Stennes: Whitey’s sold to area buyerThe auction of Whitey’s Cafe on Sunday went fast, say those with seats at the bidding in the legendary but failed-of-late restaurant and bar in downtown East Grand Forks.
By: Stephen J. Lee, Grand Forks Herald
The auction of Whitey’s Cafe on Sunday went fast, say those with seats at the bidding in the legendary but failed-of-late restaurant and bar in downtown East Grand Forks.
Only a handful of bidders was invited in, although at least one other was turned away at the door because he hadn’t set up an invitation earlier.
David Gerszewski, a partner with Greg Stennes and Wayne Davis, organized and conducted the oral auction, scheduled for 4 p.m. Sunday.
A native of East Grand Forks who is now an entrepreneur in England, Gerszewski returned to organize and conduct the auction. He’s the son of Lyle Gerszewski, who bought Whitey’s Cafe nearly 40 years ago with Stennes and Davis.
“He took over his dad’s stock fairly recently,” Stennes said Sunday.
More bidders would have been better, but he’s pleased, Stennes said.
“I’m really happy and optimistic that there are people interested,” he said.
Stennes said he can’t say much yet about the new owner until “we get professional people to look at all the documents.”
But all the bidders were knowledgeable and well-capable, he said.
The new owner “is from the area,” and interested in “carrying the flag,” as in keeping Whitey’s tradition and name, Stennes said.
He expects it will be only months before Whitey’s is again open, Stennes said.
Gerszewski turned away news reporters Sunday, including a television team from Fargo. He said it would be up to the winning bidder to go public.
Dennis Blackmun, an owner of Joe Black’s bar and grill in downtown Grand Forks and part of a family that goes back decades in the restaurant and bar business in Grand Forks and East Grand Forks, was one of the bidders.
As he left, he said it “was over in minutes.”
The winning bid was the only one made and was at the previously announced reserve price of $650,000, Blackmun said.
He took part only after making clear that the option of lowering the reserve price had to be on the table, Blackmun said.
Another man who said he was part of a partnership involved in the bidding, confirmed that only a handful of bidders took part.
Closed since Feb. 8, when short-time owner/manager Dave Norman turned the keys back to Stennes, Whitey’s reputation was evident by the interest from passersby on a sunny Sunday.
Several people, walking by to a movie, maybe, at River Cinema 12, or to Cabela’s, or the other restaurants within a block of Whitey’s, noticed the place again seemed open and tried to walk in.
“That happens all the time,” Stennes said. “I check on the building daily and people come by and rattle the door and sometimes I stop out and visit with them.”
But Sunday, only approved bidders or owners were allowed in.
Todd Gregoire, owner of Todd Enterprises in East Grand Forks, asked Gerszewski if he could get into the bidding shortly before it began.
But because he hadn’t arranged details beforehand, he was turned away.
According to a website set up by Gerszewski, www.whiteyscafeauction.com., it was necessary to preregister, in effect, to demonstrate one had the wherewithal to meet the reserve price of $650,000, among other details.
The terms of the auction, set up by Gerszewski, included paying 10 percent of the sale price Sunday and closing the deal by June 15.
The auction included everything inside the two-level restaurant, including seven apartments on the building’s second floor that generate about $36,000 annually in rent, according to Gerszewski’s web site.
With a little renovation, the apartments might bring double that rent level, according to the web site.
Gregoire said setting a minimum bid that high seemed a mistake to him. He said since the event had been advertised as a public auction, he expected to be able to walk in.
Still, he is, like thousands, a longtime customer of Whitey’s who wants to see it open again, Gregoire said. “I (went) there two, three times a week for lunch,” he said.
One longtime downtown East Grand Forks businessman parked across the street just to watch the comings and goings Sunday, hoping to get a hint of who the new owner might be.
“I want to see what’s going to happen to Whitey’s,” he said, asking that his name not be published.
A customer for decades, the businessman said he remembers when Whitey’s was bustling by day and far into the night, and known as “the best place in town” — meaning East Grand Forks and Grand Forks — to get steak and seafood. It would be nice, he said, to see that again.
Opened by Whitey Larson in the 1930s when East Grand Forks had a reputation for wild nightlife, Whitey’s built a regional reputation based on good food, good service and its classic Art Deco look.
Stennes, who went to work for Larson in 1968 and bought the place five years later, has said that in recent years it became more difficult to make the business go.
The Flood of 1997 knocked out Whitey’s building, and Stennes first planned to move Whitey’s into the former Aaker’s Business College in downtown Grand Forks, even buying the building.
But East Grand Forks civic leaders persuaded him to stay and move Whitey’s a few steps east to its current abode.
It seemed to work at first.
But the flood’s long-term effects seemed to change customer habits, partly because the rebuilding in both downtowns added restaurants and bars, especially on the Grand Forks side. Customer traffic maybe was up in both downtowns, but so was the competition, Stennes told the Herald a year ago when he announced he was putting it up for sale.
Dave Norman, who grew up in Grand Forks and formerly owned a Grand Forks radio station and restaurants in Detroit Lakes, Minn., and Fargo, bought Whitey’s last summer with several partners.
Stennes and his partners remained the landlords.
Norman changed the name to Whitey’s Steak and Seafood — echoing the name of a Fargo restaurant he was a partner in for a time — and introduced new features.
But it was clear business didn’t improve greatly. Service and menus declined in the months before Norman finally walked away, leaving the keys again with Stennes three months ago.
Norman told the Herald in February that Whitey’s had lost money for two years or so before he bought it and he couldn’t turn the corner amid the stiff competition.
In the last weeks before it closed, Whitey’s — once famous for its array of beers domestic and imported — was down to three basic domestics, a bartender said.
“We ran out of food last week,” the bartender told the Herald in January.
A former employee told the Herald that many employees didn’t get their last paycheck from Norman.
However much it was expected, the closing in February hit longtime customers hard and generated many online comments on news stories about the closing in newspapers in North Dakota as well as the Twin Cities.
Having to sell Whitey’s twice in less than a year after being one of only two owner/managers in its first eighty years, Stennes acknowledged Sunday he has special reasons to be glad the iconic establishment soon again will be a well-lighted place.
But many are glad, he knows, because he hears from them all the time.
“The city has the same interest as the rest of the community does: They want to see that corner viable and lucrative again.”