Last month I drove past Republic in Las Colinas and noticed the name had changed to Las Colinas Prime. I called the restaurant on June 1st and talked with Brian Luisi. He told me the tapas-restaurant-turned-steakhouse had changed concepts and names. The restaurant, owned by Bill McCrorey, is managed by Michael Costa’s Rainmaker Restaurant Group. Costa is no stranger to the local scene. He was involved in other Dallas restaurants such as Toscana, Mediterraneo, and Sfuzzi. I reported the story. Over. Easy.
Yow. Zah. I stirred up a hornet’s nest. Former and current employees and contractors left horror stories in the comment section. It didn’t take long before I started receiving accusatory e-mails and phone calls. Their beef? It’s a really long story and you’ll have to jump.
Here’s a sample of what I received:
The guy who made the sign: “We lost our shop over this job. They ordered a ($8,000) sign from us and wrote a hot check for the deposit. When we asked them about it, they lied and said ‘our manager wrote it out of the wrong account’ and then they wrote us another one. They avoid your calls and if you talk to them it’s all bullcrap.” (He really said bullcrap.)
Waiter: “I was working there as a waiter before the name change…I haven’t been working shifts there this week because they owe me so much money. As far as the TABC violations go, they are true. I have witnessed them and there are several. I can also confirm that the owner, Michael Costa, was arrested last week. I can also tell you that all credit card tips for the waiters and bartenders are supposed to be on paychecks. Almost every customer pays with credit card and the tips have not been given to employees. When they do hand out a check, it bounces.
There’s plenty more. And a lot of the stuff these commenters tossed out didn’t happen or were factually incorrect. Costa is not an owner and he turned himself in before actually being was arrested. But the rumormonger in me kicked in and I went sniffing down the long story trail.
I didn’t talk to anyone or report the story until I reached Michael Costa on the phone. The first messages I left were not returned so I called Brian Luisi back and just started firing questions. He said he’d have Costa call me back. He did. The following is the complete transcript of our conversation. It’s really long, but I thought you might like to read the whole story and draw your own conclusions.
NN: What is going on at Prime?
COSTA: I’ve never had a client that just, boy, he’s just a made a lot of enemies along the way.
NN: How is the restaurant running? Does someone else own it?
COSTA: Yeah, McCrorey and Michael Thibodeaux. They had a disgruntled employee. Our relationship is just that I’m a management consultant, so I’m helping run it with their employees, trying to give counsel, much like a lot of restaurateurs do. They’re listening to too many people. Bill had luck with the club on Hall Street, but he’s not necessarily a restaurant guy. He’s done some work, with a group like Houston’s. He’d never built one. When he first built Republic in Las Colinas…delusions of grandeur, a 12,000 square foot facility, we’re gonna make all this money, on and on. People don’t get the tapas [concept] that well, and at 12,000 square feet…you know. So we came on a while ago, to reformat.
NN: How long ago was that?
COSTA: We’ve been on for about a year, we tried as Republic. He had paid about $800,000 on renovation, and about $500,000 or $600,000 was to one contractor, and then that guy didn’t pay any of his subs, then they got cross with each other. So we were able to go from that negative $800,000 to negative $80,000 in less than a year.
Then he had an employee who talked back or something, and then he messed up his paycheck, so that guy went to TABC and told them we were doing all these things, and did everything he could to make that place close. So it brought the attention of a TABC agent that I’ve had…issues with before. I mean, I’ve been doing this in Texas for a while, and all over the place, and I’ve never had problems like this. I mean, there’s only one TABC, right?
NN: Yeah, I call them hillbillies with guns.
COSTA: Yeah. Exactly, I mean, I even had a client that six months ago, I turned in [to TABC].My own client. Much like Bill here…he was an absentee owner, he let his bar manager from Republic Dallas become the GM of a 12,000 sq ft facility, and the guy was in way over his head. I can’t be there every day, we have other clients, so we were inching our way back, and then this whole TABC thing came up, and I know enough about the TABC to really be dangerous, whether to them or me. So I was there after they got caught, they couldn’t reach me, they couldn’t reach Bill.
NN: Who? The TABC?
