Tampa's King State files for bankruptcy reorganization as it deals with surrounding construction

Last month, Tim McTague, co-founder of King State, told city council that his business’ problems with ongoing construction on surrounding streets would probably lead the Tampa coffee shop and restaurant to file bankruptcy. That day has finally come.

According to court records filed this week and first reported by the Tampa Bay Business Journal, King State filed for Chapter 11 bankruptcy reorganization.

This style of bankruptcy filing will allow King State to keep operating as normal on the customer-facing side, co-founder Nate Young told Creative Loafing Tampa Bay.

“We obviously have to get lean, and we’ve been doing that since September, when all of [the construction woes] started,” he said, adding that King State revamped its menu, streamlined its closet of a kitchen, and worked to improve margins on the backend.

“It's just a chance to kind of reorder our plan. And take a look at what we can do to continue. It’s business as usual,” Young said, adding that no staff will be laid off.

He thinks the business will now be able to do more as far as planning special events. One such event includes King State’s Tampa Bay Beer Week Lagerfest on March 7, which used to happen at The Brutalist, a taproom and contract brewery King State used to run in St. Pete.

Young said in simple terms, The Brutalist—a 10,747-square-foot building, constructed in 1981, that went on the market for $2.7 million last month—fell victim to its location inside a neighborhood, plus added pressure brought on by an expanded canning line, new tanks and more. “We went for it as best we could and you know, sometimes it just doesn't pan out,” he added.

Lagerfest is now happening at Magnanimous Brewing’s new location inside the old 7venth Sun Brewery on 6809 N Nebraska Ave. in Seminole Heights.

In the bankruptcy filings, King State reported a net loss of $72,600 between last October and December. The paperwork also lists between $1-$10 million in liabilities, plus $500,000 in estimated unsecured claims.

“The claim is encompassing the losses that we have from before and where those losses will be,” Young said.

Last month, McTague told Tampa City Council that King State had already experienced a six-figure loss in the first quarter. He and Young told TBBJ that the business estimates that “total losses will climb to $300,000 by April.”

On Jan. 12, McTague told WMNF public affairs program The Skinny that what finally set the claim in motion was realizing that King State was five figures below its numbers during the 2020 Covid shutdowns.

“The only way any businesses like ours got through that is with forgivable non-debt, financial aid. And that's all we're asking for. So we extrapolated the losses that we can obviously prove. I pulled all of our reports for four years, it's proven,” McTague told WMNF. “And then realizing that it's three to four to five more months, we just forecasted what those losses would extrapolate over six or seven months.”

Construction around King State, located at 520 E Floribraska Ave. near I-275, is related to the hundreds of millions of dollars the City of Tampa is pouring into upgrading infrastructure including water pipes. Work began last September and will continue until at least April before another complete streets project starts in May.

King State made its issues with construction—which more or less blocked off all access to the business—public in a big way last month. Dozens showed up the Tampa City Council to voice their concerns, and while councilmembers don’t have the power to help King State directly via funds, councilwoman Lynn Hurtak did help the business with creating maps and expediting signage saying the shop was open.

“From our shop local campaigns to our small business navigator aimed solely at helping Tampa businesses thrive, the success of our local business community is and has always been a priority for the city,” City of Tampa spokesperson Adam Smith told CL. “Bankruptcy, often years in the making, is difficult for any business owner, and we are here to help King State however we can as they navigate through this challenging time."

McTague and Young, however, said their claim with the city has not been resolved.

Young said this route gives King State, which recently opened a location in St. Petersburg, a chance to keep operating and keep its head above water. He is not interested in cutting the losses and closing the shop, and he doesn’t want King State’s claim with the city to go into any kind of litigation.

“We knew we wanted to keep trying to give it our all so it's not a fun thing. It's not an easy thing. It's not simple at all,” Young said. “It's like, ‘God, it has been fucking hell.’”

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