Cocktail was empty and silent Tuesday afternoon except for the hum of the lighting fixtures above the warmly-lit onyx bar top. Owner Geno Zaharakis disappeared into the back of the shuttered Boystown mainstay with his husband, Dusty Hoffman, for a few moments. When he returned, he was breathless.
“I just found out. It looks like we’ve got our funding,” Zaharakis said, taking a stool near the corner of the bar. “Oh my god, we’re going to get our funding.”
Over two months after closing their doors, Cocktail Bar & Restaurant, 3359 N. Halsted St., plans to reopen Feb. 10 at 8 p.m.
Initially, Zaharakis aimed for a similar date early this month, but was careful not to say so until he secured funding from a lender to help pay off taxes owed to the state. With a payment plan in place, the state has issued them a new license.
“We’ve been working on funding for this place for a year,” he said. “The positive thing is us getting back open. I want to put all of the people who have worked here for years back to work. More so than anything, I want to get open for them.”
Cocktail was forced to close Nov. 28, when the state revoked its liquor license due to unpaid taxes. Reports from other media outlets pointed to an early January reopening and mid-January grand reopening party. When Cocktail remained closed into the end of the month, community concerns persisted.
Speculation started in December, weeks after the bar was closed, with rumors that the bar had simply gone under, or that they lost their liquor license for reasons unknown. What really happened, according to Zaharakis, was a series of challenges from the city, the state and later, his best friend.
Now, with the new support of a lender, who he declined to name, Zaharakis plans to open Friday — as soon as he possibly can.
He had only one word to say when Hoffman broke the news to him.
Working with ‘the city that works’
“It’s been an amazing experience being in this community,” Zaharakis said, looking back on when he first opened Cocktail in 1996.
“When we got this place, it had been closed for two years, and I can’t even begin to tell you how many electrical extension cords we found in the ceiling. It was like 142,” he said. “Put together, it could have circled this whole neighborhood.”
From there, Zaharakis and his partners worked to build Cocktail into a Boystown bar destination, but it took a year for them to get a liquor license, one of the first of many challenges they faced with the state and the city.
“It was a shock to us,” he said. “Usually those things don’t take that long, but it took us a year to get our liquor license.”
In an effort to save money, Zaharakis decided not to continue renting the back section of the building, utilizing an option they had in their lease. Even though Zaharakis wanted to keep the back space, he and his business partners had to make the tough decision, he said. In 2010, he reacquired the space.
“For 15 years, I had to wait for that back space because it’s always been something. It was a dry cleaners, it was a pizza place, it was a deli, then another pizza place, and then I finally got it a couple years ago,” he said. “I was thrilled, so I wanted to expand Cocktail and get food and an outdoor patio and another bar space — connect the two spaces, and so we did.”
With the help of friends and his employees, Zaharakis started the expansion July 1, 2010, adding a 1,192 square foot outdoor patio along Roscoe Street, a full-sized second bar space and more seating for the additional food business. They had finished much of the construction by July 28, according to Zaharakis, when the city stepped in and requested a building permit due to new codes that required rights outside of what is normally allowed under replace and repair construction. This included having the basement ceiling fire rated, which cost $20,000.
Set back by costs, construction going over, delays for city permits and lost revenue, Cocktail was challenged by working with “the city that works,” Zaharakis joked. “Everything passed code that Oct. 29, when we got inspected and then it took us a couple months to get going and stuff.”
Just as the bar was catching up, the Ill. Department of Revenue randomly audited Cocktail’s sales taxes and financials. In the audit, the state went back three and a half years and calculated taxes due on liquor donations and complimentary drinks that Cocktail made to customers, employees, political campaigns and various charitable causes, including T-PAN, Howard Brown Health Center and the victims of the Scarlet fire, according to Zaharakis. They were charged a 7 percent Use Tax for everything they donated and gave away.
“They determined a number and then the day we got the number we had eight days to pay it because the city was having an amnesty period,” said Zaharakis. “If we paid by Nov. 8, then there would be no interest on the audit. But if we paid by Nov. 9, then it would be doubled. It was a lot.”
By that point, Cocktail was behind.
