Licensing issue forces Black Chamber to close jazz cafe. Will it return to Beaufort?
A restaurant owned and operated by Beaufort-based Beaufort County Black Chamber of Commerce has closed its doors after the city cited it for not having a business license to operate.
Justin Rose, a city business license inspector, told the Beaufort Gazette and Island Packet that the chamber was first notified in November 2020 that the cafe inside its building on Bladen Street was being operated without a business license.
A misdemeanor citation was issued April 1.
The chamber said in a May 5 Facebook post that the Gullah Jazz Cafe was closed because of changes being made to the kitchen. “We apologize for any inconvenience, but we will provide more information later,” the post says.
The charge of not having a business license, Rose said, was later dismissed after the chamber closed the cafe, per an agreement with the city attorney. The cafe may reopen if the restaurant receives a business license, Rose said.
The chamber is a not-for-profit organization that promotes Black businesses and employment. It provides training and education and loans and other resources for entrepreneurs. It is partially funded by accommodation taxes from city and county governments. Internal struggles between CEO Larry Holman and three board members surfaced in 2020 when the three filed a lawsuit accusing Holman of failing to provide the board with financial documents and appointing his own board of directors, threatening the organization’s tax-exempt status.
Holman said this week that the restaurant did not make money and was operated as part of the not-for-profit, inside the chamber building.
Holman says the city wanted the chamber to “carve out the Gullah Jazz Cafe” from the main organization and run it as a for-profit entity, which it wasn’t, so rather than receive the ticket, it was decided to close the cafe.
“They cannot dictate to us what we are,” Holman said.
The city, Rose said, concluded the cafe’s income was unrelated to the chamber’s not-for-profit mission, and therefore IRS rules require it to have a business license.
Just because a business is a not-for-profit, it can still have business income that is unrelated to the charitable purpose, Rose noted, and that was the case with the chamber and its cafe.
The chamber advertised the cafe to the public, he said, and it was in direct competition with other restaurants.
The city had a certified public accountant examine the chamber case, Rose said.
Holman said Monday it is unclear whether the cafe will reopen.
Chefs-in-training gained experience not only in cooking skills at the cafe but also in running a restaurant, in finances, food costs, overhead and personnel, Holman said.
“It was a good gathering for folks in the community,” said Holman.
When he learned about he cafe not having a business license, Beaufort Mayor Stephen Murray said he met with Holman and Board Chairman Bernard McIntyre. The business license was discussed as well as local hospitality taxes, which bars and restaurants also are required to pay. He was told it had been decided to close the cafe until the chamber had a better handle on its future direction.
CEO, board clash in court
Board members McIntyre, John McCoy and Leroy Gilliard sued CEO Holman in November 2020. They asked a judge for an injunction to force Holman to recognize the existing board as legitimate. Holman had fired that board and installed his own, including his wife, Wilma Holman, as chairperson, before a board meeting that McIntrye called Sept. 24, 2020.
Board members also claimed Holman was mismanaging chamber money and asked the judge to force him to turn over financial documents.
Holman continues to refer to the lawsuit as frivolous. “This should have been over and done with a month after it was issued,” he said.
In December, Beaufort County Judge Marvin Dukes ordered Holman to reinstate the board and turn over the financial documents., which Holman says has been done.
McIntyre did not return telephone calls seeking comment.
The case is pending.
Chamber gets public funds
Local governments contribute funds to the chamber as part of local and state accommodations taxes doled out each year to not-for-profit groups.
In December, after the lawsuit was filed, County Administrator Eric Greenway attempted to withhold $32,000 in state accommodations tax money to the chamber until the lawsuit was resolved.
But the Beaufort County Council voted to override that decision.
The group had received $20,214 of the $32,000 as of last month, said Chris Ophardt, spokesman for the county.
The county also awarded the chamber $50,000 in state accommodations tax in October 2020 for advertising and marketing. That amount will be revisited in October for fiscal year 2022 payments, Ophardt said.
The city of Beaufort awarded the Beaufort County Black Chamber of Commerce $3,500 each in 2020 and 2021 for marketing purposes as part of its annual state accommodation tax awards to not-for-profits. The group did not apply to the city for 2022 accommodation tax funding.
