Problems plague Village House renovation, force EMQ to sell

Netscape co-founder buys L.G. restaurant,
but says he's worried

By Jeff Kearns

After discovering a litany of serious structural problems at the former Village House restaurant in Los Gatos, Eastfield Ming Quong is selling the building to Netscape co-founder Bill Foss.

Foss and restaurateur Andrew Welch had planned to turn the restaurant into an upscale eatery last year, but as work started on the building, they discovered that it was going to be a lot harder than originally thought--and a lot more expensive.

At that point, EMQ realized it was in over its head, and offered to sell the property to Foss for an undisclosed amount.

"We're not going to be in the financial position to be the landlord for that property on a long-term basis," said EMQ Chief Operating Officer Rick Williams. "As we got into this project, it became real clear that the building needed more renovations than we were financially able to take care of."

By selling the property, EMQ gets an infusion of cash that it will use to start an endowment fund to benefit EMQ programs and services. "Selling it to Bill allows us to continue the partnership we started before," Williams said. Originally, the plan was to lease the space to Foss and Welch.

Meanwhile, Foss and Welch must decide if they're going to be able to keep the building or will have to start over--or if they're going to be able to open the restaurant at all.

"It looks bleak," says Foss. "I'm fairly depressed over the situation. We're now looking at a year and a half before we can open the business. The right way to do it would be to level the building and build something that's seismically correct."

"The building's in very bad shape," Welch said. "We're trying to figure out if we're going to be able to keep it."

A recent structural analysis showed that the cost of bringing the building up to code, originally estimated at about $500,000, would probably be more than $2 million.

On top of that, if they decide to keep the existing building, minor plan revisions may mean that Foss and Welch need to re-apply to the town and maneuver the changes to the building through the Planning Commission and have their use permit modified. The restaurant needs a five-seat counter area for servers and customers and an 8-by-10 foot walk-in refrigerator for storage.

The bad news came to light when the requirement for bigger Americans With Disabilities Act-compliant bathrooms triggered a structural review for the entire building. "Then we found out the whole thing was about to fall over, which put EMQ in a bad position," Foss says.

Foss agreed to buy the building, but that was before he knew that he was going to have to go back through the planning process with the town.

The partners won approval to operate the restaurant last year, but the modifications could require that the restaurant's use permit be re-opened in a public hearing--which could bring out the same opponents as last time, who charged that the restaurant would add to parking and traffic woes in the area.

"Our only mistake is doing this the right way. Everyone else just goes ahead and does it," Welch said. "But we'll make it work."

Campbell-based EMQ Children and Family Services serves 4,500 emotionally disturbed children per year

EMQ on March 1 finalized its $4 million acquisition of the Giaretto Institute in San Jose, a leading agency for sexual abuse treatment and training. EMQ auxiliaries operate three revenue-producing shops: the Butter Paddle kitchen and gift shop in Saratoga, and two thrift stores, the Happy Dragon in Los Gatos and the Unicorn in Almaden Valley. For 35 years, volunteers operated Village House as a lunch and catering restaurant, turning over proceeds to EMQ.

Foss and another Netscape founder, John Mittelhauser, opened The Basin in March, an upscale bar and restaurant on Big Basin Way in Saratoga.

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