“It all totally snowballed. And with the audit coming through and us not being able to pay by the end of the amnesty period, it doubled,” he said. “If the city had given us our license in August, when it really should have been, I could have had some revenue and all of this other crap would not have happened. The audit could have happened and we could have focused on it. And so that’s why we’re kind of in the position we are in now.”
That, and an argument with his general manager, David Sikora, which led to another challenge for Cocktail.
A falling out, a lawsuit
On July 29, 2011, Zaharakis and Hoffman filed a lawsuit in Cook County Civil Court against former Cocktail general manager David Sikora, the property’s owner Robert Brumbaugh Jr. and Alexander Stoykov, a real estate broker connected to Cocktail through Brumbaugh’s company and his former position as a Cocktail “go-go” dancer.
The suit alleges that Sikora, Brumbaugh and Stoykov used their positions as landlord, property manager, former general manager and former “go-go” dancer to try to put Cocktail out of business and take over the valuable space at the corner of Halsted and Roscoe streets to start their own bar called “Sikora’s,” according to the complaint.
Specifically, the complaint alleges that in an effort to put Cocktail out of business, the defendants destroyed Cocktail’s relationship with its lender, defamed Zaharakis orally and in writing, trespassed on the premises to destroy property and relationships among Cocktail employees and inflicted emotional harm on Zaharakis, among other things.
In the suit, Zaharakis and Hoffman ask for at least the total value of Cocktail ($2.5 million) in damages, in addition to punitive damages of $7.5 million, for each count listed.
The battle in court stems from Zaharakis’ and Sikora’s falling out in 2010.
Zaharakis said the fight was over “the dumbest thing in the world.”
“We were having problems with the city getting the correct building permit. I was supposed to meet David at noon and I called him and said, ‘We’ve been down here at the buildings department office since like eight in the morning, and I still have to be here,’” Zaharakis said. “And for some some reason, he flew off the handle and said ‘You’re never where you’re supposed to be!’ and then he quit.”
In June 2011, Brumbaugh Jr. purchased the building comprising Cocktail’s space and the residential units above with his company, 3357-59 N. Halsted, LLC., for just over $1.8 million, according to a record from the Cook County Recorder of Deeds.
“All of a sudden, I feel like I’ve been put on the defense,” Zaharakis said, because they’ve been very vocal around town telling people, from what I’ve been told and the affidavits we have, ‘Oh you know, we’re gonna own that bar. We’re gonna close it.’ And it’s just shocking because you don’t do that to people in the neighborhood and to family.”
“David and I had a fight. David and I should have gotten over it. David and I should have talked. He was family.”
Sikora did not return calls for comment. Repeated attempts to reach Brumbaugh were also not returned, and an attempt to reach Stoykov was unsuccessful.
The next hearing of the case in court will be Feb. 16.
Early this week, while Zaharakis and Hoffman were anxiously awaiting a deal with the state for a new liquor license, they came across a number of homeless people under a bridge when they were out walking their dog. Zaharakis was struck by the people in need, and decided to focus his attention on helping them.
They returned to Cocktail the next day and cooked several packages of hotdogs they had stored away in their freezer, put them in brown paper bags, and took to the streets to distribute the food to anyone they could find who were in need.
He said the experience changed his life, and Zaharakis and Hoffman continued to prepare more hotdogs, hamburgers and peanut butter & jelly sandwiches and go out every night to repeat their newfound way of giving back. Over the course of three days, they handed out over 150 meals.
In the past, they had focused on providing drinks to charitable organizations (part of what got them in trouble with state) and donating anything they could to other businesses in the community.
“When we did our first renovation, we donated all of our furniture to Brown Elephant because they are part of our community,” Zaharakis said. “One of the many reasons why I said ‘karma’ is because we are good people. We’ve done a lot of good things and the universe is paying us back in a very proper, lovely way.”
Zaharakis said that as Cocktail reopens and he gets back on his feet, he will focus all of his support on helping the homeless.
“You take care of your neighbors,” he said.
Shortly after the news about his funding hit him, Zaharakis stepped behind the bar, but not to pour himself another glass of wine. Instead, he dimmed the amber lights in the room, grinning.
“Now that’s better.”