Bigger question may be the suspended sentence . . . maybe because it would be over he’s in the clear. But if a judge were to “unsuspend” it, he’d already be facing 9.5+ years.
My wife called TDC and they confirmed what I said above. Thanks.
A few thoughts, in case they’re helpful to anyone (and if you disagree, please, do as you like - you don’t even have to ask me, much less get me to agree with you!):
Scott’s plainly right; the quoted testimony does not say that the local storage LLCs are solely owned by Lazar. I have not seen original corporate documents, but like Scott I was told directly by other people that they owned part of the business (and I came in through them, not Lazar). Can’t prove they weren’t lying to me, but I doubt it, and I haven’t seen evidence here to the contrary.
This is quite different from CWC or PC. Those were businesses where one paid up front in hopes of delivery later, and customers were creditors of the business. There was nothing to sell but a boatload of liabilities This is a pay as you go business. Put yourself in the shoes of a creditor. Let’s assume Lazar is a billion dollars in debt and has ten cents to his name, and that he is the sole owner of all the Domaine businesses. That seems sufficiently conservative. If you’re his creditor, the question you want to ask is whether you can sell the business for more than you can sell whatever hard assets the company owns. If so, you want to sell the storage business as a going concern, because it’s making enough money that you recover more than you would by shutting everything down and selling the air conditioners (or whatever) for scrap. I surely haven’t seen their financials to tell you what the answer is, but you can form a view on whether you think they’re probably making money on the storage business such that there’s something for creditors to sell even if the other investors can’t just remove Lazar as manager and take over.
I’ve looked at the DC licensing in some detail. Big caveat: I’ve looked at what the law says, not what DC ABRA does, and they could absolutely be different; furthermore, this isn’t legal advice to anyone. However, it doesn’t appear that one needs a storage facility permit to store wine for individuals. For licensees, yes - and Domaine does hold for wholesalers, if one looks at the addresses on liquor licenses, which is why they hold a license. I don’t know whether they’re reliant on those customers to keep the lights on. However, I’m pretty sure that one doesn’t need a storage facility permit to store for individuals; not only is that consistent with the words of the regulation, but one of the other two significant storage businesses in DC is a retail shop, which is clearly ineligible to hold an off-site storage permit under the same rule Domaine got in trouble for (23 DCMR § 205.5, for those playing at home.) I haven’t been able to find any evidence that the other is licensed, but it looks like ABRA doesn’t post off-site storage permits. There also doesn’t appear to be a flat bar against people with felony convictions holding a liquor license, though there is a requirement for background checks of managers and 25%+ owners. I don’t know what ABRA does in practice.
What does all this leave me? It looks to me as if Lazar is likely only one investor; even if he’s managing the show he’s replaceable should he wind up in jail, bankrupt, tarred and feathered, or whatever you think is going to happen to him; and the DC storage business is likely profitable on its own - the space it’s in isn’t good for much else, and I can’t imagine the liquidation value of the assets in there is substantial - rather than relying on the Lazar wine brokering business (which it predates) to subsidize it. That leaves me thinking the storage business isn’t at tremendous risk (and, of course, unlike CWC and PC, there’s no question that you own wine you bought elsewhere and placed in storage). Personally, I don’t assess the risk as great, but you may differ. As I noted, I came to this through one of the other (now former) owners who was a friend, not Lazar (whom I think I’ve met once), and don’t see rehashing whatever he did in Missouri ten years ago as all that relevant. Again, you may differ. That’s just fine. You should form your own view.
FWIW, I had a little over $400 in wine I had purchased from their Wine Market and hadn’t received the wines yet. I called and requested a credit to my credit card for the full amount and received it.
Thanks for your summary, Paul, it’s very helpful. Considering the speed at which they filled up the space, I can’t imagine that the DC storage facility isn’t profitable and that’s without know a thing about their costs.
Just curious, if you feel like sharing, why did your friend sever his relationship with the business?
Not my story to tell, and I don’t know all the details in any event. He did say affirmatively that he was not encouraging others to leave (and in a way that sounded like “nah, don’t pull out on my account” and not a nondisparagement clause).
Thanks for the heads up. I store wine at the STL facility, which at this point is operating normally in this regards. I did buy a few bottles via the Wine Market, but they were delivered just prior to the arrest. My home cellar expansion timeline just got compressed!
