Ballantyne salon's ex-owners sued for $1 million

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by ELY PORTILLO / The Charlotte Observer

WCNC.com

Posted on June 5, 2012 at 10:24 AM

The company that owns Ballantyne Village is suing the former owners of one of its tenants, upscale men’s salon Emerson Joseph, for more than $1 million, claiming they fell behind on their rent and owe future payments on a 10-year lease.

The lawsuit was filed Monday on behalf of BV Retail by Charlotte lawyer Will Terpenning in federal court. BV Retail claims that Emerson Joseph’s former owners, developer Jim Donnelly and his wife Stacy Takats, owe the money because they did not pay rent and previously filed for bankruptcy. Their corporation, Emerson Joseph LLC, was dissolved earlier this year.

Businessman Zachary Edwards said he purchased Emerson Joseph in October 2011, and his new corporation, EJ Grooming Lounges LLC, is current on its rent and all payables. Both Emerson Joseph salons continue to operate normally, offering high-end haircuts and other men’s grooming.

The unpaid rent from Donnelly and Takats equaled $82,243, according to the lawsuit, and the amount of rent owed under the remainder of their 10-year lease is $954,031. BV Retail claims Donnelly and Takats are liable for future rent payments and legal fees associated with the lawsuit, under the terms of a guaranty they signed along with the lease.

A lease filed as an exhibit by BV Retail shows Emerson Joseph’s annual rent for the 2,912-square-foot salon started at $94,640 when the lease was signed in 2007, and was set to rise to $116,392 in the lease’s 10th year.

Donnelly was a prominent developer during much of the uptown boom, developing the Trust building on Tryon Street where Michael Jordan and Cam Newton bought condos, seeking to develop the Carolina Theater property uptown, and founding the two Emerson Joseph salons, on South Tryon Street and in Ballantyne.

The couple has since moved to Austin, Texas, the lawsuit from BV Retail claims. Donnelly and Takats couldn’t be reached for comment by phone, and a message at Emerson Joseph said the salon is closed Mondays.

Donnelly ran into trouble when the economy soured. TBG Development filed for bankruptcy protection in 2009 after falling behind on some of its loan payments. The company owned the bottom floor of 221 S. Tryon St., where Emerson Joseph operated as a separate company. Emerson Joseph then filed for bankruptcy protection in 2010. But the salon continued to operate normally, and Donnelly said at the time he expected to reorganize the companies and emerge from bankruptcy protection.

N.C. Secretary of State records show that several of Donnelly’s development corporations, such as Brevard Street Development, Pursuit Group, and TBG Development, have dissolved.

The Observer profiled Donnelly and his efforts to stay afloat in a 2009 story, “Hanging on in Sinking Market.” In the article, Donnelly said he, like many developers, was trying to hang on for three more years. “It feels like we’re wading in quicksand, but it is what it is,” Donnelly told the Observer. “We have been (developing projects) in a miserable time. Hopefully we’ll come out of it OK and with enough financial resources to reload.”

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