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A minority-owned business struggles in the Seaport

By and Globe Staff 

Lane Turner/Globe Staff

Luis Maggioli (left) and Pedro Alarcón, of La Casa de Pedro in the Seaport District, are fighting with their landlord to keep their Congress Street space even as their debt mounts.

A rising neighborhood. The prospect of tourist dollars. An opening to offer a new cuisine.

In the Seaport District, what seemed like a promising opportunity for a minority-owned restaurant is now in peril, amid complaints from neighbors, the high cost of rent, and realities of the district.

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La Casa De Pedro, a Venezuelan restaurant on the first floor of a luxury residential building on Congress Street, has amassed $3 million in debt over its first 18 months in business, and now the owners are fighting with their landlord to keep their space. According to the owners, Pedro Alarcón and Luis Maggioli, residents in the building complained that their Saturday night hip-hop events and Sunday brunches were attracting “the wrong type of people.”

“We are not closing. We need to protect our business,’’ said Alarcón, who sought federal bankruptcy protection last month to stave off the landlord’s eviction attempts.

The restaurant’s problems are indicative of the harsh realities for all businesses in the Seaport, where people of color occupy a tiny fraction of the booming restaurant, retail, and housing market.

For minority-owned businesses, the economic hurdles are especially high, and there is little room for financial error — let alone millions of dollars worth.

The uncertainty was real for Larry Jimerson, owner of Larry J’s BBQ Cafe, who said he has been pleading with his landlord, the Massachusetts Port Authority, for years to help him expand his D Street takeout and catering business, and has spent the last 12 months worrying whether Massport would extend his lease.

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“If I’m the lonely minority-owned business down here, then why are you trying to uproot stability in the Seaport, when, I’m sorry, it’s an all-white neighborhood?” he said.

After a Globe inquiry, Jimerson said that Massport officials contacted him and said they wanted to talk about extending his lease.

Lane Turner/Globe Staff

Larry Jimerson wants Massport to renew his lease.

“If I’m the lonely minority-owned business down here, then why are you trying to uproot stability in the Seaport, when, I’m sorry, it’s an all-white neighborhood?” he said.

After a Globe inquiry, Jimerson said that Massport officials contacted him and said they wanted to talk about extending his lease.

“We think his business is great, we have every expectation that we’ll have more conversations with him, and he’ll be there for many more years,” said Massport spokeswoman Jennifer Mehigan.

Nearby, Alarcón and Maggioli are trying to hold on to their Seaport business. Alarcón said he invested $1.2 million of his own money and secured a lease with Waterside Development Group LLC. He hired a builder to construct a 10,000-square-foot restaurant space on the ground floor of 505 Congress St., which houses 236 “luxury apartments with alluring amenities,’’ according to its website.

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But the construction took longer than planned, delaying the grand opening by six months. When the restaurant finally welcomed patrons in November 2016, La Casa De Pedro was behind and heading into a slow season — winter.

Alarcón said the restaurant needs $120,000 weekly to be profitable, but it was making $55,000. Rent is $64,000 a month.

La Casa De Pedro never fully got off the ground, the owners said. Alarcón said his restaurant in Watertown had steady sales last winter.

The landlord was excited the Latin American-themed restaurant opened in the building, but the restaurant accumulated a significant rent arrearage since its opening, Donnie Miller, assistant property manager at Waterside Place, said in an e-mail.

Furthermore, he added, the landlord was receiving “recurring complaints of disorderly conduct at the premises, which have taken a toll on our residential tenants’ peaceful enjoyment of their homes.”

Miller said Waterside Place attempted to work with La Casa De Pedro regarding the disturbances and the back rent in an attempt to allow the restaurant to continue to operate. But the rent being unpaid for nine months and “continuous complaints of disturbances left Waterside Place with no choice but to terminate the tenancy,’’ he added.

Indeed, debt was mounting for Alarcón’s company, 505 Congress Street LLC — including, $513,000 to Trinity Building and Construction Management Co.; $641,000 to D and R Electric Corp.; $1.5 million to Leader Bank; and more than $577,000 to the landlord, Waterside Development Group, according to papers in US Bankruptcy Court.

To generate revenue, the owners said, they began hosting private events, including their popular “Brunch so Hard” that brought in $25,000 to $29,000 weekly, they said. Their Saturday night hip-hop event generated $6,000 weekly atop dinner sales, they said.

“The only thing keeping the business going are the private events,’’ Maggioli said. “That was the way to get through the winter because there was no foot traffic,” Maggioli said.

Geno Green, who heads the 1120 Entertainment Group, said he partnered with the Seaport restaurant for the brunch series that ran from the fall through March, drawing a cross section of black and Latino residents and urban professionals.

“The residents [living above the restaurant] were going to do everything in their power to get us out of there,” he said. One tenant, he said, was filming guests as they left the building.

Eventually, Green decided it was best to move the series elsewhere.

Maggioli and Alarcón said the building’s residents were aware they would live above a restaurant in one of the city’s busiest entertainment areas.

“It’s very difficult to operate when the tenants are complaining about everything imaginable,” Alarcón said.

The men ended the brunch and hip-hop nights in March. Then things took a turn April 13, after about 100 patrons attending a birthday party at the restaurant spilled onto the sidewalk around 2 a.m.

Police reported seeing a large, boisterous, and unruly crowd that included some people running along the sidewalks yelling, according State Police spokesman David Procopio.

“Residents of Waterside Place were looking out their windows at the crowd,” Procopio said.

The group dispersed after 45 minutes, and officers did not observe any fights. There were no arrests.

“What happened last night was beyond appalling,’’ read a partial e-mail from the landlord to the owners that was in court papers.

Alarcón explained that the 150 guests were “educated young professionals” and that he hired five security guards and a police detail from Massport to disperse the crowd.

But fearing the landlord would speed up the eviction, he filed Chapter 11 bankruptcy protection on April 15. He also cited a Feb. 14 e-mail from the landlord that said, in part: “Your promotion of the venue as a nightclub is clearly attracting a clientele that is not appropriate for our luxury apartment building and not something we ever approved.”

In the bankruptcy filing, Alarcón’s said efforts to boost revenue and meet its obligations are being blocked by the landlord, who has been attempting to lease the property.

“We need our customers’ support,’’ Maggioli said before one of the restaurant’s biggest days, Cinco de Mayo, last Saturday. “We want people to see what we are all about.”


Meghan E Irons can be reached at meghan.irons@globe.com
Follow her on Twitter @meghanirons.