Sale aims to offset Magnolia restaurant debts

Norfolk

All the kitchen equipment and cookware, dishes and decor of Magnolia Steak & Seafood Co. went up for bid Thursday morning as auctioneers sold off the defunct restaurant's assets.

Cary Petzinger, who owns the building at 749 W. Princess Anne Road, said she hoped to collect from the sale at least part of the rent the restaurant's owners owed when they shut down in late September. After 18 years in business, Magnolia Steak owners David and Tracey Holmes said they couldn't survive the suffering economy.

Petzinger said she had worked with the restaurateurs through tough times before, but they couldn't recover from the most recent decline in business. Around the time they closed, they agreed to turn over the restaurant's property to her to help pay their debt, she said.

The auctioneers, Atlantic Asset Management Group, expected the sale to bring $15,000 to $25,000, Petzinger said. She expected it to cover only a fraction of the past-due rent.

The landlord, however, isn't the only one awaiting money owed by Magnolia Steak. During the auction, the Norfolk Treasurer's Office delivered a lien against the proceeds from the auction.

Magnolia Steak owes the city unpaid meals taxes since February, said Carl Cox, a deputy treasurer. Because of Petzinger's simultaneous claim on the restaurant's property, he expected the matter to end up in court, he said.

When starting the sale, auctioneer William Summs mentioned that the Holmes-es also owe final paychecks to employees but said he expected they would correct that situation.

The Holmeses could not be reached for comment. The phone number listed in the local directory for their home in Ghent answers to a fax machine.

The Magnolia Steak space has attracted interest from four or five potential new tenants, Petzinger said. "We'd certainly like to see another restaurant come in."

Carolyn Shapiro, (757) 446-2270, carolyn.shapiro@pilotonline.com