LAWRENCE — One Mill Street, the 19th century textile company headquarters that became an upscale restaurant in 2000, is for sale again after the New Hampshire partners who bought the business 18 months ago parted ways amid financial troubles and legal wrangling.
The restaurant, operating under the name Marco's on Mill Street, has been closed since late May.
That's when police, lawyers, the feuding owners and even a dismayed bride-to-be converged on the building as keys to the front door were transferred from the family managing the restaurant to the lawyer who manages the building.
"It looked like it was going to be a worthy enterprise," said Harry Starbranch, who bought the property in late 2006 with his law partner, Stephen Jeffco, and Edith Maroun, the matriarch of a family with deep roots in Lawrence.
Now, however, "it's a mess," said Edith Maroun's son, Nicholas Maroun.
The partners went into business together "all for one and one for all," said James Roche, a Lawrence attorney representing the Marouns. "Then things went bad."
The stately three-story brick building is now for sale for $1.8 million.
Real estate broker Tom McGuirk of Hampton, N.H., said he began showing the building earlier this month to potential buyers, who he said include restaurateurs and investors who want to return it to its original use as an office building.
Any decision about the building's future will be watched closely by city leaders and neighboring property owners. The restaurant is in a critical location in the heart of the Canal District, where other old mill buildings are being converted to office, retail and residential use.
Tom Schiavone, the city's chief economic development officer, said One Mill's location and beautifully restored interior mean "it won't remain vacant for long."
The question for prospective buyers is how to bring life back to a once-thriving business that has struggled in recent years. The experience of the most recent owners could be an example of how not to do it.
From offices to eatery
The building began life as the headquarters of the American Woolen Co. at the turn of the last century.
Charles Daher of Commonwealth Motors purchased it in 1999 for $210,000 and spent more than $1 million to renovate the dilapidated property — "We gutted the whole thing and put in everything new," Daher said.
Daher opened it as One Mill Street in 2000, with a restaurant and bar on the first floor, a dining room on the second and a function room on the third. It was a hit, drawing 400 to 500 customers a day on weekends.
"It was a great business when it was One Mill Street," Daher said.
Daher ran it for five years before he and his family tired of the restaurant business. In 2005, he sold the business to Paul Gumbrecht of Tewksbury — but kept the building. Gumbrecht went out of business in less than a year.
Just before Christmas 2006, Daher sold the building and business to Starbranch and Jeffco and the Maroun family.
Jeffco said, at the time, he had always wanted to be involved in the restaurant business. He said the new restaurant would be a "fantastic asset" in the redevelopment of Lawrence and predicted that in 10 years the property would be worth "three to five times what we paid for it."
The Marouns and the two lawyers shared more than an interest in a restaurant.
At the time of the purchase, George Maroun Jr., another son of Edith Maroun, worked as an associate in the Portsmouth, N.H., law firm of Jeffco, Starbranch and Soldati.
There was another legal connection.
Jeffco represented another Maroun brother — Douglas — in 2006 when he was charged with shooting his 25-year-old girlfriend, Charissa Maher, in the face inside her Windham condominium.
She was found bleeding in her locked condo after Nicholas Maroun called 911 and said that Maher had grabbed the gun from Douglas Maroun and shot herself.
Maher survived but was left unable to testify against Douglas Maroun. Within months, all charges were dropped by prosecutors, who lacked sufficient evidence.
Members of the Maroun family had been involved in other legal problems in New Hampshire while running a nightclub in Manchester.
The Omega Nightclub, run by George Maroun Jr., his two brothers and their father, was plagued with violent incidents, including a shooting and a triple stabbing. The New Hampshire Liquor Commission stripped the club of its license in February 2006 after dozens of police calls and arrests over the years.
Despite that, the Marouns and their partners were able to get an alcohol license for their new restaurant in Lawrence.
Jeffco, who was listed as manager of Marco's on its liquor license application, said at the time there was no plan to make Marco's a nightclub appealing to a "hip-hop crowd."
"We'll be targeting an older, more prosperous crowd, and there's going to be a dress code," Jeffco said last year. "The Omega Club has nothing to do with One Mill Street."
But that plan changed, and relations between the Marouns and Starbranch and Jeffco began to sour.
'Infighting' dooms venture
Complicating matters was the ownership split.
Ownership of the real estate was split 50-50 between Edith Maroun and law partners Starbranch and Jeffco. But ownership of the business was split 60-40, with the Edith Maroun and son George Jr. with 60 percent.
As a result, the Marouns were calling the shots when it came to running the restaurant but Starbranch, as co-owner and trustee of the realty trust that owned the property, was calling the shots when it came to the building.
Problems began shortly after its February 2007 opening.
Jeffco's son Scott was working as a chef at the restaurant but, according to Starbranch, was forced out in June 2007, and the Marouns decided to open a nightclub they christened Canvas.
"They threw my partner's son out of the business and decided to go in the direction of the Canvas nightclub, which has a striking similarity to Omega," Starbranch said.
About the same time, George Maroun Jr. left the law firm.
As the rift grew, Starbranch and Jeffco found it difficult to manage their investment.
"We were not permitted to run the restaurant," Starbranch said. "We had no input. We couldn't bring accounting people in; we couldn't even get access to the building. The only contact I was getting was from bill collectors looking for someone to pay them."
According to Starbranch, the Marouns also failed to pay rent.
The Marouns declined to discuss the reasons for the falling out, but Nicholas Maroun confirmed there was a schism.
"There's a difference in opinion between the shareholders in how to go forward," he said. "We all have a different opinion of what's transpired."
He added: "The business failed because of infighting."
The Marouns sought bankruptcy protection for the business. The proceedings were later dismissed, but on May 22, a court-appointed receiver took the keys to the buildings from the Marouns and handed them to Starbranch, under the watchful eyes of police, sheriffs' deputies and bankruptcy court officials.
Also watching was a Methuen bride-to-be whose wedding and reception had been scheduled at Marco's. (The Marouns returned her deposit and offered to help her find a new site in Lowell, but in the end she opted for the nearby Salvatore's Restaurant and Function Center on Merrimack Street.)
The legal woes continue.
Starbranch says he is owed nearly $200,000 in back rent, a claim the Marouns and their lawyer contest.
Enterprise Bank, which had put up $1 million to finance the purchase, started foreclosure proceedings, but a spokesman said that is on hold as the bank tries to reach an agreement with the owners. Daher holds a $500,000 second mortgage.
The hope is that proceeds from the sale of the building and business will repay creditors and investors.
Nicholas Maroun said he hopes that happens soon.
"We just want it to end, and end fairly," he said. "My mother refinanced her house to do this. She thought it was a great investment in Lawrence."
