This guy will razzle-dazzle them. That's what Hollywood officials thought when they offered a young chef named Michael Blum a $150,000 grant in 2004 to open a trendy restaurant in the city's downtown district. Blum's eponymous Michael's Kitchen in Dania Beach already had a loyal following that fawned over his wild presentations and funky fare. Blum, the city brass thought, was exactly the sort of businessman that Hollywood needed to energize downtown nightlife.
Blum too was stoked. He talked about creating dishes worthy of a modern-day Frank Sinatra and of becoming the next Wolfgang Puck. He'd reinvent flatware, serving staples like tuna tartare in a martini glass on top of a huge floor tile. His kitchen would be open, like a theater stage; his performance would have lots of flash and maybe even some hocus-pocus. Patrons hooked on TV shows like Iron Chef loved spying on the chef. But the show ended in August, when the restaurant folded. And several former investors say they got scorched.
The locale at 2000 Harrison St. still bears Blum's name and motto: "The cure for boring food." Inside, the place looks like a hot, hard-partying debutante nursing an extended hangover. Flat-screen TVs, an elaborate Lucite wine room, and jars full of jelly beans are visible from the sidewalk, as are empty champagne bottles and dusty window blinds.
Phyllis Rudolph stares into the Harrison Street joint and shakes her head with disappointment. "I used to walk in here," she remembers, "and they [the Blums] would say, 'This woman saved our lives.' They put on a big front, promised the world."
The 76-year-old says she loaned Michael Blum and his wife, Jennie, $130,000 — her life savings — in early 2006 so they could pay money owed to the IRS. It was a risky decision, Rudolph admits, but the Blums were friends and about to lose their home. Plus, they promised her 10 percent interest when Rudolph's certificate of deposit was earning 6 percent at the bank. At first, the loan seemed solid. Then, she says, checks began to bounce or arrive late. The payments ceased in mid-2007.
Looking back, Rudolph thinks the Blums never intended to return her investment. "I trusted them," she says, wringing her hands as her eyes begin to tear up. "I feel stupid now."
Rudolph isn't alone. Steven Schnitzer, a restaurateur from Miami Beach, filed a lawsuit last year against the Blums to recover $100,000 he loaned the couple in late 2004. Then there are shareholders like Bobby Hamilton, a defensive lineman for the Cleveland Browns, who paid $250,000 for a 20 percent stake in the now-defunct restaurant. And the City of Hollywood.
The Blums respond to charges like these with regret but with pained references to the unforgiving realities of the restaurant business.
Jennie Blum cites a rent increase and surprise tax bill for the Hollywood restaurant's demise. "It was always our intention to make good on any monies due," she says. "Circumstances change, unfortunately." The individuals who loaned that venture capital, she says, shouldn't expect to get their money back.
The restaurant business is fickle, with 90 percent of businesses failing, Blum says. Everyone knew the risk. "Our investors, they're not stupid people. They're very accomplished in their own ways," she says, adding that she lost "quite a bit" of her own money on the Harrison venture. The Blums have also rebuffed the City of Hollywood's attempts to collect a $120,000 penalty for failing to keep the restaurant open at least ten years. The Blums feel that their investment of roughly $500,000 in the locale, which can be passed on to the next tenant, should more than cover their obligations to the city.
Neil Fritz, executive director of downtown Hollywood's Community Redevelopment Agency, says the city is likely to pursue collection if the grant isn't paid back soon.
Some say the Blums' poor money management was the real downfall of Michael's Kitchen on Harrison Street. Andreas and Asimina Savvides are part owners of the 11th Street Diner, a popular, stainless-steel, vintage greasy spoon in South Beach, who met the Blums on a cruise junket for Sysco Food Services customers. In 2004, the Savvides partnered with the Blums to open Michael's Kitchen on Harrison Street. The relationship quickly deteriorated.
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According to a declaration the Blums filed with Sysco in mid-2005, the restaurant was showing monthly sales of $180,000. But the Savvides perceived financial mayhem, and in early 2006, they sued the Blums to get their $132,000 investment back. They alleged, among other things, that the Blums used restaurant revenue to pay $50,000 in unrelated credit card debt and to make monthly payments on a $200,000 loan from Michael's father, Richard. Meanwhile, the Savvides said, a restaurant manager dipped into his own pocket on several occasions to pay employees and vendors. The Blums and the Savvides settled the dispute through mediation, and the Savvides got close to $100,000 back.
In November 2006, the Blums filed for bankruptcy. They listed Richard Blum and the Savvides as creditors — but not Phyllis Rudolph, Steven Schnitzer, or Bobby Hamilton. They also stated that they owed $150,000 to Inland Southeast Property Management for breaching the terms of a lease at the original Michael's Kitchen in Dania Beach.
The latest incarnation of Michael's Kitchen opened in late 2007 at the Newport Beachside Resort in Sunny Isles. And it's thriving. But this time, Blum doesn't have to worry about the rent or paying vendors on time because the hotel is handling the books; he gets a minimum draw and a share of the profits. Robert Cornfeld, whose family owns the Newport, says he doesn't worry about Michael Blum either. "He's hard-working, honest, talented, personable, trustworthy. I'm surprised" — sigh — "that certain people feel they're not going to get a fair deal from him."
At the Newport, that old razzle dazzle is still in chef Michael Blum's kitchen. It's still the sort of venue where a skirt steak might wrap around a corn cob like a sheet that suspends a Cirque de Soleil acrobat in midair. Or where a fillet of salmon can plunge into flames and emerge ablaze but still moist and palatable.