Martha's Daughter could lose liquor license
Martha's Daughter, an acclaimed eatery in downtown Duluth, won't be serving alcohol any longer, at least for a while. The Duluth Alcohol, Gambling and Tobacco Commission voted Wednesday night to suspend the restaurant's liquor license for missed ...
Martha's Daughter, an acclaimed eatery in downtown Duluth, won't be serving alcohol any longer, at least for a while.
The Duluth Alcohol, Gambling and Tobacco Commission voted Wednesday night to suspend the restaurant's liquor license for missed payments. That recommendation will now go to the Duluth City Council for consideration.
Nyanyika Banda, owner of Martha's Daughter and a former food columnist for the Duluth News Tribune, did not attend the commission meeting. But she did notify customers via a Facebook post that she planned to take a brief hiatus from her business, describing it as "a spring break for a couple weeks."
Banda did not respond to a voice message or an email from the News Tribune on Thursday, asking about her plans for the restaurant at 107 E. Superior St.
Her Facebook post said: "I will be meeting and brainstorming with my current staff, whom I consider not only friends but family as well as a team of supportive, thoughtful and ambitious folks about how we can create a space that is a positive contribution to our community. Redesigning our menus and planning a future that is bright!"
This isn't the first time Martha's Daughter has experienced financial difficulties.
Back in January, Banda came before the commission for nonpayment of local food and beverage tourism taxes her restaurant had collected from June through November but failed to remit to the city.
By December, the city estimated Banda owed it $6,977.80 in back taxes. She reduced that debt to $3,193.55 and entered into a repayment plan with the city in January. Deputy City Attorney Steve Hanke told commissioners Wednesday that Banda has remained current with those payments since then.
The Duluth Alcohol, Gambling and Tobacco Commission reduced the prescribed $500 penalty it could have charged Banda in January, dropping it to $100.
At the time, Commissioner Ryan Stauber said he didn't want to risk forcing the owner of the 7-month-old restaurant out of business.
"I think a $500 civil penalty is going to shut you down, and that's not what good government should be about. It should be about helping people succeed. This is obviously an error, and you intend to fix this," he told Banda.
Banda told the commission her restaurant had experienced cash-flow difficulties, causing her to temporarily fall behind on payroll as well as taxes.
She reduced the restaurant's hours in what she described as an effort "to refocus the business."
Banda told commissioners in January the restaurant was getting back on track, saying: "Right now I'm working with a new accounting company. Basically I'm in the process of trying to recalibrate right now."
While Banda has stayed current on her tourism tax repayment plan with the city, she remains in arrears on tax payments to the Department of Revenue. As a result, Martha's Daughter has been placed on a delinquency list, denying it access to wholesale alcohol distributors since July 18.
The restaurant also fell behind on payments for its liquor license. Hanke explained that the city licenses drinking establishments on an annual basis but allows proprietors to opt for quarterly payments.
He said Martha's Daughter failed to make three quarterly liquor license payments to the city and owed $4,268.25 as of Jan. 15.
Assistant City Clerk Roberta Pirkola said the next quarterly liquor license payment for Martha's Daughter is due April 15, and she has already received notice from Banda that she probably will be unable to make good on that charge either, increasing her prospective total tab to $5,165.25.
Hanke noted another concern arose when the city received notice from Illinois Casualty Co. that it had canceled the liquor liability insurance policy for Martha's Daughter because Banda had fallen behind on premium payments. Such coverage is mandated by state law.
He recommended the commission suspend restaurant's liquor license indefinitely, until the city is reimbursed and Banda can provide proof of proper insurance coverage.
Commissioner Lon Hanson observed: "Additional fines and penalties aren't necessarily going to assist in getting her feet back on the ground and the business back up and running."
"Is there a way to limit the future penalties on these charges while she's actively working to get caught up?" he asked.
Pirkola said that if Banda enters a repayment agreement, it may be possible to waive an $897 penalty charge.
In her recent Facebook post, Banda reflected on her first year of restaurant ownership, saying: "I am humbled and overwhelmed by the positive feedback and accolades we have received in such a short time! It has also been however the most challenging year of my life. Filled with more tears than laughter and more self-doubt than confidence (I am an artist after all). I've been navigating business ownership as best I can; learning by making all of the mistakes."