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Vannelli’s will be closed no later than Oct. 31. Owner Ron Vannelli opened Vannelli’s on the Lake in 2010.

Lease negotiations and financial issues caused closure

After more than 11 years as a local restaurant on the corner of Broadway Ave. and Lake Street, Vannelli’s on the Lake will be closing later this month. 

While Oct. 31 is the current projected date of closure, it could be earlier, said owner Ron Vannelli. He owned Vannelli’s on the Green, now currently Stella’s, from 1990 until 2000, when he sold the property adjacent to Castlewood Golf Course. Then in 2010, he opened Vannelli’s on the Lake at the current location.

According to Vannelli, the closure stemmed from rent increases and late fees accrued during the pandemic Dan Hebert, the senior vice president of commercial accounts for Gaughan, who owns the property, denied that rent increses were a part of the equation. 

Vannelli said during the pandemic, he worked with Gaughan through financial impacts from being closed through verbal agreements on rent adjustments over the last year and a half. He claimed that through the pandemic, verbal arrangements were made to flex the exact amount of rent based on what Vannelli’s was able to bring in. According to Vannelli, a change was made later, when Gaughan determined to follow up on late fees and an increase in rent, which was the final tripping wire for his restaurant. 

“We had verbal agreements, and some other things, that were declined ... because of the fact they weren’t in writing,” he said. “I was taken aback by this whole thing when it first started.”

He was at first informed in late July he was on default with Gaughan, and Vannelli was under the assumption they could work it out. Gaughan, however, claims that Vannelli didn’t pay the correct rent agreed upon, and they expected that since he received a PPP loan, that the company would receive the rent payments agreed upon in the lease.

“We tried to negotiate that back, and at some point that was not acceptable,” Vannelli said.

After more than 11 years at the location, and with another 2 1/2 years to go on the lease, Vannelli said it’s difficult to not have hard feelings about the closure.

“Right now we’re just trying to fulfill obligations in October for weddings and celebration of life,” Vannelli said. There are roughly 30 events that are being canceled in November and December due to the closure.

“We didn’t cause this to happen. ... And when there’s a binding lease, there’s only certain things you can do,” Hebert said.

Vannelli had plans to retire soon, but said, “This is a big financial loss, and I have to figure things out again.”

Hannah Davis is the Area Editor at the Forest Lake Times. You can contact her at hannah.davis@ecm-inc.com or (763)233-0709

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