It looks like I won’t have to wonder much longer about whether my wine stored in Chicago will be confiscated or not. I just got my renewal invoice. They raised the rental of my locker by 50% over last year! I’m in the process of moving it back to the place I used before Domaine, at a rental of 50% less than the new Domaine rental and 33% less than my 2016 rental, for the same size space.
50% is a steep increase.
Wonder why? 
A special rate for Berserkers? ![[stirthepothal.gif]](/uploads/db3686/original/2X/f/f40faec63ca1018898a40805efbf9f0066a3d205.gif "[stirthepothal.gif]"){kind=small}
![[wink.gif]](/uploads/db3686/original/2X/0/04707e6a7bbb03e0153e349d8a9270d30e1e9525.gif "wink"){kind=small}
Something very similar happened to me when I was a Domaine Chicago customer. No explanation, no warning etc. Just an invoice with a huge increase attached. I promptly gave notice I was leaving for a cheaper alternative, and to their credit Domaine was very professional about it, including receiving and holding packages that I failed to change addresses on.
But I can’t help but think they intentionally sneak price increases into their strategy on the hope customers won’t move their wine, because moving wine is not fun.
Same strategy as any storage unit anywhere.
Where is that John?
I’m at East Bank Storage. Not much in the way of frills but the folks are nice enough.
Good grief. You plead guilty, the state asks for 10 years, and a lenient judge gives you 120 days… and instead of walking out the courtroom thanking God at your good luck… you APPEAL??? Isn’t it the case that even if you won such an appeal, it would just go down again to a lower judge for resentencing, and you could get more? Who in their right mind would ever do such a thing? (Royally pissing off the judge who saved your ass from doing some very hard time?)
It’s Domaine Chicago Corey.
I did get a call pretty quickly after I posted this with an explanation. It seems that when they moved locations about 18 months ago (could be less), they put me in a larger unit than I had been in in the old space. When I got my renewal last year, it was up 10% with no explanation, but I didn’t complain about it, to Tom Wheltle’s point. But then this next one hit, raising it another 47%. The explanation was that it was a bigger unit and if I wanted, I could move back to a unit that is the size of the one I was in at the old location, for close to the same price as 2016.
While that seems like an explanation, my reality is that I didn’t ask to be moved to a larger space when they moved locations, they just did it. So the lack of explanation caused me to look elsewhere, and I found a location that’s about a mile from Domaine with the same size locker for 50% less than the renewal rate. They won’t have the amenities for sure, and the Domaine guys are really good to work with if I need a service (which happens almost never), but at the end of the day, I just don’t like the way they did business here.
DOMAINE ST. LOUIS SERVED WITH A NOTICE OF CONDEMNATION
On December 21 the Building Department for the City of St. Louis served Domaine St. Louis, and posted the property located at 3300 Samuel Shepard Drive, St. Louis Missouri 63103 with a Notice of Condemnation of the property. The Notice of Condemnation orders the business premises to be closed ten days after the Notice was issued (i.e. by December 31), unless the violations giving rise to the Notice of Condemnation are cured within that time period, or a formal appeal is filed within that time by the cited business. Domaine Wine Storage is expected to file a formal appeal next week.
The Notice of Condemnation is based upon the fact that Domaine Wine Storage does not have a business license issued by the City of St. Louis. Moreover, neither Domaine Wine Storage or Cellar Advisors has ever had a business license issued by the City of St. Louis. Additionally, there is apparently no Certificate of Occupancy issued in the name of Domaine Wine Storage for that address. It is my understanding that the City of St. Louis contends that no business license can be issued given that the property was being used to illegally sell and ship wine. There also appear to be issues about licensing as a public warehouse for storing alcoholic beverages. For example, Missouri Revised Statutes Section 311.370 provides as follows:
- “Every person, firm, partnership or corporation who shall keep or store any intoxicating liquor in any warehouse, or other storage place in this state, shall at the time such liquor is received and stored, notify the supervisor of liquor control and furnish to him a list of the kind and quantity of such intoxicating liquor, and the name and address of the owner thereof, and upon the withdrawal of said intoxicating liquor, or any part thereof, shall notify said supervisor and furnish to him the name and address of the person to whom such intoxicating liquor shall be delivered, the kind, quantity and amount thereof. A violation of any of the provisions of this section shall constitute a misdemeanor.”
