Lawsuit could be tied to E-Street Cafe’s demise

ENCINITAS — Two weeks ago, the storefront on West E Street was filled with musicians, poets and coffee-drinking patrons.

Today, the musicians are replaced with empty boxes, the poets with stacked up restaurant equipment, and the patrons are now just empty chairs.

E-Street Café, once a bustling cultural hub in Downtown Encinitas, abruptly ceased operations last month. A sign in the window said the space would be reconfigured to its original orientation and leased as office space.

Calls to George Gowland, who owns the property, were not returned.

Patrons, city officials and downtown insiders have all asked the same question: what happened?

The answer may lie in a 40-page lawsuit filed in January that pits the café’s former owner and co-founder Keith Shillington against current café owner Dominic Alcorn.

According to the complaint, Alcorn last fall defaulted on a $125,000 loan from Shillington for which Alcorn put up the business as collateral. Shillington, according to the suit, notified Alcorn that he would exercise his rights to collect the collateral by filing a financial statement with the California Secretary of State.

Shillington, who owned E Street Café with life partner Robert Nanninga until shortly after Nanninga’s death in 2009, confirmed the active litigation this week, and said that he believes Alcorn abandoned the business so he could avoid paying him back.

Alcorn, reached Tuesday, alluded to an issue with the former owners, but declined further comment on the topic, citing advice from his attorney Gregory Koehler, who also declined comment.

Alcorn said he had taken up Shillington and Nanninga’s mantle and created popular open-mic nights and live music at the café, but believed the city and local MainStreet Association had created an unfriendly business climate that partly led to the demise.

He pointed to the city’s decision to not enforce two-hour parking limits in downtown as cutting the business he was doing by nearly 30 percent.

Additionally, Alcorn said, downtown’s well-documented issues with public drunkenness and vagrancy also played a role in his increasing frustration.

“I’ve been spit at, called all sorts of names, my windows have been smashed, but was there anything done by the city?” Alcorn said. “I sat there and told the city that the parking issue was killing my business. They did nothing.”

Alcorn, unlike his predecessors, was not a fan of the downtown promotions put on by the Downtown Encinitas MainStreet Association, which he said siphoned more business away from the establishment.

Alcorn said he likely would never run a business in California again.

“It has been such a disheartening experience,” Alcorn said.

City officials declined to comment on Alcorn’s criticisms.

Shillington said the café wasn’t the same after the sale.  In the years following Alcorn’s purchase, he said, he tried to help the new owner turn the corner, but could see the dwindling patronage.

“If anyone says that they didn’t see this coming or were blindsided by the closure, shame on them,” Shillington said. “It was clear he was struggling.”

He also said Alcorn was having increasing difficulty making the payments, which according to the promissory note in court files were quarterly amounts of $5,817 until October 2016.

By late 2013, according to the court files, Alcorn had stopped making payments to Shillington, and on Nov. 26, Shillington issued a notice of default. By January, Shillington had filed paperwork with the state notifying them of his intent to collect the collateral to satisfy the balance.

Alcorn never responded to the default notice or the notification of Shillington’s intent to collect the collateral, Shillington said.

Shillington said he is extremely disappointed by Alcorn’s decision to shutter the business rather than trying to sell the business to satisfy the loan agreement.

“To simply walk away, without attempting to see what was left, I don’t understand it,” he said. “Instead, he walked out on so many people. It’s heartbreaking to see the business shuttered, the whole city busted up about it.”

Both city and downtown officials have lamented the café’s demise. In it’s heyday, the café, the first cyber café in Encinitas, was a popular watering hole that attracted city officials, local celebrities like Joe Walsh of the Eagles and dozens of other folks who were drawn to the energy created by the ownership duo.

“They were two of the most vibrant and vivacious people you’d ever meet,” MainStreet Executive Director Dody Crawford said of Shillington and Nanninga. “They were people you wanted to be around, talk to and they made it a very special place. Losing them put a crimp in the place’s style.”

Shillington and Alcorn are scheduled to be in court for a case management conference at 9 a.m. Sept. 26.