For many southern Wisconsinites, the Shamrock Bar, 117 W. Main St., was their favorite place to grab brunch. For others, it was a safe space to be openly gay, lesbian, bisexual and transgender. Second Saturdays were traditionally Bear Nights. At Christmastime, patrons plucked paper tags from the bar's giving tree, adding gift requests from AIDS Network Madison clients to their holiday shopping lists.
The Shamrock has operated for decades. Gaining increasing popularity among GLBT patrons in the 1980s, a change in ownership in 1985 marked its unofficial transition into a gay bar. This makes it Madison's longest-lived gay bar, based on a list maintained by the Wisconsin GLBT History Project.
"When I was there it was always crowded," says Steve Starkey, executive director of the OutReach community center. "It seemed to be a real gathering place in the community."
Given the bar's longstanding presence, owner Glenn Jahns' July 1 announcement on the Shamrock's Facebook page was unexpected:
"We have decided to close and restructure," he wrote. "We would like to thank our community for all its years of support.... I look forward to serving you again with our new concept."
Patrons responded within minutes.
"WTF?"
"This can't be true!"
"Wha? Glad we made it to brunch yesterday!'
The Shamrock's closure is only the latest in a long history of troubles. Interviews with patrons suggest that these troubles were an open secret in Madison's GLBT community.
"Unfortunately for Glenn, his staff and patrons, this is not a new experience," says Ald. Mike Verveer, who represents the district where the Shamrock is located.
"In prior years they've either been closed for a day or two -- a couple of weeks at the most. Some years there hasn't been an issue, and they were able to remain open."
License expired
Verveer says the immediate reason the Shamrock closed was the expiration of its liquor license. All liquor licenses in Wisconsin are released by the city clerk's office and expire June 30 each year. The city clerk provides the Madison Police Department with a list of establishments with expired licenses, and they often close these businesses midnight June 30.
"It is my understanding that Madison police officers came in and informed the staff that they could no longer serve alcohol legally," Verveer says. "So the bar closed that night."
Verveer says Jahns (who operates the Shamrock under the corporate entity Rainbow Clover LLC) applied to renew the bar's liquor license, and the city granted it to him. However, the clerk's office cannot issue the license because Jahns owes Madison annual personal property taxes, according to City Treasurer Dave Gawenda.
"It's a tax that's a function of the value of the furnishings and equipment used by the business to operate," he says. "Let's say it's a restaurant or a bar: the tables, the chair, the refrigerators."
The deadline for submitting payment for annual personal property taxes is Jan. 31. Gawenda says in past years, the city eventually received payments from Jahns -- sometimes at the end of June, when the Shamrock's liquor license was about to expire. The amount of time it took for Jahns to pay, and subsequently the clerk's office to release the liquor license, helps explain why the bar briefly closed after June 30 in previous years.
"This year, for whatever reason, we still haven't received payment from them," says Gawenda. "The original amount of the bill was $2,219.20. The current amount due is $2,418.93, that extra being the interest that's due because it's six months late now."
Gawenda says that over 90% of businesses pay their personal property bills on time. He notes that owners who close their businesses usually do so because they owe money to multiple entities, not just the city.
"It would be very unusual for a business to decide they had to close because they couldn't come up with $2,400 in taxes," he says.
Delinquent tax
The Shamrock Bar's closure would not significantly differ from its temporary closures in years past, except it now owes a considerable amount of money to the state.
The Wisconsin Department of Revenue compiles a list of delinquent taxpayers each quarter, as required by state law. Based on calculations (see chart below) from the department’s July release, approximately 573 Madison individuals and businesses hold outstanding taxes, including income (49.6%), sales (20.2%) and withholding (13.9%).
Laurel Patrick, communications director at the Wisconsin Department of Revenue, says a business has to owe more than $5,000 in delinquent taxes to be placed on the list.
"That can be outstanding taxes from one year [or] five years," she says. "They just have to have delinquent tax."
The department updates its list of delinquent taxpayers every quarter. At press time, Rainbow Clover LLC owes the state $28,166.46, all in sales tax. Compared to all of Madison's delinquent taxpayers (see graph below), the Shamrock owes less than the $40,602.41 average, but owes more than the $21,751.38 average within the 53703 zip code where the bar is located.
Like the city treasurer’s office, the Department of Revenue notifies City Clerk Maribeth Witzel-Behl and her staff when it places a hold on a liquor license.
"It doesn't mean that the license can never be issued," Witzel-Behl says. "It just means that the state will not allow us to issue the license until the business pays their delinquent state sales tax."
The Wisconsin Department of Revenue also posts the names of businesses that have had their seller's permits revoked; Rainbow Clover LLC lost its seller's permit May 15.
"The state allows the Department of Revenue to revoke a seller's permit if any tax administered by the Department of Revenue is not paid," says Patrick. "A business cannot operate without a seller's permit."
Without paying its state taxes, submitting a petition to the state for a lower settlement amount or declaring bankruptcy, Rainbow Clover LLC will not be able to regain its seller's permit. Without a seller's permit and with overdue city property tax, Jahns cannot renew the bar’s liquor license. Without a liquor license, the Shamrock cannot operate as a tavern.
Gawenda says his office is willing to set up a payment plan where the Shamrock could pay the city back in installments.