COSTA: No, the GM. Lance Hickam. But anyway, I hope none of this is newsworthy.
NN: Well, I’ve got several people emailing me all kinds of stories, I’ve got to check them out. I think that is worthy of something.
COSTA: But it’s like that whole, when the TABC started, it was the death of Las Colinas [Prime] for sure. So we tried to reformat, try to get a fresh start, and it looks like this is going to be the death of that. Fox 4 reported that they weren’t paying their bills. I mean, they didn’t have a good history, but they were climbing out of it. I mean, this guy [Bill McCrorey] has never not paid anyone. He could have closed his doors, thrown his hands up and declared bankruptcy. But he didn’t do that, it wasn’t his intent. But he had Lance, this guy and another guy running it and they were in over their heads. Nice guys, but at the end of the day they weren’t capable of pulling that off.
NN: Well, I have five people here who claim they were former employees who were written hot checks for their wages. So, you know, is that true?
COSTA: I’d have to see who they are. Anyone we are aware of has been taken care of. That was issue with the guy who complained initially, who went to Fox 4 and stirred that up. So anyway, it just caught the attention of this one agent, [NAME REDACTED], who just has it out for Bill. He said he wasn’t going to allow him to operate in the state of Texas, which really isn’t his decision, and he started doing anything he could to close it. And when we kind of recast it as Las Colinas Prime, they denied our ability to do that, which they can’t legally do either, so I showed up to defend my client and said [NAME REDACTED], you can’t come in here and not present a badge, when they’re doing everything to comply, and on and on. So he decided he wasn’t going to be talked to that way, and got a warrant for Bill’s arrest and my arrest, of which we both complied, did whatever he wanted us to do, because again, that’s all Bill wants to do, is operate a restaurant.
NN: But who issued the warrant for your arrest?
COSTA: [NAME REDACTED].
NN: So TABC can do that?
COSTA: Well they can, but the way he did it isn’t their protocol. Typically they would issue a warrant, go to every police station and be done with it. But this guy was coming in every night harassing customers. Really to the point where he is purposefully trying to drive Bill out of business, and I don’t understand. Bill was the license holder, and as such, anything anybody does under your license…so I get that.
NN: Does Bill live in Dallas?
NN: So when you say harassing, what was he [TABC] doing with the customers?
COSTA: Oh, everything from telling them to shut up to…
NN: Telling the customers to shut up?
COSTA: Oh yeah. I got it all on tape. It was pretty bad. I’ve never seen such a disregard for standards and ethics than this guy has done. So you know, I’ve never seen anything like it. So we all complained, saying we’re trying to comply, this guy doesn’t want to let us operate, and if we’ve done something so bad, I wasn’t there, Bill wasn’t there, we didn’t know what this guy had done that was so bad
NN: Who, the GM?
COSTA: Yeah. Like I said, I had turned in a client six months ago for doing the exact same thing, when it was an absentee owner that didn’t know what was going on.
NN: Did you have to turn yourself in when they issue a warrant? They don’t come and arrest you? Someone told me they came and took Brian out of the restaurant.
COSTA: No, no, well, not that I’m aware of. I hadn’t been there for two weeks, and when I found out all the horseplay that was going on with TABC, I said, I’ll just go do my thing and let’s move on, because all I care about is operating restaurants. So we’ve instigated an investigation from both the governor’s office into the way this guy conducted himself and with internal affairs at the TABC and talked to attorneys, and pretty much everybody said the same thing, you know, just role with it, because nobody governs them, except the governor’s office.
NN: I know, it’s creepy.
COSTA: The governor is actually driving the biggest side of this, of the investigation. You know, Bill did his thing, I went in and said here I am, already had myself bonded in and out. I don’t want my name associated with anything like that.
NN: So when you say the governor is driving this, you mean you’ve been in contact with the governor?
COSTA: Yeah, the governor’s office has somebody looking into investigating it. Again, I want this to go away, we don’t want to sit here and make a huge case of it, although I wish somebody would.
NN: Well, I’d be happy to.
COSTA: Well, that might be the path I would take, but Bill is too passive, he just wants to operate a restaurant.
