ANDERSONVILLE — Financial problems, including unpaid state taxes, have forced Pie Hole Pizza Joint to close in Andersonville — the second Pie Hole location to close this month.
Pie Hole, which opened a year ago, was open until 3 a.m. on weekends, making it one of the only places in Andersonville where late-night revelers could get a slice of pizza in the early morning.
But a green sign from the Illinois Department of Revenue posted on the front door at Pie Hole, 5001 N. Clark St., reads: "This business' certification of registration is revoked" and it's now shuttered.
A post on Pie Hole's Facebook page Sunday didn't mention any tax issues but indicated financial problems "made it necessary to throw in the towel early."
"We were certainly hoping to hang out for the duration of the month, especially looking forward to being open for the [Pride Parade] — a financially helpful time of the year," read the post by Pie Hole owner Doug Brandt. "But in the end, we made the difficult decision to cut our losses rather than risk the chance that things could possibly get any worse for the employees, for the company, and for the brand."
Department of Revenue spokeswoman Susan Hofer wouldn't share any specifics about Brandt's situation, citing confidentiality issues. But she explained "what that means when we put a sign on the door is that the business has failed to pay the state either sales tax or withholding tax for its employees."
"The last thing we want to do is shut down a business, because they're not collecting any taxes if they're not open," Hofer admitted. "But ... we can't let businesses collect money on behalf of the state and not give it to the state."
In 2012, when Pie Hole's Lakeview location closed temporarily, the Windy City Times reported that Brandt said he was behind on paying sales taxes to the state, which caused the city to withhold a business license and levy heavy fines. Last week, Brandt said he was permanently closing his Lakeview location because of various money problems after a 10-year run.
He said in an interview last week that launching the Andersonville location too soon stretched his budget. Faulty equipment and repairs hurt his bottom line, and a winter slowdown in business exacerbated issues, according to Brandt.
Despite those roadblocks, Pie Hole was honored earlier this year as Andersonville's best new business at the Andersonville Chamber of Commerce's annual awards gala.
Aside from back taxes, Brandt also owes money to 11 community members whose unsecured loans helped open the location. He received more than $30,000 in unsecured loans to open the Andersonville location via LendSquare.
The startup asks community members to give business owners two-year loans that are paid back with interest.
As of Monday, Pie Hole "has six months of payments remaining on their original loan amount of $32,700 to their 11 local lenders," according to a statement from Lendsquare that said his balance is about $10,000.
Lendsquare emphasized that it's been in discussions with Brandt and that he is committed to repaying lenders. The statement said that if he can't continue to pay "we will attempt to collect on our lenders’ behalf, either by referring his loan to a collections agency or pursuing collections directly."
"We think [Pie Hole's] commitment to repay lenders is proof positive that when loans are local, communities grow stronger," the statement said.
Edgewater resident Mike Crosby loaned Pie Hole $5,000 through Lendsquare. The computer applications developer said he's still owed payments through the end of the year.
Crosby wrote in an email that he sympathized with Brandt, "as I believe this was not an easy decision for him to make" to close Pie Hole.
Crosby said he "was aware of the potential risks prior to making the investment, and I still believe in trying to support local businesses."
"I considered the loan an investment in small businesses in the area," Crosby wrote. "Unfortunately, small businesses may struggle and fail for various reasons."
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