Cody’s owner: bad economy, lackluster downtown to blame for restaurant’s failure

Hurricane Sandy was the beginning of the end for Cody’s BBQ & Grill, owner Richard Gherardi Sr. said this morning. Flooding caused $100,000 worth of damage, but he was only paid $40,000 by his insurance company, Gherardi said. It proved a blow from which the restaurant, barely a year old when Sandy struck, could not recover, according to Gherardi.

The East Hampton businessman, who opened the restaurant and bar with his son Richard Jr. in August 2011, said this year’s long, “brutal” winter was the final nail in the coffin.

“It seemed like every weekend, there was bad weather to keep people home, and we really counted on our Friday and Saturday night business to stay afloat,” Gherardi said.

But his business revenue had already seen a sharp decline before this winter’s first snowflake fell. “It was 50 percent off where I was the year before,” Gherardi said. But expenses just kept going up. Taxes, permit fees, insurance costs — Gherardi said his insurance premium doubled after Sandy — “the costs you have to pay before you can even sell one hamburger,” he said. It all made last year “the roughest year ever,” Gherardi said.

“I loved Cody’s, but unfortunately this is a business decision I had to make. If it was at least covering expenses, it would be different,” he said. “I have a ton of money sunk into that place,” he said. “I just couldn’t do it any more. It’s just enough already.”

Gherardi blames the economy in general and the downtown economy in particular.

“I never saw an economy like this,” he said. And downtown Riverhead just doesn’t draw the traffic necessary to sustain the restaurant businesses there, according to Gherardi.

“There’s no reason for anybody to come downtown,” he said. “The aquarium and the Hyatt generate business, but that’s about it. I don’t think the theater generated the business everyone had hoped for. At least I didn’t see it.”

Other downtown restaurateurs had a different take on business downtown.

“I think downtown is doing a lot better than it was,” said Liz Strebel, owner of the Riverhead Diner and Grill on East Main Street, a few doors down from Cody’s. Strebel owned and operated the diner, a downtown landmark since 1932, for 26 years. She sold it in 1999 but took it back in 2010, renovated it and reopened it in December of that year.

“Main Street has improved a lot and my business has improved with it,” Strebel said today.

Dark Horse Restaurant owner Dee Muma said business at her restaurant, opened at the corner of East Main Street and Peconic Avenue in November 2010, has been “growing every year.”

“We have our core clientele who come regularly because they like it,” Muma said. “But more and more we have people coming to Riverhead for one reason or another and they’re coming into our restaurant.” 

Diggers owner Steve Wirth said his business is better than ever.

“The last year and a half has been the busiest we’ve ever seen on a year-round basis,” Wirth said today. “We had the best summer we’ve ever had, the best three-month stretch we’ve ever seen,” he said. And it’s kept up, according to Wirth, who has worked at Diggers for nearly 20 years, first as an employee, then as the owner. Even the opening this spring of Joe’s Garage, a pub-style restaurant like Diggers on the riverfront, hasn’t hurt Diggers.

“We’ve never seen as as many people downtown. What they’ve been doing downtown, starting two years or so ago, has really made a difference,” he said, citing the classic car shows, concerts and events and the farmers market. Together with the aquarium, these things have brought people downtown, Wirth said.

An increased police presence — with full-time cops on the beat downtown — has helped, he said. “Riverhead has its problems, like any other downtown,” Wirth said. “But the town has been working hard to make it better.”

Tony Meras, the longtime owner of Star Confectionary, a luncheonette on the corner of Roanoke and East Main known by locals as “Papa Nick’s,” declined comment for this story, but observed that Cody’s was the second Main Street restaurant to fold in a little over a month. Papa John’s Pizza on East Main Street closed its doors in April, less than a year after opening. One of the partners in the franchise blamed a dispute between partners for the closure.

Gherardi said he’s been trying to sell Cody’s for a year. “We had a couple of deals that I thought were going to go through, but the prospective purchasers couldn’t get financing,” he said. “Maybe if the economy improves, it will be different.”

Gherardi said his companies own the building as well as the restaurant business and is hoping to sell both.

Cody’s general manager Victor Prusinowski said today he is currently “in active negotiations” with a group of prospective purchasers.

“Hopefully we’ll know something more this week. It’s a great location. It really should sell,” Prusinowski said.

According to Suffolk County records, the current property owner, Downtown Rhd Holdings LLC, purchased the property in October 2006 for $1.1 million.

The longtime home of Villella Shoes, the building was sold and converted to a restaurant called Michael’s on the Boardwalk, which operated there from 2006 to 2009. In 2009, Casa Rica Restaurant and Sports Bar opened there. It closed in November 2010 after numerous incidents on and around the premises — including serving alcohol to minors arrests, fights, a stabbing and a machete attack that seriously injured a patron — led to charges and a license revocation hearing by the State Liquor Authority.  Casa Rica’s operator, Potrerillo’s Corp., surrendered its license and closed the bar in November 2010.

Editor’s note: This article has been amended to omit reference to the ownership of Tweed’s Restaurant and Buffalo Bar.