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Struggling Depot on sale block BY DAVID PRESZLER The Medford Depot hasn't bounced back from its slow start and is for sale, just a year after it opened. The restaurant and brewery in downtown Medford's historic train depot is being offered for $1.4 million, owners Rodger Whipple and Porter Lombard said Friday. "We haven't recovered yet," said Whipple of the restaurant's difficult beginning. The much-anticipated opening came March 31, 1998, but the restaurant was plagued by complaints of poor service and uneven food quality. "We're all willing to admit that there were mistakes made in the opening," said Whipple. "We just didn't put out the quality of food that we should have." Whipple attributes the problems to difficulties with the depot's first chef, Mick Holub. Holub was let go just two months after the restaurant opened and was replaced with Gerard Robert, who Whipple said has turned things around. "The food has been improved considerably," said Lombard. He said sales had been declining but have been stronger this month. Still, the costly renovation and slow sales have taken a serious financial toll. "We're having a hard time trying to make the mortgage," Lombard confessed. "We didn't have a whole lot of capital to back us." Whipple bought the depot from Central Oregon and Pacific Railroad in December 1995 for $276,000. He also took out a small-business loan of more than $1 million to finance the two-year renovation and to purchase equipment. The site got its historic status in 1996 and the tax break that comes with it. The assessed value is locked in at $241,850 until 2011, county records show. The property taxes for 1998, which have yet to be paid, were only $3,480. The depot was built in 1910 by Southern Pacific Railroad for $50,000. Whipple is the majority owner of the business and of the property. Lombard and a California man named Tom Gugatta are his partners, though Whipple said Gugatta isn't very involved in the business and wants to sell his share. Whipple and Lombard both said they are open to taking on additional partners and would like to continue with the restaurant, if additional financing can be found. Whipple said they will continue to operate "as long as we can." "I've never had deep pockets," said Whipple, a Jacksonville restoration specialist and builder. "I'm a small-scale guy." The depot was first listed for sale late last year but has been offered quietly, Whipple said. One offer has been made, from Portland-based McMenamin's. McMenamin's owns a chain of more than 40 brew pubs in Oregon and Washington and opened its newest on Wednesday, at the renovated 1912 train depot in Roseburg. But Lombard and Whipple said the offer was too low and that they'd prefer to see it remain a fine-dining restaurant rather than converted into a pub. "We still have all the confidence in the world that, given time, we will succeed as a fine-dining facility," Whipple said. "We just have to survive." Changing people's dining habits and perceptions hasn't been as easy as the two hoped. "Medford people are used to (the idea) that when they want to go to fine dining, they go to Ashland or Jacksonville," Lombard said. "People don't equate downtown Medford with much of a dining experience," Whipple said. "We feel Medford needs a fine-dining establishment. "Medford has to decide whether they are willing to support something other than fast food. This is as much a statement about Medford's identity as ours." Today's Business Index Mail Tribune Copyright � The Mail Tribune 1999, Medford, Oregon USA