When downtown Menomonie awakens on Sunday morning, there will be one less college bar on Broadway opening for business.
During a special meeting Friday afternoon, the Menomonie City Council unanimously voted to deny the transfer of The Rehab from David Zempel of Loren Corp. LLC to Elizabeth Hart, COO and CFO of Synergy on Water LLC, which owns three bars in Eau Claire.
On April 12, Menomonie police acted on a tip from confidential informants about underage activity at Rehab bar, 631 Broadway. Aided by University of Wisconsin-Stout police and Dunn County sheriff’s deputies, MPD officers issued an unprecedented number of tickets, including 45 underage drinking citations.
After the council voted not to renew Rehab’s Class B beer and liquor licenses at its May 21 meeting, Zempel — the sole agent for Loren Corp., which owned the bar — requested a special hearing to plead his case. The council, however, stood firm on its original decision following the hearing on June 11.
A week later at its June 18 meeting, the council learned about a letter from Rehab owner David Zempel alerting them that he would surrender the license before it expires on June 30 contingent on it being granted to Elizabeth Hart of Synergy on Water LLC.
About the motion
After making the motion to deny the Class B beer and liquor licenses in motion, Mary Solberg thanked Menomonie Police Chief Eric Atkinson for the thorough background check provided to the council in response to Hart’s application for the surrendered license.
The findings, she said, infuriated her: “I find it unimaginable that they would think that this body would be in favor of this transfer...
“We didn’t fall off the turnip truck yesterday,” Solberg added. “But it was because of the background checks and the many past and present issues that have happened that I am basing my motion.”
Based on the five-page background report compiled by investigator Kelly Pollock, Menomonie Police Chief Eric Atkinson recommended that the council deny Synergy on Water’s application, a recommendation that was echoed by UW-Stout Chancellor Bob Meyer.
In a memo, Meyer expressed his concerns about the proposed transfer to an Eau Claire group he said is “associated with establishments that target college students with drink specials [and] would perpetuate the current high-risk drinking culture that exists at the Rehab.”
Although Hart had only one traffic contact on her record, her husband, Jared (Jed) Hart — who as also been known by more than two dozen other names — was charged and federally convicted in 2014 of tax fraud that took place in from 2008 to 2011 in regard to The Pickle of Eau Claire.
Eau Claire police provided a list of complaints associated with The Pickle and the Pioneer, most of them reported or witnessed by Jed Hart. Included in the violations were battery, drugs, disorderly conduct, counterfeit money, theft, check person, death, and parking issues.
Janessa Stromberger, assistant city attorney for Eau Claire, told Pollock that in the past few years since Jared Hart was released from prison, “his establishments had been more cooperative and easier to deal with.”
Stromberger added that Jared Hart is not allowed to hold a liquor license in Eau Claire because of his past conviction.
Shortly after being provided a copy of the background report, Elizabeth Hart and her father, Leo Giannola, CEO of Synergy on Water, told the council that it contained what she called “serious misrepresentation. ... This is not who we are.”
Giannola said, “When you have young’uns, you’re going to have some foolishness. We don’t tolerate foolishness at our establishments. We work very closely with the city of Eau Claire to minimize that activity.”
In the business plan Elizabeth Hart submitted to the city outlining the family’s plans for the future of the Rehab, she promised a complete rebrand including a name change of the bar, with a focus on their signature “fun, safe and clean” atmosphere they provide at their Eau Claire establishments.
Additionally there would be a change in management protocol, a new point-of-sale system, state-of-the-art surveillance equipment, an employee contract outlining policies and procedures, and team uniforms to differentiate them from customers.
Asked about their relationship with Zempel, Giannola said that “tenant/landlord” was the extent.
Regarding the connection between Rehab and its previous iteration as The Pickle, Giannola said that the Harts owned the bar before selling it to Zempel.
Elizabeth Hart explained that Zempel had been the manager at Menomonie Pickle: “We sold the bar to Dave Zempel in hopes that he would be successful, but clearly that has not been the case. But we were here, and you liked us when we were here.”
Giannola added, “And it was Mr. Zempel who changed the persona of the business — name change ... the entire way he ran it.”
Elizabeth Hart noted that the sale of the business and building was done on a land contract on which Zempel has since defaulted. The tax bill remains in their name.
Asked about The Pickle’s record when it was in Menomonie, Chief Atkinson said that there were disturbance complaints: “That area of our downtown — whether it’s been The Rehab, The Pickle or Off Broadway — has been an issue for the Menomonie Police Department for quite some time. It’s where a lot of students will gravitate at night.”
As for who initiated the idea of transferring the alcohol licenses, Elizabeth Hart said that as the legal owner of the building, the closing of Rehab has put the family in significant financial hardship.
“We no longer have a tenant or a license or a way to find a tenant or run the bar ourselves.”
Noting that the council was faced with the consequences resulting from a bad situation, Mayor Randy Knaack said, “It’s a tough situation for everybody involved ... the owners of the establishment, the owners of the property, for council members. We don’t want to shut businesses down. We want them to thrive and do well.”
Pending an appeal, the former Rehab Class B beer and liquor licenses will become available as of July 1.