Once popular restaurants battling financial woes

Last updated: October 05. 2013 10:13PM - 7339 Views
By - jandes@timesleader.com

The Blue Comet Diner on state Route 309 in Hazleton was built in the late 1950s. It was removed from last month's tax sale after delinquent taxes for 2011 were paid.
The Blue Comet Diner on state Route 309 in Hazleton was built in the late 1950s. It was removed from last month's tax sale after delinquent taxes for 2011 were paid.
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Once among the top restaurateurs in the Hazleton area, Lawrence Gabriel is now struggling to keep his 83-year-old eatery out of next month’s Luzerne County back-tax auction.

Gabriel’s on South Poplar Street in Hazleton had been a magnet for customers seeking Italian-American food and a “famous” salad heaped with fresh seafood, but the place started losing money in recent years as more people chose fast food or sacrificed eating out to cut expenses, he said.

With no more cushion to absorb losses and problems with his health, Gabriel temporarily closed the restaurant doors about a year ago.

“Everything kept going downhill,” said the 74-year-old, who has recovered from his medical issues but still requires the use of a cane.

Gabriel’s is among several seasoned restaurants tangled in back-tax issues:

The Newtown Cafe, which opened on Hazle Street in Hanover Township in the 1940s, was listed in last month’s first-stage auction for unpaid 2011 and 2012 taxes totalling $10,570. It didn’t sell, which means the property will advance to an August free-and-clear auction with no taxes or liens attached if the debt isn’t paid before that sale.

The former Hottle’s Restaurant on South Main Street in Wilkes-Barre, which closed in the fall of 2010 after 73 years in business, is slated for a special free-and-clear auction Nov. 14 unless $27,178 in taxes owed for 2010 through 2012 are paid before then.

The Blue Comet Diner on state Route 309 in Hazleton, built in the late 1950s, was removed from last month’s tax sale because owner Louis Pantages paid the 2011 delinquent taxes, but $4,637 in back taxes are still owed for 2012. Properties are auctioned if unpaid taxes date back two years.

The Ugly Mug Restaurant in White Haven, established in 1982, also was removed from last month’s tax sale because the owner — Sciota-based Pantheon Real Estate Investments LP — paid 2011 taxes, but there’s still an outstanding back-tax debt of $5,800 for 2012.

The Stagecoach Inn restaurant, which opened on state Route 309 in Butler Township in 1947, does not carry delinquent taxes but was seized by First National Bank of PA in July 2012 through a mortgage foreclosure action. The bank sold the property to V H Real Estate, LLC, for $175,000 last month.

Tax bill looming

Anna Scarano bought the Newtown Cafe around 18 years ago, though the restaurant was there since the early 1940s.

“Nobody in the family who owned it before wanted it. I’m trying to keep the tradition going,” she said.

She’s digging out of financial problems stemming from a personal matter and is crossing her fingers that business will pick up enough to get her taxes paid.

Scarano is not eligible for an installment plan because her property was already listed in a first-stage sale, which means she needs more than $10,500 before the sale next August. If she waits until next year to pay, she also will be on the hook for 2013 taxes to obtain removal from the sale.

“It’s been a rough year,” said Scarano, who is in the process of selling her home in a short-sale and moving into an apartment above the restaurant to lower her expenses.

Scarano said she can’t compete against the advertising of chain restaurants to promote her pizza and “home-cooked meals.”

“I wish people would realize they should come to mom-and-pop places more often if they want them to exist,” Scarano said. “I can’t tell you the last time I made a profit.”

The Blue Comet closed in March 2011, according to a sign that’s still on the door thanking customers for their patronage. Court filings from 2012 indicate Pantages was challenging a relative’s ownership interest in the property.

William and Lynn Kravits, owners of Hottle’s, convinced a judge to remove the property from an August free-and-clear sale, arguing they are transitioning to new management of the restaurant and need time to work through issues.

A banner on the Ugly Mug announces the restaurant’s reopening, with one saying, “Welcome back. Homestyle cooking returns.”

Contractors were at the Stagecoach Inn last week but said the new owners are not yet ready to publicly detail their plans for the eatery. First National Bank claimed the property along with other mortgage-foreclosed assets of Deets Holding Co. Inc.

Making a comeback

Gabriel, who wants to reopen his Hazleton landmark, is trying to scrape together a $1,880 downpayment to get on a payment plan before Nov. 14, which would allow him to repay the rest in $469 monthly installments over a year.

He is eligible for a payment plan with the county because he didn’t default on one in the past.

He owes $7,022 in unpaid property taxes and penalties for 2011 and 2012. A county judge agreed to pull the property from a September tax auction but likely won’t grant a second reprieve from the Nov. 14 sale.

Gabriel’s parents, Lawrence and Josephine, opened the place as a sandwich shop before he was born, and the family expanded into fine dining in 1957.

“We were raised in the restaurant — seven kids,” Gabriel said, who managed the restaurant while his sister handled the cooking.

Last week Gabriel soaked up mementos displayed in the now-silent restaurant, including a painting of his parents and a 1953 business calendar featuring a pretty woman wearing shorts.

A 1946 newspaper advertisement hanging in the bar area urges people to visit Gabriel’s, “where you will always meet a friend.”

“We serve the type of food that has made many a man stay single,” it says.

Gabriel, who never married, said the place attracted regulars from the Hazleton area but also faithful customers from Wilkes-Barre and Allentown.

“It’s the people I miss. It was long hours but very rewarding,” Gabriel said.

People have urged him to reopen, but he wonders if he can succeed in today’s fast-paced society.

His dining room tables are still covered in linen — he proudly notes tablecloths were always used — in a room that often burst with laughter and other sounds of couples and friends who wanted to linger for food and conversation.

“They say there’s no good place to eat around here anymore, but I wonder if the local family restaurant is going to be a thing of the past. So many people today are always in a hurry and don’t want to sit down and wait for a meal,” he said.

He’s almost certain he’s going to give it another shot.

“I have some pep in me yet,” Gabriel said.

Marketing strategies

Damenti’s Restaurant in Mountain Top does not have any tax or mortgage problems, but owner Kevin McDonald said his efforts to continue drawing in customers have been an endurance test.

The message on his sign promotes both the restaurant’s longevity and freshness: “Still hip after 37 years.”

“We’re hanging on,” McDonald said. “If it keeps going the way it is, everybody is going to be in the same boat. It can’t continue with this economy. Where’s the bottom?”

He’s racked his brain thinking of new marketing strategies. He delivered thousands of golf balls good for a free Damenti’s cocktail at various locations and has slipped dollar bills stamped redeemable for $5 at the restaurant under merchandise when he was shopping.

His unique ice bar also increases foot traffic, as do promotional events where charities receive half the sales.

He believes competition from the increasing number of chain restaurants and also Mohegan Sun at Pocono Downs in Plains Township has likely absorbed some of the money that would otherwise be spent at his place, but McDonald said he’s not focusing blame.

“You can’t fight progress. I have no gripe about that,” he said.

McDonald said he has “the best steak in town” and has been ranked among the top choices of “people who dine all over the world,” including auto racing legend Mario Andretti. Much of his push now is attracting his “third generation of customers.”

He’s added a more casual bar menu, including pesto pizza with shrimp.

“We change. We must adapt. A lot of what we’ve done in the last few years is aimed at also getting into a younger crowd,” he said.

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