NN: Well if he wants to do that, he needs to pay his employees.
COSTA: Well, I agree with you, and he did everything he could. He started $800,000 in the hole. And part of it, I mean, I do a lot of new work, a lot of construction, development, we’re doing a hotel in St. Andrew, Scotland, something with a powerful, celebrity name, that I can’t really say at this time. The point is, I do a little bit of fix-it work. And we’re 12 for 12–we’ve never not fixed anything. He was almost back to square one, and then all this stuff unloaded.
Nobody feels worse than Bill, and it’s not like he’s got a lot of money sitting in the bank to pay people. He’s fighting his way back, and the problem with a situation like this is that when a lot of times when there’s smoke there’s fire. So one person says, “Well, if they owe you money, I worked there at the same time so they must owe me money.” I’d say in the last…we got rid of Lance, but in the two months prior to him leaving, back in February when this whole thing started, 12 people came forward and Lance sat down with each one of them, and showed them the paperwork, and each of them were owed zero. So we let him go, for this violation…
NN: What violation?
COSTA: For bringing in beer without a receipt?
NN: Huh? You mean he sold beer without a receipt?
COSTA: No, he [Lance] brought beer into the facility, which you can’t do. TABC would claim you were trying to cheat them out of taxes. Which you aren’t…because if you’re buying it at the store you’re paying more than you normally would, you’re selling it and ringing it up and you’re paying your tax at the point of sale.
NN: But why would he do that?
COSTA: Because he didn’t have access to funds, there was no petty cash. I wasn’t around, Bill is an absentee owner…it [beer delivery] all gears towards COD, whether it be Sigel’s, or the grocery store…I don’t really understand it, I never got a straight answer. But nobody is penalizing the State, no one is cheating TABC out of tax money, because again, we’re paying 14% on the sale price. So not what we paid for it, but if we picked it up at the grocery store, they’re paying more for it…but anyway.
NN: I’ve also heard from the people who made your sign. They claim they were owed $8,000 and they were paid in hot checks. Has that been cleared up? Is that on your watch or the old watch?
COSTA: Everyone perceives me as being the owner, because when I’m there. I’m pretty present and taking charge. I was there the week of the Byron Nelson when they were scrambling to get everything done, the sign, the patio, before the Nelson. They needed help, so I was there every day and Bill was, but I was the employee’s point of contact. But I had nothing to do with the arrangement that Bill and Shawn, the guy from the sign company, had made. I was made aware of it, I mean, we’ll get it paid…
NN: So do you sign paychecks?
COSTA: No, I haven’t, it’s not my company. I’m a signer on the account…I have signed some checks…
NN: But you don’t handle the accounting?
COSTA: No, we have a service we employ that we use on all our accounts. A lot of mom and pops that do their own accounting don’t do it well.
NN: So is Las Colinas Prime in your accounting division or their own?
COSTA It is now, it was their own.
NN: I’m trying to understand why people are looking at you as…
COSTA: Because I was the one ordering people around that week. And I think he owes a few other people for that week…two things. He had a contractor who didn’t pay his subs, so he went through it on a smaller scale, but that drained him of the capital he had for the renovation. And number two, TABC comes in every single day, they went there on a Friday and cleared the place out. That, to me, is harassment.
NN: How long ago was that?
COSTA: Three or four weeks ago…and again, if somebody wants to make a case, it’s there and in plain sight…you have to understand this agent…[REDACTED]…This guy is a nut. I mean, they pulled a gun on one of the cooks in the kitchen because he had a knife…I mean, what’s a guy in a kitchen supposed to have? So when I stood up to him in front of other agents, the target went on my head. It really is. They’re so careless, and cavalier–it’s amazing. Then I had a guy with the local office that said he was internal affairs, and he let me lodge my complaints with him. He’s going to do everything he can to make this go away. Well, he’s the sidekick of [REDACTED]. They were just trying to set us up, then showing up every day…you know…in a restaurant of that size would do big numbers Friday and Saturday. Anybody with a decent product has good business Friday and Saturday. Their sales dropped 75 percent when they started doing this, which is what [REDACTED] wanted.
NN: What did he have against Bill?
