Mad Hatter owners give up post-Sandy dream, put legendary Sea Bright bar up for sale
With few options left to save their ambitious plan to rebuild the Mad Hatter, the owners of the property have put the legendary Sea Bright restaurant and bar up for sale.
Scott and Amy Kelly said they listed the property for $8.5 million about a month ago, which would leave them enough money to pay back creditors. But they have yet to get an offer and are considering lowering the price.
"At this point where we're at with the project, we just had no other choice but to sell the property," Scott Kelly said Thursday.
The Mad Hatter was a landmark pizza place and bar that was destroyed by superstorm Sandy in 2012. But the Kellys' bid to rebuild the restaurant bigger and better stalled when they ran out of money, and local residents say the project has been an eyesore on Ocean Avenue.
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The decision to put the venue up for sale comes as the borough and creditors close in. Sea Bright officials said they have four developers interested in the project. And the property has been listed for sale at a foreclosure auction in Monmouth County in August.
Sea Bright Mayor Brian Kelly, who isn't related to the Mad Hatter owners, said plenty of moving pieces remain before the future of the building is resolved.
"Our goal really is the same," the mayor said. "We just want to see somebody complete the project, but it's not so easy because there are investors and lien holders involved, so trying to work with the state and all other parties, there's never an easy path forward. But we're (moving) ahead, trying to find the best solution to button the building up, enclose it and make it safe again."
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The Kellys in an interview said they hope to find a buyer for the building before the foreclosure auction to repay their creditors. And they were frustrated that their financing plan fell through.
The restaurant has been owned by Kelly Management Group since 2006. After the storm, the company planned to demolish the building and replace it with a three-story 15,000-square-foot restaurant that overlooked the Atlantic Ocean.
The proposal sparked opposition from a neighbor who worried it would be disruptive. But the town rallied around the Kellys, and the plan won approval from the borough in 2016.
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Contractors knocked down the old restaurant, and, with the help of a $5 million disaster loan from the New Jersey Economic Development Authority, began to rebuild.
But with the project 75% complete, the Kellys ran out of money; a loan backed by the U.S. Small Business Administration fell through in December 2018 when the federal government shut down, according to court papers.
The Kellys received a commitment from a new investor, SnowPoint Capital Management LLC, a Ridgewood-based company, willing to lend them $3 million. But the EDA refused to sign off on the deal due to what it said was "a possible misuse of funds," according to court documents.
The Kellys said Thursday that they used the disaster loan appropriately. "Every dollar and penny that we utilized went toward that project," Scott Kelly said.
The EDA's decision left the Kellys out of options. They decided to put the property up for sale.
"Scott and I just decided, as a family, it's probably time," Amy Kelly said. "Let's just put it on the market and move on."
Michael L. Diamond is a business reporter who has been writing about the New Jersey economy and health care industry for more than 20 years. He can be reached at mdiamond@gannettnj.com.
This article originally appeared on Asbury Park Press: Mad Hatter bar in Sea Bright, closed since Sandy, is up for sale
