The Dixie Café in Corbin has been court ordered to cease operations over unpaid restaurant taxes. The order came down Monday in Whitley Circuit Court.
Owners Ed and Carolyn Garr announced on the restaurant’s Facebook page that they would permanently close the doors at the end of business today.
“It is also no secret that we fell behind in our state and city taxes when our son was hospitalized. We negotiated with both agencies to make payments to correct the situation,” the Garrs posted on the restaurant’s Facebook page Monday night. “We are up to date on all current taxes and are making payments on all back taxes. We were informed that the City of Corbin is not satisfied with the payments we have been making. They moved for a judge to shut us down and the judge ruled in their favor today. Therefore, our last day of business will be Wednesday February 7, 2018.”
The city filed suit against The Dixie on Sept. 19, 2016 seeking to collect unpaid restaurant taxes.
Ed Garr said at the time that he had fallen behind on the payments after his son, Samuel, had a diabetic emergency in December 2013 and was in a coma for a week. He said he had to use profits from operating The Dixie, along with state and local tax revenues, to help pay his son’s medical bills.
“We used to put it [the tax money] in a separate account, but when my son got so sick, wrong or right, we borrowed money from those funds to pay the bills,” Garr said after the lawsuit came to light.City Collector Dortha Weber said in a letter dated February 6 that The Dixie is delinquent on seven quarters of restaurant taxes dating back to the fourth quarter of 2014.
The outstanding balance stands at $9,271.02.
“They have kept the current quarters paid, other than that they have not kept the terms of the agreement,” Weber wrote in the letter.
In a motion filed January 24, the City of Corbin sought an injunction against The Dixie Café of Corbin LLC, ordering that business operations cease.
In the motion, Corbin City Attorney Bob Hammons, argued that The Dixie had failed to comply with an agreed judgment and order granted on Jan. 17, 2017 in the amount of $9,956.70.
In the agreed order, The Dixie was to pay $500 per month to the city until the judgment was paid in full.
Since the order was issued, the required payments on the arrears have been made three times, on April 5, July 3 and October 19. A partial payment in the amount of $300 was made on May 11. $125 payments were made on January 25 and February 2.
In addition, The Dixie was to pay the city all of the money collected by the Go Fund Me effort set up by Jennifer Gray soon after the restaurant’s tax issues became public in August 2016.
Gray, a regular customer at the restaurant, said at the time that she started the effort because of the connection she felt with Ed and Carolyn Garr.
“They are not just there for themselves. They make sure their customers get what they need and are treated well,” Gray said in 2016 when asked about the effort.
The effort raised $2,420, drawing donations, not only from members of the community, but from other downtown businesses including, The Depot on Main, The Wrigley Taproom and You & Me, Coffee & Tea.
However, the funds were used to pay outstanding state taxes, according to an attorney for the restaurant.
The gofundme.com page remains active and may be found under the name, “Help the Garrs.”
The agreed order also called for The Dixie to pay all future restaurant taxes within 30 days of the end of each quarter
Finally, the agreed order stated that should The Dixie fail to comply with the terms of the order, the city would be entitled to an injunction ordering the restaurant to cease operations.
Whitley Circuit Court Judge Dan Ballou noted as much in his order issued Tuesday.
Jeff Hill, who represented The Dixie in the case, conceded during Monday’s hearing the restaurant owners had failed to follow the terms of the agreed order with the city of Corbin.
Hammons said Tuesday that he felt the city had been extraordinarily patient, but that final action had to be taken.
“We entered into a agreed order and it was very detailed what was supposed to be done. Both sides agreed,” Hammons said. “We agreed to hold off as long as that was done. It had been over a year, and the terms of the order were not being followed. I think we were very patient and reasonable. You can only go so far with people.”
When contacted Tuesday at the restaurant Ed Garr declined to comment further beyond the Facebook statement.
“Thank you for your support these past 5 1/2 years. Our family has truly enjoyed serving you and we wish all of you the very best,” The Garrs wrote in the Facebook post.
Terrell Halcomb started what is now known as the Dixie in 1929. Originally it was called The Dixie Billiard Parlor. It moved a decade later, in a single night, to its current location just across the street from where it started. It was previously owned by Marsha Trosper who, in 2003, completed a significant renovation of the restaurant that cost around $70,000. The kitchen was moved to the rear and additional seating was added, along with other cosmetic upgrades, giving it its current configuration. When the restaurant closed in 2005, Trosper blamed alcohol sales for luring customers away to restaurants that served liquor by the drink.
The Garrs reopened it in 2012. In the interim seven years, the location had been vacant and, for a time, was an Italian restaurant named Vittorino Cucina.