Milwaukee restaurant operator John Vassallo, owner of Mo's Irish Pub and other eateries with the "Mo" name, has defaulted on loans totaling just more than $5 million, and is facing a foreclosure suit on two downtown buildings.
Chicago-based Harris Bank says Vassallo's investors group, Mostreet LLC, borrowed $2.7 million in 2005, and an identical amount in 2008. Those loans were made by Lincoln State Bank, which Harris bought last year.
Mostreet defaulted by failing to pay the balance when the second loan came due on July 25, according to a lawsuit filed Tuesday in Milwaukee County Circuit Court.
As of March 19, Mostreet owed $5.1 million. Vassallo personally guaranteed the loans, according to the lawsuit, which names him as a defendant.
Vassallo, known as "Johnny V," said Wednesday that he hopes to avoid foreclosure by reaching a settlement with Harris Bank.
"Foreclosure is not what anyone wants," he said.
Harris is seeking a foreclosure sale of two adjacent buildings owned by Mostreet. Proceeds would be used to help pay off the amount owed to the bank.
The buildings, at 725 N. Plankinton Ave. and 142 W. Wisconsin Ave., were purchased by Mostreet in 2005 for $2.85 million, according to city assessment records. Together, they have an assessed value of $3.4 million.
Vassallo bought the properties after opening Mo's Irish Pub in the Wisconsin Ave. building in 2003. The restaurant and tavern feature interior woodwork created in Ireland and then shipped to Milwaukee, with a crew of six Irish carpenters making the trip to assemble it here.
Vassallo said the two loans helped finance the purchase of the buildings and renovations to prepare the buildings for their redevelopment.
He had hoped to pay off the loans by selling the buildings. But three separate sale attempts have fallen through because the prospective buyers couldn't secure financing, with credit conditions deteriorating over the past year or so, Vassallo said.
One potential deal that died was developer Charles Gabaldon's plans last year to convert the buildings into a 160-room Holiday Inn Hotel & Suites. The other prospective developments involved a hotel conversion and an apartment conversion, Vassallo said.
Mo's Irish Pub opened just across the street from Mo's . . . A Place for Steaks, 720 N. Plankinton Ave. The steak house, which opened in 1999, was Vassallo's first downtown business to use the "Mo" name, which is a tribute to his mother, Ellen Maureen "Mo" Drew.
Vassallo now operates three Mo's Irish Pubs, including one in Wauwatosa and another in Noblesville, Ind., and three steak houses, with additional locations in Indianapolis and Houston. He also owns Mocha . . . A Coffee Bistro, which opened in 2005 at 124 W. Wisconsin Ave.
Those businesses have been credited with helping revive the area around the intersection of Wisconsin and Plankinton avenues.
But some of Vassallo's businesses have not been successful.
Mo's Market: A Place for Wine, a deli and wine shop, opened in 2001 at 717 N. Plankinton Ave. It was later converted to an Italian restaurant, called Mo's Cucina, which closed in 2007.
Also closing in 2007 was Moceans, a seafood restaurant that operated for three years at 747 N. Broadway.
Vassallo's Asian restaurant, Monsoon Wok and Lounge, opened in 2005 at 811 N. Jefferson St., and closed within two years. Another Monsoon, in Brookfield, was sold in 2007 and changed its name to Umami Moto.