"We're not about trying to put anybody out of business, but obviously we've got an obligation to all the taxpayers to collect the taxes," he says.
That still leaves the state sales tax. Whether Jahns reaches a settlement with the Department of Revenue or the Shamrock's closure will be permanent remains a matter of speculation. Jahns could not be reached for comment.
Rocky beginnings
Looking to the Shamrock Bar's recent history could explain some of its financial difficulties.
"It's quite possible that the Shamrock's problems all date back to when the bar was fraudulently sold to Glenn," says Verveer.
Verveer is referring to a man named George F. Rogers. Rogers was convicted of two felonies in October 2006 for stealing the Shamrock from its original owner, John J. O'Connell, upon O'Connell's death in 2002, and falsely representing himself as the bar's owner when he sold it for $523,581 to Glenn Jahns in April 2004. As reported by Lisa Schuetz in the Wisconsin State Journal, "Jahns had been paying $776.92 a week to Rogers, which amounted to about $30,000 as of January 2005."
For committing these felonies, Rogers was sentenced to 18 months prison time, four years supervision and six years of probation.
In January 2005, Dane County Circuit Court Judge Michael Nowakowski ordered that the Shamrock be returned to the O'Connell family, but Jahns continued to run it under contract. Rogers' shady dealings came to light in June 2005, when the Wisconsin Department of Revenue conducted a tax assessment, determining that the O'Connells, now the bar's owners, owed $15,930.15 in state taxes. Their attorneys contested the assessment, stating, "We believe that any income that was underreported to the [Department] was misappropriated by Mr. Rogers."
Jahns purchased the Shamrock for a second time from the O'Connells on Oct. 11, 2005, for $523,580.82 -- almost the exact amount Rogers had asked for the bar when he fraudulently sold it to Jahns in April 2004. Jahns also agreed to assume responsibility for all unpaid taxes and fees incurred since then. Although it is uncertain whether these fees included the Wisconsin Department of Revenue's June assessment, the Shamrock had incurred other debts prior to Jahns' second purchase. This included $3,464.46 in unemployment taxes owed to the Department of Workforce Development. The Department of Revenue filed an additional claim against Rainbow Clover LLC in March 2006 for $2,752.30. While these taxes were paid in full, the Shamrock's debt woes continued.
Ongoing debts
According to April 2010 court records, the O'Connells' attorney, Richard King, filed a complaint in Dane County court alleging Rainbow Clover LLC was in breach of contract for not making its December 2009, January 2010 and February 2010 payments on the Shamrock. Jahns responded in a letter the following month, writing, "Due to several unforeseen circumstances the business (Bar and Grill) has suffered a substantial loss of revenues over the last two years and has gotten behind on several of its creditors, i.e. Sales Taxes, Payroll Taxes, Inventory Suppliers."
Jahns proposed a payment schedule, after he noted, "revenues have leveled out and downsizing has occurred. The business is now able to pay its obligations and creditors."
In a June hearing, however, neither Jahns nor a representative of Rainbow Clover LLC appeared in court. The judge ruled Rainbow Clover LLC was in default of paying the O'Connells, and issued a judgment for money that included the remaining $440,073.96 balance from the Shamrock's purchase and $14,928.28 in late payment fees.
For unknown reasons, Jahns borrowed money in June 2009 under an agreement between Rainbow Clover LLC and a merchant cash advance provider called AdvanceMe Inc. Jahns would pay $63,000 of the bar's future sales in exchange for a loan of $45,000. The contract stipulated 21% of all transactions made using a Visa or MasterCard would be processed and deducted from an account specified by AdvanceMe Inc. To make payments, Jahns could, with prior agreement, transfer funds into the account using other revenue sources. Jahns also agreed Shamrock's employees would not "take any action to discourage the use of cards... as [a] form of payment for goods and services."
In November 2011 AdvanceMe Inc. submitted a complaint alleging Rainbow Clover LLC had violated its contract because the Shamrock was not using the account for all its card transactions. Additionally, the company said it stopped receiving payments from Rainbow Clover LLC after April 2011. In June 2012, Dane County Judge C. William Foust ruled in favor of AdvanceMe Inc., determining Jahns owed the company $18,115.51.
Feeling lost
Despite the Shamrock's financial difficulties, many in Madison's LGBT community have expressed support for the bar's reopening. Starkey of OutReach says the community stands to lose if the Shamrock’s closing were permanent.
"It isn't that Madison will be without a gay bar, but I think that the Shamrock had a unique kind of niche," he says. "It was a mix of straight and gay people.... I'm always sad when I see that there are less opportunities for places where we can meet."
Madison resident Shai Clark says his connection to people he met inside the bar influenced his decision to remain in Madison after moving here three and a half years ago.
"Every Monday a group of guys, myself included, met to watch Jeopardy, talk about politics and bitch about life," Clark says. "Some of them have known each other for dozens of years, others for a handful. But we all feel as though the Shamrock has given us a venue to watch our lives play out." With the Shamrock's closure, Clark says he and his friends are feeling lost.
"A bit like a diaspora community," he says. "While we still see each other most Mondays, it's fragmented, with some [of us] not wanting to go to various other establishments.
"We could all agree on the Shamrock."
[Editor's note: This article has been corrected to note that a 1985 change in ownership of the Shamrock marked its transition into becoming a gay bar.]
