Old Pueblo Grille has a new owner two months after a federal bankruptcy court seized the restaurant from Bob McMahon as part of a prolonged legal tussle over his 2014 bankruptcy.
But the sale might actually put McMahon back in business at the restaurant that he opened in a historic home at 60 N. Alvernon Way in 2000.
The new owner, HSL Properties, is looking for someone to run the restaurant to complement its neighboring La Quinta Inn and Suites, at 102 N. Alvernon Way. McMahon is among the operators being considered, said HSL Executive Vice President Omar Mireles.
“He’s operated (Old Pueblo Grille) successfully for many years so that is certainly someone we’re still considering,” Mireles said.
HSL, which owns and operates hotels and apartment and residential complexes in Tucson, Yuma and the Phoenix area, finalized the $1.2 million sale on Friday.
Old Pueblo Grille has been closed since a U.S. Bankruptcy Court judge seized it and McMahon’s namesake north-side steakhouse on May 29. Both restaurants were at the center of McMahon’s 2014 Chapter 11 bankruptcy listing its largest creditor as Alliance Bank of Arizona, to which McMahon owed $5.2 million. The bankruptcy was converted to a Chapter 7 — calling for liquidating the assets — in early May after McMahon failed to pay $14,375 in quarterly fees.
Alliance now owns the steakhouse and the adjacent office complex, both of which are on the market.
McMahon’s attorney Scott Gibson on Wednesday said he has not been in contact with Alliance and doesn’t know what is going on with the steakhouse. The 150 full- and part-time employees of both restaurants also have yet to be paid, McMahon said. When the court seized the businesses, it also took control of bank accounts that McMahon contends had $180,000 combined that he said could have been used to pay the employees.
Mireles said there is no timetable to reopen Old Pueblo Grille, adding that much will depend on how much work the operator wants to do to the restaurant. He said the 8,147-square-foot building is “in good shape structurally,” although the kitchen will likely need upgrades.
Mireles said that while McMahon is in the running, “that’s not necessarily the route we’re taking” with the restaurant. HSL also has been in talks with national chains and other Tucson restaurateurs.
Gibson said McMahon could “be the person who can open the doors tomorrow if he got a lease,” but when asked if he wanted to return, McMahon said he wasn’t sure.
“We’ll see,” he said. “I’m not sure what I’m going to do.”
Mireles said HSL’s goal in buying the property was to continue operating it as a restaurant.
“We have the hotel there and our offices are next door as well and that was our local watering hole,” he said of Old Pueblo Grille. “Our interest was in making sure this was a restaurant in the long run.”
