April 10, 2008
Would You Like To Open a Coffee Shop?
By now you've all heard that Murky Coffee's Capitol Hill location has been shuttered after the city seized the coffee shop thanks to owner Nick Cho failing to pay more than $425,000 in sales tax to the city. The building's landlord has since evicted the coffee shop, so it won't be reopening. Today the Post's D.C. Wire blog brings word that the entire contents of the shop are being auctioned off by the D.C. government.
According to a legal notice published earlier this week, the tax office would like to sell all of Murky's assets as a whole and bids will start at $10,000. The highest bidder will have 24 hours to make out a certified or cashier's check payable to the D.C. Treasurer. No personal checks will be accepted, according to the notice.The items for sale include multiple stainless steel espresso machines, a counter dishwasher with a built in booster heater, and many sealed bags of organic and nonorganic coffee beans, according to the Post.
If you've got access to $10,000 in cash, this sounds like a pretty good opportunity to start your own coffee shop with little fuss for a rock bottom price. All the items are still at the store, so it stands to reason the building's owner might be amenable to a ready made tenant. We'll be interested to see if an entrepreneur steps forward to start a new business out of Murky's ashes, or if the city ends up having to sell the items off piece by piece. The auction items will be on view on Tuesday, April 15 from 10:30 a.m. to 2:30 p.m., and on Friday, from 12:30 p.m. to 2 p.m. at 660 Pennsylvania Avenue SE.
Photo by rockcreek
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So lessee....$425,000 in unpaid taxes since 2004....divided by three years....$141,666 a year in taxes, not counting rent, salaries, insurance, business expenses. How much friggin coffee do you have to sell to actually turn a profit in this town?
Unless I can run a massage parlor (with crappy endings) in the rear, I'll pass. I guess you'll have to take my name off the list for this year's Little Lebowski Urban Achiever Award.
It does indeed sound like a perfect setup for a coffeehouse entrepreneur. All that equipment for only $10k, an established location, a landlord already used to a coffeehouse, and a willing local clientèle. All the entrepreneurs would have to do is pay their rent and taxes and they're all set to launch a successful business.
Well, Eastern Market could sure use another Starbucks. It's such a hassle walking that extra block and a half down to 8th & Penn.
You friggin KNOW Starbucks is eyeing that property. Them and Subway.
How much in kickbacks would it cost to change the zoning to belgian-ale-and-frites tavern? Granville Moore's isn't open for lunch and Belga Cafe sucks.
I imagine the $425k includes interest and penalties. The CP link lists $220k as the outstanding tax, someone on the previous thread listed $265k.. somehow that number jumped to $425k.
Monkey, since the money that Murky owes is all sales tax, they should have been able to make a profit just fine. You don't calculate your prices and profitability with the assumption that you get to keep the extra 10% you're charging on behalf of the government . . . unless you're an idiot, of course.
Nate - I wouldn't go so far as to call Murky's owners "idiots," but I'm curious as to where the millions in "profit" went? Caymen Islands offshore holding company? Hookers and forties? Adjustable rate mortgates? Up his nose?
Sorry, but not paying sales tax = idiot. It's not like it's a concept that's unique to DC.
And while we're at it, DC letting the issue languish for 2+ years = idiot also.
@Monkeyrotica- The sales tax owed shouldn't really affect your business at all. It's like if one of your friends Joe owed money to another friend Steve and they weren't going to see each other for awhile. So Joe just gives you the money and asks you to give it Steve when you see him next week. This shouldn't affect your finances at all. Unless of course you say to yourself, "I really want a new coffee grinder this week but I don't get paid until next week. Hmmmm I know! I don't see Steve for a few weeks, I will just use the money Joe gave me and pay Steve back from my paycheck! Hurrah!" So now your finances are involved.
I am guessing this is a simplified version of what went down at Murky. Instead of holding onto our sales tax until he had to turn it over to the government, he spent it and planned to pay the government with future profits. Only they didn't come or were used for something else, I don't know, this is all speculative.
There wouldn't be millions in profit either, the sales tax is measured on what they sell. Even if there weren't additional penalties added on and the 425K was just the base amount owed, it seems conceivable to me that they sold 4.25 million dollars worth of merchandise over the last 4 years. Subtract from that 4.25 million the purchase cost of all his equipment, rent, buildout costs, workers' salaries, coffee beans, supplies, electric bills etc. etc. and I don't think he would have had millions in some Cayman account but like Nate said I am sure he could have made a reasonable little profit.
Does anyone know what is happening with Murky's Clarendon store? I heard they were in the same trouble with Virginia taxes. Is that store going to close as well?
Unless you're from Belgium, there's no complaining about Belga Cafe. This is the first negative comment I've ever seen about them. The place is fantastic. Just have to defend it.
wow. just wow. that is a royal f*ckup. Nice job, murky. NOW where do we go for quality espresso?
teriaki - My problem isn't with Belga's food, it's their management. Some of us like to be served our food before it gets cold. I know you Belgians have to stick together, but I have to be honest.
seems like a sweetheart deal, if you can get a bid in for $10K and no one else runs up the bidding (sure that won't happen, though). lots cheaper than having to buy all this stuff retail...
I have to concur with Monkeys assessment of Belga. I went and was thoroughly not impressed. My fries were mostly broken tiny little bits only an inch or two long. Very lame.
Frankly I could make my own mayo and put it on some McD's fries.
Man that really sucks....I really liked Murky :(
oh, and @monkeyrotica: if you want to start a happy ending massage parlor, let me know. I will invest about $5k. I support your ambitions.
yonas - Thanks for the offer, but I said "crappy endings" not "happy endings." Y'know? A quick mineral oil rubdown and a round of "mudsports?" Hello? IS THIS THING ON?
@monkeyrotica...OOhhh...I see. My bad. I withdraw my statement. I don't think there's a market in DC for that, but I met some people in Munich that would be down!
My problem with Belga is the food and the service. I've shown up with a reservation yet was told to wait. I went for brunch once and the food was bland. I tell everyone to avoid the place.
Why someone would want to buy and potentially serve coffee that's been sitting around for, what two months now, is beyond me. Only thing those beans are good for now would be grinding up and putting in your garden.
Just because the bags are sealed doesn't mean the coffee's worth serving.
Also, what do they mean "multiple stainless steel espresso machines?" There's just one.