Stowe’s celebrated Rusty Nail Bar and Grille may not have a new owner after all.
Jim Goldsmith, owner of the Blue Donkey Restaurant on Mountain Road, had planned to buy the building Thursday, Nov. 1.
But the deal fell through when he discovered a number of issues with the property, he said.
“It doesn’t leave us any solution other than to terminate it and move on,” Goldsmith said.
The bar and restaurant at 1190 Mountain Road is owned by Stan Swierzewski, a Massachusetts urologist, under the name KSK Properties LLC.
Goldsmith emerged as a potential buyer for the property this fall, and the two parties were close to an agreement. The bar has been on the market for several years; it’s listed for $1.75 million.
Darrow Mansfield, Goldsmith’s business partner, said the deal fell through because of title issues — liens and other things attached to the property that they want cleared up before they buy it.
Mansfield said his firm and KSK Properties also dispute certain details about the building, such as seating capacity.
According to town records, KSK owes the Stowe town government $27,000 in back taxes, and the property is the subject of a foreclosure lawsuit from MTB Builders Inc. of Waterbury, which was hired to do work there. Also, the town government has a lien on the property for unpaid sewer fees, dating back to 2001. Swierzewski bought the property in 2004 from Bobby Roberts, a Stowe Realtor.
Goldsmith said he discovered the issues in a title search, and had no idea the property had so many problems.
“We feel we’ve been bamboozled,” he said. “We wasted a lot of time and money on this.”
Peter Tucker of Vermont Country Properties, the firm handling the sale for Swierzewski, said he contacted his client for comment on this report, but no comments had been made by press time.
Goldsmith told the Stowe Reporter last month that he hoped to turn “The Nail,” as locals call it, into a nightclub with a focus on music acts, describing the current setup as more of a “gastropub and martini bar.”
“The Rusty Nail for us is the kind of club cabaret-nightclub place that we’ve always been interested in,” he said at the time.
Mansfield said even if his firm can come to an agreement with the seller, it would likely be too late to open the business under new management before the holiday season.
Old issues
According to town records, KSK has had a string of legal problems with the property.
Since 2009, KSK has been on the list of Stowe property owners who didn’t pay their taxes on time. For the most part, the taxes were eventually paid, but KSK still owes the town about $27,000 in back payments, said Town Clerk Alison Kaiser.
A lien was placed on the property in 2001, under former owner Bobby Roberts, for nonpayment of about $47,000 in sewer allocation fees. That lien transferred to the new owner in 2004.
Also, MTB Builders Inc. of Waterbury sued KSK in Lamoille Superior Court, saying it wasn’t paid for work it was hired to do on the Nail in 2006. In 2008, according to court records, MTB was awarded about $60,000 in damages and attorneys’ fees after arbitration.
But then MTB alleged it wasn’t paid promptly for the damages and attorneys’ fees, and moved to foreclose on the property in 2011.
Brice Simon, a Stowe lawyer for MTB, said the foreclosure suit has been put on hold while the two parties try to work out an agreement on paying the bills.
Long history
The Rusty Nail name has a long and illustrious history in Stowe. The first “Nail” was built in an old horse barn in 1969 by Stowe’s Gar Anderson, and was a popular hangout for rockers and ski bums.
The name “Rusty Nail” comes from the Scotch and Drambuie cocktail of the same name.
The building was torn down in the 1970s but a new one was built near the Gables Inn on Mountain Road, in 1990.
That building burned down in 1994, and a new one was built in 1996.
Goldsmith said he doesn’t see the dispute with KSK getting resolved anytime soon.
“I don’t foresee anything good happening,” he said.
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