Thursday May 5, 2011

PITTSFIELD -- The owners of Jae's Spice and Shabu 297 have decided not to renew their lease with local restaurateur Jae Chung and will re-open next week under different management.

Both restaurants closed on Tuesday night. Joyce Bernstein, who co-owns the North Street building that houses both eateries, said Jae's Spice will re-open on Thursday, May 12, as Spice Dragon. A sign on the front door of the restaurant Wednesday said the restaurant will be closed until May 12 for "spring cleaning."

Bernstein said she isn't sure when Shabu 297, an Asian-style restaurant that opened in February, will re-open.

"We're going to make some changes there," she said.

According to Chung, the two restaurants combined had close to 70 employees. Chung said he notified the staff on Tuesday night that the eateries would be closing. He said staff members were more sad than shocked when they heard the news.

"We worked here for three years and had fun," Chung said. "It was like a family."

Bernstein said some of the current staff will be rehired, while Chung planned to take some employees with him because he plans to open a restaurant elsewhere.

The new operators of Spice Dragon are brothers Huy Huynh and Phang Huynh, who own 20 Railroad Street in Great Barrington and the Dragon Steakhouse on West Housatonic Street.

Bernstein said she and her business partner Lawrence Rosenthal chose the Huynhs because they want to maintain the Pan-Asian cuisine that Chung instituted.

"It will certainly allow us to bring more Vietnamese food into it," she said.

The Huynhs could not be reached for
comment.

Chung, who also operates restaurants in Brookline and Boston, received a three-year lease when he opened Jae's Spice in the summer of 2008.

"I tried to extend [the lease] a little," he said on Wednesday. "But they wanted to go in a different direction."

Although the restaurants closed abruptly on Tuesday, Chung said discussions regarding a new lease had taken place for some time.

"We've been working on it for the last couple of months," he said.

He described the decision to part ways as amicable.

"Joyce and Larry have been very good to me," he said. "I had a great three years."

Chung ran into financial trouble in 2009 when three Berkshire County buildings that he owned, including eateries in Adams and Williamstown, were sold at auction. According to documents on file at the Middle Berkshire Registry of Deeds, Chung owes thousands of dollars in federal and state tax liens that have been placed on Jae's Spice Inc. The majority of the money that Chung owes is for meals taxes.

Although some of the liens are current, both Bernstein and Chung said the liens also involve funds that Chung owes from his other business ventures. The liens have been placed on Jae's Spice Inc., not North Street Marketplace, which is Bernstein and Rosenthal's holding company.

Chung said the liens had nothing to do with the decision not to renew his lease, and that he plans to pay what he owes within the next few weeks. He has paid $26,700 to the state in back tax revenue since October, the documents on file at the registry indicate.

Bernstein declined to comment on the liens.

Chung said he plans to re-open a restaurant at a different location, under the name "Jae's" or "Spice," but he's not sure where yet.

"I don't know what's out there," the North Adams native said. "I like the Berkshires. My daughter's here."

Bernstein and Rosenthal were the original operators of Spice, which opened in 2006. But they closed the eatery 22 months later due to financial problems that Rosenthal said at the time resulted in losses of $1.2 million. Two months after they closed in March 2008, Bernstein and Rosenthal leased the space to Chung.

Chung said Jae's Spice was a "huge place to run," but that he was "breaking even."