I am informed that Domaine Wine Storage does not hold any type of license entitling it to store alcoholic beverages within the State of Missouri and that no such reports have ever been filed by Domaine Wine Storage or Cellar Advisors. As the readers of this thread are aware, by virtue of Mr. Lazar’s prior felony sex crime convictions, neither he nor any company of which he is an officer or manager can obtain a license involving alcoholic beverages within the State of Missouri.
The information from the City of St. Louis that Domaine Wine Storage has no business licenses of any kind is dramatically at odds with the email dated November 18, 2016 that Domaine sent to all of its customers. (For the complete text of that email see this post on page 5: http://www.wineberserkers.com/forum/viewtopic.php?p=2147221#p2147221 ) That email stated in pertinent part as follows:
- “Domaine Wine Market Operations at our storage warehouses are not affected in any way. All wines in storage accounts are safe and accessible. These are distinct businesses, licensed and permitted in the states where they are located. Since the inception of each facility, we have been represented by highly regarded legal professionals who set up and manage our storage compliance and continue to do so. Likewise, our advisory and freight services are operating as usual.”
Based on the information from the City of St. Louis, and the Notice of Condemnation posted on the building, this statement appears to be false.
Domaine’s St. Louis property was posted with a sign indicating the pending Condemnation of the property on December 21. As might be anticipated, the sign created considerable concern among Domaine’s customers when they were seeking access to their wine lockers. The sign was taken down, although the circumstances of the sign’s removal are not clear at this point. I’m informed that the sign will once again be posted on the premises beginning on Monday or Tuesday. The St. Louis City attorney has agreed that Domaine’s customers will continue to have access to their wine lockers during the anticipated appeal of the Notice of Condemnation.
The hearing on the appeal from the Notice of Condemnation is supposed to occur within 30 days after the appeal is filed. If Domaine is not able to obtain the necessary business license and Certificate of Occupancy, the building will be closed to public access. Unfortunately, this will present a serious problem for the people who store wines at that location.
While Domaine Wine Storage does currently have public warehouse permits or licenses for its wine storage operations in Chicago, Washington DC and Edison New Jersey, Domaine Wine Storage similarly has no licensing of any kind for its operation in Napa. Domaine Wine Storage has never registered to do business in the State of California and apparently pays no income or sales taxes in the State of California. The Domaine Napa warehouse operation is unlicensed and appears to be operating in direct violation of Business & Professions Code Section 24041 which provides that: “A license at a public warehouse shall be required by an out–of–state business whose alcoholic beverages come to rest, are stored, and shipped from a public warehouse in California.” This statutory language precisely describes the “Domaine Napa” operation. Domaine Wine Storage holds no such license. Moreover, California law, like Missouri law, would preclude Domaine from ever obtaining the required license by virtue of Marc Lazar’s felony sex crime convictions.
As I said before, to which some rebuked me, get your wine out of any facility associated with Lazar ASAP.
Andy. I don’t think it’s a rebuke. It’s a tradeoff between the perceived risk vs the amount of work necessary to switch to another facility. If this transfer was like moving stocks between brokerage accounts, I can’t imagine that anyone wouldn’t do the switch. But the work involved here is meaningful and so there’s a tradeoff. People will both analyze the risk differently based on a variety of factors, and will also price the effort differently, also based on a variety of factors. One person can decide to switch and another can decide not to switch, and both are ‘correct’ based on their individual preferences.
Peter
If you read back through this a couple people were like “I know so and so and they said it all was ok” and “I got an email that said it has nothing to do with the storage locations”, yada yada yada. Despite people with some experience telling them otherwise and despite all the previous wine related issues this community has experienced over the recent years and despite all the warning signs. People effectively said I didn’t know what I was talking about and put their head in the sand and hoped all would be fine. Well, obviously it isn’t fine because he (or the LLC, company, or whatever shame corp he’s set up) has no licenses to operate. That means exactly as I said earlier. At some point someone will lock the doors and everyone will be screwed.
At least, for this location, they are giving a short notice. It’s not much, but at least it’s something. Given the holiday, there isn’t much time left for people to get their stuff out. It totally sucks on a number of fronts, including the timing as a lot of people are traveling and not home.
I’ll say it again in all caps. IF YOU HAVE WINE HELD IN ANY BUSINESS RELATED TO LAZAR GET IT OUT RIGHT NOW. NOT TOMORROW NOT NEXT WEEK, TODAY
Before providing any further risk analysis or advice here, please inform readers of the advice you gave in the midst of the Premier Cru crash (i.e., including that contained in the posts you deleted or modified post-crash).