Burnette used banking connections to save 101, Mint
The business ties between Adam Corey and John “J.T.” Burnette go back years before both their names showed up on a federal subpoena demanding information about their dealings with the city's redevelopment agency.
Burnette used his connections as a shareholder with ProBank to buy the debt-plagued 101 restaurant and Mint Lounge and leased it to Corey until he could secure his own financing to buy it.
Burnette paid off the restaurant's debts after prior owner Anthony Murgio defaulted on his loan. Corey leased it from Burnette from October 2012 until March 2014, when Corey was able to purchase the popular gathering place.
“Corey was supposed to obtain a loan from multiple banks to conclude the deal we had in place but was unable to do that,” said Murgio, who brought Corey on as a partner in late 2011 with the intention that Corey would eventually buy him out.
While Corey got a successful restaurant and lounge, which operated until it abruptly shut its doors last summer, Murgio got nothing.
Worse, Murgio told the Tallahassee Democrat, he got stuck with a $389,000 judgment against him, the result of a lawsuit filed by his original partner in the 101 restaurant, Tarek Habib.
"I was never paid," said Murgio, who last month was sentenced to five-and-a-half years in federal prison for his role in a Bitcoin scam.
Corey and Burnette, whose companies and other business associates also appear on the FBI subpoenas, did not respond to requests for comment.
Condos and bank loans
The turbulent history of the 101 and Mint began in 2007 when they were attractive properties on the ground level of Kleman Plaza in the Tallahassee Center, a 114-unit condominium tower at 215 W. College Ave., across from the Challenger Learning Center.
Tallahassee Commercial Properties, owned by Craig Chown, took out a $1.37 million loan from Logan Asset Backed Fund in February of 2007 and bought the units from Gameday Tallahassee LLC, the condominium tower’s developer.
Murgio partnered with Tarek Habib, formed 101 Mint Inc. and opened their restaurant.
Two years later, Chown sold the two plaza-level units to Murgio, who took out a $340,000 mortgage from ProBank and assumed the $1.3 million note from Logan.
Things were going well until the condominium association filed a lien for unpaid association assessments, followed by noise complaints. Legal battles went on for years, until a judge ruled against Murgio and 101 Mint in September 2011, and ordered them to pay $228,000 in legal fees to the condominium association.
That was the last straw for Habib, who made a deal to sell his share of the restaurant and lounge to Murgio for $425,000.
A few months later, Corey came on board. According to Murgio, Corey was to pay $1.5 million for 90 percent ownership of the restaurant and lounge. Corey would later say he was only responsible for paying off the ProBank mortgage.
Burnette steps in
A month later, Logan Asset Backed Funds filed a notice to start foreclosure proceedings against the 101 Mint and Murgio.
In January 2012, Murgio signed over the two condo units that housed the businesses to Burnette.
That same year, Burnette dove into the banking business. He and Kim Rivers, through their "financial engineering" company Inkbridge, started raising money from investors to recapitalize ProBank, which held a mortgage against Murgio and was named as a defendant in the Logan lawsuit.
According to a profile in Tallahassee Magazine, their intended goal was to “launch an SBA lending platform” for small businesses to obtain low-interest loans.
Probank was a commercial bank founded in 2007, and was on the verge of being shut down by the FDIC until board members raised $4.6 million during a 2012 recapitalization drive.
American Commerce Bank of Georgia acquired and merged ProBank in June 2015.
In October 2012, Burnette assumed the promissory note from Logan and assigned it to ProBank, then took out a $800,000 loan from ProBank to pay off part of the Logan note. Both the ProBank and Logan notes were paid off in March 2014.
In November 2012, Logan signed everything over to Burnette.
In February of 2013, Burnette leased the restaurant and lounge to Corey and his business partner Ryan Grindler, who had formed the Tallahassee Hospitality Group to take over the restaurant.
He would remain Corey’s landlord for more than a year, until Corey took out a $1.445 million loan from C1 Bank and bought the 101 restaurant and Mint Lounge in March 2014. He also assumed $80,000 of the condominium association’s legal fees.
Between November 2013 and December 2014, Corey bought four units above the restaurant and nightclub. He also bought units 603 and 702 from Chown of Capital City Investments and Assets for $262,000 in 2014.
His holdings in Tallahassee Center are worth close to $2 million.
On March 27, 2014, the case against 101 Mint and all other defendants was dismissed with prejudice.
More legal troubles
After Corey took ownership of the restaurant and lounge, Habib filed a lawsuit claiming Corey owes him the balance of the $425,000 Habib was supposed to get for his share of the business. Habib said he received some checks of $5,000 each, but the payments had stopped.
In October 2015, Murgio filed a cross-claim against Corey, accusing him of fraud. He also accused Corey’s lawyer, Danny Manausa, of having a conflict because Manausa once represented Murgio.
Murgio said Corey was supposed to pay him $1.5 million and square things with the condo board. Corey claimed he was only responsible for the outstanding debt on the $340,000 ProBank mortgage from 2010, which was paid off March 4, 2013.
An undisclosed settlement was reached in May and the case was dismissed.
101 Mint shut its doors last May, almost a year after Corey opened the city-backed Edison Restaurant at Cascades Park. Corey opened the Tequila Tribe restaurant at the same spot last September but closed its doors in April.
Both units are currently vacant, but Tallahassee Hospitality Group took out a notice of commencement in June to make interior alterations to the existing restaurant.
Tallahassee Hospitality Group also issued a “notice of non-responsibility,” claiming it wouldn’t be subject to any liens “on account of improvements made by or on behalf of” any future tenant or lessee.
Contact Schweers at firstname.lastname@example.org. Follow him on Twitter @jeffschweers.