Trouble brews as popular coffeehouse closes its doors

Owners of Blue Rock Shoot clash over lease terms

Reopening scheduled

By Rebecca Ray

Blue Rock Shoot, a coffeehouse frequented by families, college students and business professionals alike, closed its doors Oct. 27. The closure resulted from a disagreement between Mitch Cutler, who owns the building that houses the restaurant, and the former business owner, Josh White, over the terms of White's lease.

According to Danielle Surdin, the city's economic development coordinator, Cutler has re-leased the building, at 14523 Big Basin Way, to an unidentified new owner who plans to reopen the business by December under the same name.

White said he was unable to make the $6,000 monthly rent payment for October. According to White, Cutler also said White didn't pay the biannual property tax bill, which amounted to about $5,000. White said he paid the property tax, but was unable to prove it to Cutler because he couldn't find the receipt from the cashier's check. The restaurant kept poor records, White said.

According to White, ever since he acquired sole ownership of the business from Cutler in 1999, he had been borrowing a lot of money to keep the business afloat. White said that although it was hard to tell how profitable the business was during the time he ran it, he likened his continuous struggle to make payments to "swimming as hard as I could just to keep my head two feet under water," White said.

White said that when he obtained partial ownership of the business from Cutler in 1997, he was not aware that the business was losing money. He later saw tax returns that showed the business had lost about $15,000, he said.

The business couldn't succeed without outside help, White said, so this year, he asked Mark Evans, a Saratoga Realtor, if he wanted to co-own Blue Rock Shoot. Evans had the necessary capital, White said, and was knowledgeable in business matters. According to White, Evans was willing to pay the debts White owed, including the property tax.

White said he and Evans asked if Cutler would negotiate the matter. But, according to White, Cutler said he didn't want to negotiate, and that White needed to pay the rent and property tax. White also said Cutler didn't want Evans to co-own the business.

Cutler then asked White to sign a mutual release, White said. Parties sign a mutual release to settle a disagreement over a breach of contract. White said that if he had signed the document, he would have had to pay the rent and property tax. He chose not to sign it because he had acquired a lot of debt, he said, and there was no way he could cover it himself.

White is considering filing for bankruptcy. "I'm pretty much starting over from zero at this point," he said, adding that he has nothing left.

On Halloween, according to White, Cutler served White with an unlawful detainer. Landlords often use an unlawful detainer to evict tenants, according to Saratoga attorney John Mallen.

White said he planned on cleaning out remaining personal belongings from the coffeehouse. He added that he has donated most of the inventory to charity.

Cutler declined comment.

White described the situation as "overwhelming" and said that when he bought the business from Cutler, he had no idea what he was getting into.

White met Cutler while he was a waiter at La Fondue, a restaurant Cutler owns across the street from Blue Rock Shoot. Later, in March 1996, Cutler offered White, who was in his early 20s, a management position at the coffeehouse. White accepted the position, even though he had had no previous managerial experience.

In 1997, when Cutler offered White the chance to buy half of Blue Rock Shoot, White did so by borrowing $89,000 from his family. White said he figured Cutler was giving him an opportunity and that he never thought to question Cutler's motives. According to White, he purchased the rest of the business with a $90,000 promissory note, a loan agreement between a landlord and tenant in which the tenant owes the landlord a certain amount of money over a certain period of time.

Under the five-year lease, which was to end in 2004, White said he was responsible for maintaining the building. According to White, the original agreement also said the lease had no option for renewal.

White admitted that when he signed the lease, he did not understand the legal jargon. He added that he never thought to speak to a lawyer about signing it and that he assumed it was a fair deal.

"[Signing the lease without consulting a lawyer] was the biggest mistake I made in my life, and I won't make a mistake that big again," White said.

White is thinking of working in local real estate, and says that Evans has been training him in the field.

White says he misses chatting with the customers at Blue Rock Shoot. Not only did he and his employees know their names, but they also knew the customers' children, their dogs, what they did for a living and where they were from, he said.

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