Wells Fargo takes over former Jack’s location
The bank-owned property at 7863 Girard Ave., formerly Jack’s casual and fine dining, has been foreclosed on and there were no bidders at a recent auction in an attempt to sell the property.
“It is now owned by Wells Fargo Bank, they are the lender,” said Mike Slattery, a Grubb & Ellis/BRE Commercial broker in La Jolla.
The 17,000-square-foot, three-level restaurant complex had been transformed by Bill Berkley into a multi-themed establishment including a five-star restaurant with a mellow piano bar, a dance club and a tranquil bar with a 900-bottle-wine-list and live jazz. The building at one time housed more than 15 retail tenants.
Berkley did not return calls seeking comment.
According to public records of the California State Board of Equalization listed on its Web site, Wellington Inc., DBA Jack’s of La Jolla, owes $692,004.48 in sales and use taxes, plus interest accruing daily.
Slattery said the former Jack’s property’s status is now that of “non-performing asset.” He said another company, CW Capital, has been contracted by Wells Fargo to handle disposition of the property.
Robert Collins, a La Jolla landlord and real estate developer, said the unsuccessful public auction was held Oct. 22 at the East County Courthouse to try and dispose of the former Jack’s property.
“Because of no bidders, they offered it at about 50 cents on the dollar,” said Collins, who felt there was little interest in purchasing the property “because of the economy” and because its value “has been so diminished by the work done to create the restaurant.”
Slattery said the Jack’s auction was a public process.
“A notice of trustee sale had to be sent out,” he said. “They tried to auction it off to the highest bidder.”
Slattery said it was his understanding the outstanding debt owed by Jack’s was approximately $7.2 million.
“That’s just the building,” he said. “ Berkeley didn’t own the land. It is a ground lease.”
Slattery added the outstanding debt owed by Jack’s including penalties and interest was $7,832,481.77 as of Oct. 22.
In the five months since Jack’s closed July 30, most of the tenants have left.
“All but three tenants have vacated,” said Slattery noting the building originally had 15 to 20 tenants.
When Jack’s created its three restaurants, it consolidated the space where eight to 10 tenants had been previously.
Said Slattery: “They (Jack’s) took the whole third floor which was office space.”
Those tenants who are left are in a difficult position.
“They’re left without a major anchor or draw,” said Slattery. “There’s no activity coming in there.”
Though the former Jack’s site at 7863 Girard Ave. is in a prime spot in the Village, Slattery said it has traditionally been a difficult space to redevelop.
“The building is functionally obsolete in terms of its design,” he said, noting it’s a single-purpose building meant to be anchored by a major tenant. “It’s always been a difficult building to lease because it has multi tenants and is not at street level. It could sit vacant for a long time — even if you lowered the rent.”
Slattery said a major design change of the building reconfiguring it to convert it back to office use might be necessary to make it more attractive to retailers.
Two of the three remaining retail spots at 7863 Girard Ave. — Lawrence Poon jewelers and Realty Experts — said their business had been affected little by Jack’s closure.
“Walk-ins has been impacted but that is a small portion (10 percent) of the total business,” said Jim Bennett, Realty Experts broker, who added, “The building is dark: It looks closed.”
Lawrence Poon, a custom-design jeweler and 23-year building resident, noted there have been seven different restaurants there and “none of them have survived.”