COSTA: I have no idea, he had never met Bill. When I started getting involved, he had never met him.
NN: Had you met him before?
COSTA: Oh yeah, when I turned in one of my own clients six months ago, he was the investigator in charge. So he knows I don’t condone that. It was a nightclub. He was ripping people out of that nightclub accusing them of not having proper ID, and 100 percent of the time they had proper ID.
NN: What nightclub was that?
COSTA: Dulce, on Main Street. We [Las Colinas Prime] just want to be quiet. Anybody who’s owed money, we will get with the powers that be and get them paid. Six months ago the situation was much worse. I mean, read the paper.There are a ton of restaurants going out of business. Bill thought that this was it for him; he was out of the restaurant business.
NN: What is his real job? I mean, what did he do before this?
COSTA This was it, Republic Dallas…I mean, he had a flower shop, but nothing on that scale…I mean, he had partners, but he bought them out.
NN: He closed the one over here, didn’t he?
COSTA: Yeah, to get rid of the name…after the initial TABC claim, and this guy comes in and harasses people and scares people off, there’s no way it’s going to exist. When you called a few weeks ago, I talked to PR CONTACT [REDACTED] who said she would call you. I guess she didn’t call you.
NN: Yeah, no she didn’t. I didn’t know you worked with her.
COSTA Yeah, she’s great. So anyway, Bill was like, this is it, might as well move on. He has some real estate holdings, an apartment rental here or there. But that’s it. He [Bill] wanted to take a step back to set us up to succeed, and he didn’t have to be there and could pursue other things as a source of income.
NN: Well, playing the devil’s advocate here. If Bill had made that much of an investment, it’s not like he owns a construction business or a future’s company, wouldn’t it make sense to be there day in and day out trying to make it work?
COSTA: He was, but then more and more he saw that he needed to take a backseat and let me run things. And then we came up with Las Colinas Prime, and let’s rebirth this thing, put in our accounting system, and just jump in with both feet, both feet forward. The concern from all of us was that this thing was very… it can’t handle bad press. This week it’s just blossoming from the TABC damage, I mean, you’re doing, I don’t want to say his numbers.
Let’s say $20,000 and then all of a sudden the TABC thing happens and then it’s down to $6,000. Well, that’s why the sign people didn’t get paid. I mean, he’s done everything he possibly can to make this thing succeed, and now it’s just overwhelming with anything that hits him at this point. If anything, we were hoping to start getting reviews, I think the chef is great, I think Brian is great, we just brought a guy on that was at the Mansion for years as a manager, we’re in the process of redoing the wine list…it’s a great menu, um…
NN: Who’d you bring in from the Mansion?
COSTA: His name is Scott Adams. So you know, we wanted a fresh start, to make sure we’re successful and moving forward and having the right accountability. He’s [Bill] the only one of my clients struggling, I mean, I only do one at a time. Unfortunately, he’s struggling, but we have other projects which are more upbeat and positive, and I feel for Bill, because how many people have you seen do the exact same thing.
So there are probably five or six ex-employees that are owed money. But it was the intent that they were paid by now. But what you’re not going to hear from anybody is that numerous times he’s given loans. There was a new employee last week, his name hasn’t even come up on the payroll because most restaurants run a week and a half behind…so his name hadn’t even shown up on payroll yet but he needed money to pay a bill. So ok, sure, no problem, by all means. And that’s always been the case, and that’s Bill’s attitude.
My attitude is that it’s business. If we have the ability to do that, OK. But I can’t say that I’m aware of the new construction issues because we would have addressed them before they became a problem. Just like a lot of loan modifications, for you home or anything else, most people are working with everybody in this economy because if it goes under than nobody gets paid.
