featured on the TV show “Diners, Drive-Ins and Dives,” to a new location on North Avenue. It wasn’t a typical donation, however; when customers donated, Edwardsen sent them a gift certificate — making it a loan redeemable in pizza.
“I didn’t want it to be a straight-up charity,” Edwardsen said. “I know it’s a business.”
The effort achieved the Edwardsen’s one-time goal of moving to a new location, but crowdfunding may just be a “BandAid” for restaurants facing long-term issues like rising rent costs, said Liam Flynn, who began a GoFundMe campaign in 2016 to stave off eviction. Customers, feeling bereft at the closure, donated nearly $15,000 — enough to keep the pub open a bit longer, but far short of the campaign’s $60,000 goal to pay legal fees and other debts.
“There’s only so much you can ask of your customers,” Flynn said.
Restaurant consultant Donald Burns, author of self-help books for business owners, said in an email he had “never seen” a restaurant survive by using crowdfunding to escape eviction. “The reason is that they have deeper issues that are more related to not running a sound business.”
But Rivelis dismissed the idea of underlying problems at The Elephant, saying that the business’s struggles were limited to the property dispute, not to the restaurant itself.
“People are seeing this as a donation for a good cause to save this historic building,” he said. “I think it’s a daunting task. It think it’s a doable task, but it’s daunting because it’s unusual.”
Rivelis said that earlier attempts to get a small business loans had failed, a problem he attributed in part to banks’ reluctance to invest in Baltimore.
Flynn said he wishes there were more resources in the city to help restaurant owners navigate those challenges.
“You have so many people who pour their lives into these places, and they lose it all and come out penniless,” Flynn said. After Liam Flynn’s Ale House closed in
Jan. 2017 and the failure of another establishment, O’Flynn’s Crab & Cask House, Flynn returned to the trade that brought him to Baltimore: working on tugboats.
The restaurant world is one of thin margins and high stakes. But at least one beloved Baltimore restaurant was able to use a loan from customers to crawl back from the dead, Lazarus-style.
For years, Annabel Lee Tavern, the Edgar Allan Poe-themed spot at the corner of South Clinton and Fleet streets, had been losing business to newer bars and restaurants in the neighborhood where Kurt Bragunier first set up shop in 2007. His food and labor costs were out of control: he was spending $11 for every $10 he took in. Finally, in 2017, there were the three missed mortgage payments.
“That’s when the jig is up. You get three missed payments and then you’re done,” Bragunier said. He scheduled an appointment with a bankruptcy attorney.
The weekend after Bragunier announced that the restaurant would be closing in May 2017, “a sea of humanity” showed up to the restaurant. People cried and told stories of engagements that had taken place at the bar. Bragunier compared it to the end of “It’s a Wonderful Life” — times 100.
“I had no idea how much people loved Annabel Lee,” he said, still awestruck, like George Bailey. “I had no idea.”
On his last night in business, one regular asked Bragunier to estimate how much money he would need to reopen. “Ballpark.” Bragunier blurted out a figure: $100,000. The customer, whom Bragunier declined to name, invited him to dinner. Bragunier cancelled his appointment with his bankruptcy attorney.
Instead, Bragunier came up with a business plan to pay his vendors and to get his food and labor costs in line. The customer and another partner loaned him the money to open back up. Almost two years later, Bragunier said he’s still not out of the woods yet. Today, he lives above Annabel Lee and works seven days a week. He estimates that it will take him another year to repay the restaurant’s outstanding debts. But he knows he’s on the right track.
“I don’t take anything for granted,” he said. “I’m just truly blessed.”