DATE: Wednesday, August 6, 1997             TAG: 9708060437

SECTION: BUSINESS                PAGE: D2   EDITION: FINAL 

SOURCE: BY JON GLASS, STAFF WRITER 

DATELINE: NORFOLK                           LENGTH:   62 lines

CITY SUIT CLAIMS NIGHTCLUB OWNERS LEFT WATERSIDE OWNING THOUSANDS

A corporation that once ran the glitzy nightspot Legends in Waterside's Festival Marketplace is being sued by the city.

The city is seeking to recover more than $22,000 in unpaid parking fees and related charges it claims is owed by Waterside Live Inc.

City attorneys said they have pursued Waterside Live for months to collect the debt, and last week filed a lawsuit against the corporation in Norfolk Circuit Court as a last resort.

``It's important that this office pursue all of the valid debts owed to the city,'' said Deputy City Attorney Jacob ``Jay'' Stroman IV.

The city has provided financial backing to the festival marketplace since it opened in the mid-1980s, including tax dollars used by Waterside's management as tenant incentives. Recently, the city put up $300,000 to renovate space for a Hooters restaurant.

Hooters is housed on Waterside's ground floor in the former location of the Bait Shack, another business formed by Waterside Live. Legends, which closed in June, operated directly above it.

Once offering a thriving nightlife that catered to the region's young professional set, Waterside Live, then doing business as the All-Star Bar and Grill and Legends, filed for a Chapter 11 bankruptcy reorganization in April 1996. The corporation claimed assets of $19,561 and liabilities of $715,223.

Records in Norfolk's U.S. Bankruptcy Court show that 38 creditors filed claims against the corporation. It emerged from bankruptcy protection in October 1996, according to records.

Virginia Beach attorney Edward R. Stolle, listed by the state as registered agent for the corporation, said Monday that he had not seen the lawsuit and could not comment.

The State Corporation Commission in Richmond lists the officers and directors of Waterside Live as Daniel R. Morgan, Ray Ford and Akbar S. Zadran. Efforts to reach Morgan, who has a hand in two businesses still operating at Waterside, Schooners and Il Porto, were unsuccessful.

Legends opened in May 1994 with a prime waterfront vista on Waterside's second-floor.

According to the city's lawsuit, the Waterside Live corporation agreed in May 1995 to pay the city $26,457 for customer parking in the adjacent Waterside garage. A contract called for the debt to be retired in monthly installments over 24 months, but 15 months of payments were not paid when due, the city claims.

The money sought by the city includes a balance of more than $17,890 in parking fees, plus penalties of $750 and interest of $3,506 tacked on as late charges.

Vann Massey, general manager of the Waterside Marketplace, said he terminated the lease on Legends in June. Waterside is among the creditors owed money by Waterside Live, Massey said. The debt is less than $100,000, he said.

``We took possession of the space and we closed it because we knew that there were other creditors that wanted to come in and collect what they could,'' Massey said. ``I took the initiative to protect my assets. It has value to us.''

Massey said the space formerly occupied by Legends is being shown to prospective tenants but has remained vacant since the nightclub's June departure.

``We look at it now as a wonderful opportunity,'' Massey said. ``It offers one of the best views between Atlanta and Washington. We think we'll come up with something terrific to complement Hooters.''

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