Graces 5 Closes After Losing Business License Over Unpaid Taxes

The allergen-free restaurant owes $38,340 in unpaid taxes, according to a state notice posted on its door.

Healthy-eating establishment Graces 5 has closed its doors after apparently losing its business license over unpaid taxes.

The restaurant, located at 8110 164th Ave. NE, sat dark and empty Tuesday evening. Taped to its front door was an "order revoking certificate of registration" from the Washington State Department of Revenue.

According to the notice, Graces 5 owes $38,340 in unpaid taxes.

Meanwhile, customers have posted messages of both support and frustration on the business' Facebook page. Several people said they had made reservations for a special occasion only to get to the restaurant and find it closed.

Others are concerned because they recently purchased a Groupon deal to the restaurant. (Groupon says on its website that it offers full refunds when businesses close permanently. Redmond Patch has contacted the company for more information and is awaiting a response.)

Graces 5 posted the following Facebook message Monday:

We apologize for all the confusion. The negotiations with the state have been much more complicated than we expected. The offer we had before thanksgiving fell through and we are working on a resolution. We appreciate all the times we have had the opportunity to serve meals to the allergy community. 

In terms of not closing our reservation book, we are very sorry. We hoped this would be resolved each day that it hasn't been. 

Our desire is to continue to serve this community but we may have to face the reality that we need to take a few steps back and look at ways to reopen in the future.

Redmond Patch's attempts to reach Graces 5 owner Timothy Sharpe have thus far been unsuccessful. 

When a business falls behind on taxes, the state's typical procedure is to first reach out and offer a partial re-payment program, said Mike Gowrylow, a spokesman for the Washington State Department of Revenue. If those attempts are unsuccessful, the state will then place a lien against the business. 

If the business continues to fall behind, the state waits 30 days and then begins revocation proceedings—"the last step we ever take," Gowrylow said. The notice posted on the door to Graces 5 means its business license has been revoked, he said.

Gowrylow said it's possible for businesses to re-open in cases like this, but they must first pay all owed taxes and post a bond equal to six months of projected tax obligations.

“There’s certainly a path to reopening, but it does mean you have to take care of those back taxes and post a bond so that we’re confident if you do re-open, you won’t start falling behind on your taxes,” he said.

Sharpe and his wife, Katherine, opened Graces 5 in August 2011 in an old craftsman home. In a Redmond Patch story about the restaurant's opening, Sharpe described his vision for a place that would appeal to both people with special diets and regular diners. 

“We’re not trying to make up new dishes,” he said. “Our goal is to make regular food awesome.”

Redmond Patch will update this story with any new information as we receive it.

Anka Foltz December 14, 2012 at 06:04 AM
I loved the food they served!!!! It was delicious and very nutritious.... A hard combo to find in restaurants.... Soooooo disappointed they are curently closed for business... Really hope they will reopen soon, maybe under a new ownership....
kathy love January 19, 2013 at 07:34 PM
they are open anka foltz with a very similar menu under new ownership~
Lily Fisher February 03, 2013 at 04:41 AM
Please don't judge
t February 04, 2013 at 05:51 AM
If they are open, do you have contact info?
Taylor M. February 14, 2013 at 08:47 PM
They are opened as Hugo's resteraunt- it is absoulely delicious with all the same food (the head chef is Hugo) You really should go!:) http://www.hugosorganic.com/


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