After less than a year in operation, Shockleys at The Carlton Hotel in Atascadero served its last meal Friday.
Owners John Shockley and Kimberly Ness decided not to renew their one-year lease because of financial uncertainty, citing a 40 percent drop in restaurant sales starting in June and Carlton owner David Weyrichs financial problems, Shockley said.
Weyrich is working to keep the hotel afloat; debts have forced him into foreclosure on other properties, including his luxury Villa Toscana bed-and-breakfast in Paso Robles.
Shockleys recent drop in sales happened to coincide with the arrival of Weyrich on the property where he now works five days a week as well as calls from locals complaining that he is back, Shockley said.
People want to know, Why am I here? Weyrich said. I have a huge investment. I invested in Atascadero when nobody was, and I am here to make it work.
To avoid foreclosure on the hotel, Weyrich negotiated a forbearance agreement with R.E. Loans after defaulting on a roughly $23 million loan that packaged several properties. The agreement delays action on the debt owed until he and the lenders can agree on an amount. Those financial obligations are being met, Weyrich said, adding that The Carlton Hotel saw its strongest month in three years this July.
Weyrich previously operated The Carlton Restaurant & Grill in Shockleys location until it was forced to close in February 2010 because of its failure to pay state taxes.
Weyrich said of the Shockleys closure: They bit off more than they can chew. The restaurant business is tough, adding that he tried to assist Shockleys by providing the first three months rent-free and extra bakery space.
He also said that June and July are typically slow for restaurants in Atascadero, especially following the boom month of May with Mothers Day and high school graduations.
The restaurant had 37 employees at its peak, Shockley said.
Weyrich said he is in talks with another prospective tenant to fill the space as soon as possible with food and prices that will be viable.
Shockley and Ness, who moved from the Bay Area to open Shockleys, now own a home here and are looking forward to staying in the area.
The city of Atascadero circulated a news release assuring that Weyrich is working with the citys Office of Economic Development, the Atascadero Chamber of Commerce and Atascadero Main Street to create an action plan to fill the key food service anchor space as soon as possible, citing the possibility of using a city restaurant stimulus program.