Bangor Sea Dog closes; city panel decides to terminate lease

BANGOR – The owner of the Sea Dog Brewery Co. on the city’s waterfront telephoned his restaurant manager Tuesday morning and asked her to put up a “closed” sign on the door.

Zabatta Peters said she did what she was told, but she did not receive instructions as to when to take it down.

“We are closed until further notice,” said Peters, who added that about 60 people work at the brew pub, “and they will all be at the unemployment office [today], if that’s what they choose to do.”

Sea Dog Brewing, which is under bankruptcy court protection, is five days late on its rent payment to the city of Bangor, owner of the property at 26 Front St., according to Norman Heitmann III, the city’s attorney. On Tuesday evening, the City Council’s economic and community development committee decided to impose default clauses in the restaurant’s lease agreement and begin the process of terminating it.

All the members of the City Council will vote on the committee’s recommendation at a special meeting later this week.

“It’s important that the city take some action as soon as possible to get that building reoccupied,” Heitmann said.

It is probable that the Sea Dog Brewing Co.’s other two locations – in Camden and Topsham – could be closing, too, leaving at least another 40 people out of work. According to attorneys involved in the restaurant’s bankruptcy proceeding, the Sea Dog’s primary creditors are seeking to assume their rights to claim leases at all three restaurants and sell them at a foreclosure sale. Hearings are scheduled in Maine district courts starting Friday.

It was uncertain Tuesday what would happen to the Sea Dog line of brews and ales, which are sold throughout most of the United States.

What prompted the Sea Dog owner’s telephone call to his Bangor manager on Tuesday morning was a ruling by U.S. Bankruptcy Court Judge Louis Kornreich not to lower the amount of money owner Joseph G. Wortley owes his primary creditor, WWN Group.

WWN Group is made up of the founder of Sea Dog Brewing Co., Peter M. Camplin Sr., and others who carry the rights to the restaurant’s equipment and the building lease as collateral on the more than $1 million they are owed by Wortley.

Richard Olson, an attorney for Sea Dog Brewing Co., said Wortley agreed to a payment schedule last year based on appraisals on the equipment that were presented in court at the time. After Wortley began making payments, the attorney said Wortley saw appraisals conducted before the payment plan was drawn up that valued the equipment at lower numbers.

Wortley wanted to reduce his debt by $400,000, to $600,000 payable with interest over 15 years, Olson said, but Kornreich ruled that the plan must have been acceptable all along because Wortley had made nine payments to WWN since December.

Besides the more than $1 million the Sea Dog owes WWN, the restaurant also owes more than $700,000 in unsecured debt, Olson said. The Sea Dog also owes Bangor more than $18,600 in taxes that were due in 1997. The city gave the Sea Dog a favorable, “at cost” lease in 1995, and the restaurant agreed to renovate the former warehouse.

“We’re living day by day, and we’re trying to make sure we don’t run up any more expenses,” Olson said.

Daniel Cummings, attorney for WWN, said Wortley missed his October payment and “my client has the right to move forward” and claim rights to the restaurant’s equipment and leases. The city, however, still must approve any new leaseholder, including WWN, said Heitmann.

City Councilor Dan Tremble said the building is “valuable property” in the city’s waterfront development plans, and the city doesn’t want to wait while WWN and Wortley sort out their payment arrangements.

“If I put out the call tomorrow that the line forms here, I wouldn’t see the end of the line,” said Heitmann, about potential business interest for the Sea Dog building.

The 8-year-old Sea Dog closure follows the shutdown announcements by Pilots Grill restaurant and Porteous department store on Monday. The 62-year-old Pilots will close Dec. 31, leaving 60 people unemployed, and 25-year-old Porteous will close in mid-January, displacing 35 people.

“Eight years – it may not be a Pilots Grill, but it was a bit of an institution,” Heitmann said.