"I like having a lot of balls in the air," club owner Dan Bliss told The Plain Dealer two years ago when he, business partner John Michalak, and Steve Spellman purchased the Euclid Tavern. "We're shopping for more deals right now."
Bliss and Michalak appear to have shopped beyond their means. Spot, the weekly entertainment paper they launched in November 1998, ceased publication after three months. They sold the building that houses their clubs, Peabody's DownUnder and Heaven, in March. And last month, Spellman filed a lawsuit against Bliss-Michalak Investments, alleging fraud and fund misappropriation.
Bliss would not comment about his and his partner's businesses on the record. He did say that he and Michalak have done nothing that was inappropriate. "It's a private matter," Bliss says, "and I think it should stay private."
Bliss and Michalak didn't wade into the Cleveland entertainment scene; they dove in headfirst. The Aurora High School graduates bought the Barn, a restaurant in Elyria, in 1994. They purchased Peabody's, a live music venue in the Flats, in 1995. Two years later, they opened Heaven, a dance club that sits atop Peabody's, and bought the storied Euclid Tavern with Spellman and other investors.
Court records show that Bliss and Michalak have sometimes struggled to meet their obligations. In 1997 and 1998, vendors filed four claims, totaling $6,475, against Peabody's for nonpayment. Each vendor was granted a default judgment. In February, two years after Bliss-Michalak purchased Peabody's, the club's previous owners, Dewey Forward and Tom Rutzen, sought in court and received a cognovit note, which is a written acknowledgment of a debt, for $293,533. Also in February, a woman who allegedly injured her wrist after tripping on a riser and falling at Heaven filed suit against the club. When Bliss and Michalak failed to respond to the suit, the woman was granted $45,000. They have since filed a motion to overturn the judgment, citing "excusable neglect." June 29 the woman's attorney submitted a brief opposing the motion.
As if Bliss and Michalak didn't have enough to concern themselves, earlier this year they branched into publishing. Spot was touted as a paper that would fill the perceived void left when New Times Inc. purchased Scene, which was predominantly a music publication before the sale. In content and design, Spot looked similar to the old Scene, though articles were shorter and freckled with graphics. Bliss fancied Spot as a morsel-rich, USA Today-like take on entertainment, telling Crain's Cleveland Business, "We are of the firm belief that young readers have short attention spans and limited time."
In February, after the resignation of four key staffers, Spot abruptly stopped publishing. A month later, Bliss and Michalak sold the Old River Road building that houses Peabody's and Heaven to Spot's major financial backer, restaurateur and club owner Tony George (Slam Jams, Dance.com, the Hairy Buffalo) for a reported $550,000. Bliss and Michalak, though, retained ownership of the clubs.
The infusion of capital appears to have stabilized, temporarily at least, Bliss and Michalak's financial position. Forward says that the cognovit note was "a legal maneuver just to straighten up our relationship," adding that Bliss and Michalak are "on much firmer ground right now. They're ambitious young men, and they have a good future ahead of them."
George, who is now Bliss and Michalak's landlord, describes the pair as enthusiastic entrepreneurs, "good kids that got in over their heads." He compares their business appetites to that of a "minnow eating the elephant."
Spellman is less forgiving. His lawsuit claims that Bliss and Michalak willfully misused his and others' investments in the Euclid Tavern.
Their arrangement is a complicated one. The property and the building were purchased by a limited partnership of Bliss, Michalak, and Spellman (BMS). Spellman, John Schmidt, and other silent investors bought the Euclid Tavern business. Spellman says that Michalak also had a stake in the club, "but due to things he did and didn't do, I wouldn't really consider that he is [an owner]. They have no power in the business and also no longer have any power [over] the building. Myself and John John Schmidt are taking care of everything on the business side."
As the operator of the Euclid Tavern, Spellman was paying rent to BMS. Spellman says that BMS, however, wasn't paying the mortgage or the taxes on the building. Fearing foreclosure, Spellman says that he stopped sending his rent to BMS and instead assumed payment on the mortgage and settled affairs with the tax collectors; thus, he and Schmidt should have control of both the business and the property. "We're not buying it," Spellman says. "We're acquiring it through the lawsuit. It's rightfully ours."
Spellman and Schmidt also seek $25,000 in damages and $500,000 in punitive damages.
Last week Spellman said that he hoped a settlement could be reached, and that he doesn't want clubgoers to think the Euclid Tavern is in danger of closing its doors. "I'm not making a million in there," he said, "but we're plugging along."
Multimedia fetishists should not miss a reading of the illustrated short story Dude Sunday, July 11, at the Grog Shop. Dude, described as "a cynical tale of woe," was written by Pete "Pussy" Willows. Clay Parker did the corresponding artwork.
At the Grog, Willows will read from Dude as 16 and 35mm films by Robert C. Banks Jr. are projected. To further snap your synapses, the Plastics will add their edgy pop-rock. The Plastics are made up of singer Aaron Koonce (the Conservatives), drummer Barb Eckles (Downside Special), and bassist Carol Schumacher (Chump).
"Pete likes the music," says Koonce, explaining how Willows tabbed the Plastics for the reading. "He's only missed two of our shows. He's always there."
The BackUp Band, which formed in 1983, has a new rhythm-and-blues CD on Wilberts Records. It features eight covers (from Leiber and Stoller to Chuck Berry) and three originals. Guitarist Bill Kirchen and keys man Peter Bonta helped out on some of the tracks. The release party is Friday, July 9, at Wilbert's.
The second WZAK Saturday in the Park concert is July 10 at Glendale Park. The series, which runs through August 28, visits a different city park each week. Atlas & Total Package perform at noon this Saturday. Admission to this show and all others is free.
Belkin Productions is releasing a CD featuring sixteen finalists from the most recent High School Rock-Off. Accelerator, the Mods, Orange Lazarus, Circle of Willis, and Blue Wysteria perform at a CD release party at the Odeon Thursday, July 8.
There's a free finger-style acoustic guitar workshop at the Cuyahoga Community College West Amphitheater Sunday, July 11. Cleveland's Brian Henke, Nashville's Pete Huttlinger, and Ann Arbor's Jason Dennie will perform.