NC Department of Revenue shuts down the Wild Magnolia CafÃ©
Three entertainment venues in Greensboro and High Point that feature live music closed in the last week of April. At least two were shut down as a result of falling behind on state taxes, but an NC Department of Revenue official said it was a coincidence that the seizures took place less than two weeks after the April 15 tax-filing deadline.
State tax agents accompanied by Guilford County Sheriff’s deputies changed the locks and posted a no trespassing sign at the Wild Magnolia CafÃ© on April 25, Officer JC Raines said. The venue is a Cajun-themed bar on the corner of Walker Street and Elam Avenue in Greensboro that has offered live bands five nights a week.
‘“The Department of Revenue will start an inventory,’” Raines said. ‘“A public auction will be held if the owner is unable to repay the debt. We can’t sell the real estate, only the assets: the bar stools, alcoholic beverages and items like that. We change the locks so the owner of the assets would not be able to walk in and sell them off.’”
The Department filed tax liens against Wild Magnolia’s on April 8 for $16,105, about $2,800 of which accrued from penalties and interest. Mike Rowe, who owns the music club with his wife, said those only represented a portion of the debt; he declined to name a specific amount but said the total debt was in the six figures.
‘“We do intend to try to reopen the club as soon as possible,’” he said. ‘“There may be some restructuring. I’m in the process of trying to sort through it with my lawyers. I don’t have a timeline on it.’”
Abe Reid, a Statesville-based bluesman who has played four times at Wild Magnolia’s in as many months, said Rowe has always been generous in paying bands.
‘“If every club owner was Mike my job would be so much more pleasant and I would probably be a little more flush because he’s fair,’” Reid said. ‘“A lot of gigs you get a percentage of the door. He’ll always give you the door, and if the bar does good he’ll kick you a little extra, which is something he totally doesn’t have to do. I don’t know of any other bar owner that will do that.
‘“You don’t play a lot of clubs where the dude who owns the bar can hop up on stage and play the Leslie [organ] with you,’” he added.
Rowe said the essence of Wild Magnolia’s financial difficulties was that the club had some tough years when he brought in bands that lost money.
‘“People think you’re making money hand over fist, but it can be tough to make a profit in this business,’” he said. ‘“We try to be fair [to the bands], and we don’t try to make money off anybody else’s back.’”
Rowe said he has been trying to make arrangements with the Department to repay Wild Magnolia’s debts for the past six months and that the club’s financial difficulties go back years. The Department sends business owners two assessments before filing a certificate of tax lien in the county courthouse.
‘“It’s not like the state of North Carolina is going in and swooping up some unsuspecting taxpayer,’” Raines said. ‘“It is not the intention of the Department to destitute anyone, but it’s not fair to the honest taxpayer of North Carolina to have people with outstanding tax liabilities.’”
Rowe said he is behind on both sales and income taxes.
‘“Usually when a business gets delinquent, what has happened is that they collected sales tax, but when their monthly sales tax comes due for some reason the money has already been spent on other necessary items,’” Raines said. ‘“It was never the business’s money to spend.’”
Keegan’s Pub, a Greensboro bar on Battleground Road that has featured live bands two nights a week, was also closed on the night of April 27. There is no indication of whether the club was shut down because of tax troubles. The Department of Revenue did not respond to inquiries about the business’ status and calls to the club on April 27 and 28 went unanswered. A sign taped to the front door on April 27 states: ‘“We will be closed for Monday. Sorry.’”
The Red Lion and the Lion’s Lair, entertainment venues in High Point that feature live music, karaoke and DJs, were also closed in the last week of April. Owner Gary Redd did not return phone calls on April 28. It was not clear if and when the two venues would reopen.
Two tax liens filed against Red Lion Manestream by the state’s tax collection agency indicate that the business owes the state a minimum of $29,980 from a period between October 2003 and February 2005.
The Department filed a tax lien for $359,576 against Ham’s Restaurants on Feb. 3. The Greensboro chain includes 17 restaurants in North Carolina and one in Virginia. Three of the company’s restaurants in Greensboro regularly feature karaoke.
Corporate Financial Officer Robin Young said Ham’s Restaurant has already paid off some of its debt to the state and owes significantly less now.
‘“It’s being paid off in a systematic fashion,’” he said. ‘“We don’t have any problems with staying open. We expect the liability to be taken care of by the end of the year.’”
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