NN: I’m just going to see if I got this right. So this all came about because I took somebody to the airport and I saw the change. So I saw the sign change, and I reported it, that’s when I called you. I ended up talking to Brian, he said oh, we changed the menu, and I posted that as news a few weeks ago. Then about a week ago I started getting emails from employees. I need to address that, so I’m going to say that I heard this and that I talked to you. I tell the story you just told me. Can I say that you told me what you said a few minutes ago– we will get them paid, we’re regrouping, we’re moving forward, if people have…
COSTA: We are moving forward. We were given the new concept with the intent of having the face lift by the Byron, four or five months ago. It takes a while, obviously. We added a new patio in the front, the game plan was, I mean, who knew back then that the contractor he had would walk and not pay the concrete company.[REDACTED] Your priorities in this kind of economy just change and I assure you, that he will get everybody paid 100 percent. I don’t, because he negotiated a lot of that, I don’t know the details, I’m not around, I wasn’t around that much, to cut the deal…I know they got about 60 percent up front, and they’re great guys, and we thought they did a great job. The sign turned out better than we thought.
NN: So can I end this by saying you assure that everyone is going to get paid and just leave it at that?
COSTA: Yeah, by all means. And I would like to know who it is. I think a lot of the employee issues are where there’s smoke there’s fire. People that are mad are going to come out of the woodwork, and we’re in a people business and you gotta deal with that. But even with Lance there, 12 employees made claims and all 12 had been paid 100 percent. They forget that X amount goes to tip pool, and taxes are taken out. They just want to walk out with cash every night, and it doesn’t work like that. Welcome to being a server. I mean, I read everything, the disgruntled, it was a girl that worked there and claimed she was owed $1,035 and was paid $500, I think there’s a remaining 5 she thinks she’s owed. She had a friend who’s an attorney send a letter, they said they wouldn’t speak with her. We said we would sit down with her, explain that she was paid what was netted out. I mean, she made $1,000, she wants to walk with $1,000. I mean, you have to pay taxes on that. We are, forgive the word, anal to the core. I mean, I do so many projects. We go into every project expecting to be audited on everything. So we keep great records, we do things to the letter of the law, including turning in one of my own clients. I mean, I went to the client, and said look, I mean, this is what they were doing, they were marrying bottles, cheap liquors with expensive stuff, and selling it for $400 a bottle, I mean $8 tequila. Just disgusting. And they had two 55-gallon drums of empty bottles where they hadn’t scratched the stamp. I went and took that to them [TABC] because I don’t condone that.
NN: So why…
COSTA: Well, I lashed out at him[TABC]. I disrespected him and that’s what he wanted. I mean, I said, you can’t come in here without your badge. The chef asked you for your badge, don’t come in here and pull a gun on a cook, and don’t do this, this this and this. We will provide you with every record you want, and we already have. We did months ago, and he can’t find anything. It’s driving him nuts. Listen, very few people know that I went and turned myself in so we could get rid of him except the officer and my attorney, and Bill and the TABC. So someone at the TABC is blogging…it’s amazing. It’s amazing, he’s obsessed.
NN: I had a couple restaurateurs call me and say the TABC is reading my blog.
COSTA: Oh yeah, they are, they get on all these email sites where people are sending out flyers. They know every party in town, they’re very aware.
NN: So did they arrest Brian too?
COSTA: Not that I’m aware of. They didn’t have anything on him. They went after Bill, and he went in right away, he said he didn’t want the attention.
NN: What were the charges?
COSTA: Illegally dispensing alcohol without a receipt. Of which he didn’t do, OK, but again, as a license holder you accept that responsibility. Me, he had no business getting. That’s what was comical, because my name isn’t on the license, I’m an independent contractor, I wasn’t an employee of Republic Las Colinas. I don’t own the property, so he had nothing. So everybody said, go do it, and now you have damages. And I said yeah, I wish someone would do it. I’ve never seen anybody do this, it’s a witch hunt. I mean, putting someone out of business isn’t going to bring in more taxes. And he paid his taxes.
Yeah, he’s been late on that too, but he’s paid every penny and paid penalties and he’s up to date. The guy is doing everything to fight back and this stuff works against him. But I assure you, I know Bill, and I wouldn’t be with Bill more than a day if he wasn’t like this. He’ll pay everybody and make it up. And that’s kind of the way I am. I’m a little bit more, let’s just pay everybody and let’s wait for a day we have extra money and wait to be generous until we have a viable business. But I appreciate his character in wanting to do that.
NN: And if you get your story out there and people get paid, it will go away.
COSTA: And they will.