Auction of Roy's Place in Gaithersburg called off
Restaurant pays off mortgage, secures new financing at 11th hour
Sandwich eaters, rejoice.
Roy's Place, a Gaithersburg restaurant known for its oversized, tongue-in-cheek sandwich offerings, will remain open.
The restaurant narrowly avoided a foreclosure auction scheduled for 11 a.m. Thursday.
"It's really great news," Roy's Place manager Ramon Chavez said. "We've still got a lot of stuff to do."
Tranzon Fox, the auction house running the sale, emailed an announcement Wednesday evening at 5:02 p.m. informing potential buyers that the sale of the 3,280-square-foot brick building had been called off.
The borrower was able to pay off the loan cancelling the foreclosure, the email said.
The restaurant went into foreclosure because Roy Passin Inc. is behind on mortgage payments to lien holder Bridge Fund I LLC. The $539,108 mortgage for 2 and 4 E. Diamond Ave. was taken against the property in May 2009.
Chavez said the restaurant had been losing money or breaking even for about ten years when Roy and Melinda Passin took out the loan, shortly before Roy Passin died, to pay off vendors and utility bills, increase advertising and remodel parts of the interior.
Much of that money was lost and several bills were not paid due to mismanagement by former employees, said Chavez, who has been the general manager for about six months.
"Is the place turning around? Yes," Chavez said earlier this month. "We are trying really hard. Everybody at Roy's really cares about the place right now."
The Roy's Place properties were valued at $1,227,200 in 2010, according to state tax records.
If it had been auctioned, the city would have lost an iconic eatery that has operated on East Diamond Avenue since 1971. The building was to be sold with all of the fixtures and furnishings including the vintage movie posters, ads, sheet music, old newspaper articles, letters from patrons, calendars and photographs that cover the carmine-colored walls, and the restaurant's other eclectic decor.
Chavez said he shared news of the auction cancellation with the restaurant's employees Wednesday.
He said the restaurant plans to move forward now, focusing on increased advertising and adding outdoor eating space.
Roy Passin, the restaurant's namesake and longtime owner, died in 2009 at age 87.
Passin opened the eatery in 1955 at the old Cochran Hotel on Old Montgomery Avenue in Rockville. Five years later, Roy's moved across the street and became a sit-down restaurant, offering sandwiches such as the "Watzit" beef brisket on bread.
In 1971, Roy's moved to Diamond Avenue at the edge of Olde Towne.
Passin started construction at the Diamond Avenue property in 1970, when the lot was home to an early 1900s house that was full of fleas, according to the restaurant's website.
The building, modeled after the Point of Rock's railroad station, opened Jan. 1, 1971.
In 54 years of operation, Passin trademarked the names of 214 sandwiches, including the gooey "Raunchy Raymond" and the five-decker "Bender Schmender." Both sandwiches are among the restaurant's most popular.
Passin grew the menu to 23 pages, cooking up sandwich styles based on ingredients he had on hand and suggestions made by friends along the way. They include his first sandwich, named for a neighbor's dog and trademarked "The Keswick ap Fangworthy."
Also buried in the menu is The Good Cold Sandwich two stale heels of bread enclosing a freshly made ice cube, which is featured in a restaurant review hanging above a table at the back of the dining room.
The menu was recently changed and color coded, allowing diners to search for sandwiches based on their choice of meat; brisket sandwiches are all highlighted in blue now.