Sweet Home Waimanalo, a restaurant, market where local artisans sold their wares, and classroom facility, has closed and been dissolved as a business entity.
A breakdown in the partnership that owned the operation is at the crux of the matter, according to majority owner Kevin Vaccarello, as well as former one-third owner Joanne Kapololu.
The closure last month left 16 employees without jobs and without a final paycheck for their last two weeks of work.
Kapololu led a group of employees to the state Department of Labor and Industrial Relations on Friday to file a complaint against Vaccarello, which could take weeks to resolve, she said.
Vaccarello told the Star-Advertiser that Kapololu had withheld funds from restaurant receipts for a month and alleged that she had kept the money for herself, but Kapololu said the funds she withheld are accounted for in the company’s bookkeeping records and were withheld to make sure vendors and employees would receive payment.
"I never tried to hide the money," she said.
Early Friday, Vaccarello said he had filed a police report alleging theft of the funds, but later Friday said he would withdraw the complaint.
Vaccarello said he bought the business five years ago from Dave Campbell, owner of Palaka Moon Farm in Waimanalo but better known as the brewmaster for Sam Choy’s Big Aloha Brewery and other Hawaii business ventures.
Vaccarello convinced Kapololu, a longtime friend and former Hawaii resident, to return to the islands to run the operation given her long background in the food service industry, he said.
She was to become a partner through a sweat equity agreement, on a handshake among Vaccarello, Campbell, who retained an interest in the company initially, and Kapololu.
"It was all verbal, nothing was written, because we were friends," she said.
Campbell later withdrew from the business, and Kapololu increased her equity to 34 percent from 20 percent.
Details large and small of what transpired over the next few years are contentious and disputed, including the reasons behind what Vaccarello says is a $70,000 lien against the business filed by the county relating to "hard-plumbing" of the mobile kitchen to the building’s cesspool.
By the fall of last year, "she (Kapololu) didn’t want to work with me anymore, is what it comes down to," Vaccarello said. "She had offered to buy me out for less than I originally paid."
Kapololu said the $60,000 she offered is what the company books say he paid to Campbell for the business, which she had worked 12-hour days to build.
"On the operational side she did great. Phenomenal," Vaccarello said.
"We ended up hiring a third-party valuator to determine the (restaurant’s) market value and started moving down that path," he said.
The business’s value was estimated at more than $300,000, said Kapololu. No buyout agreement was reached.
Kapololu filed paperwork for dissociation from the company with the state Department of Commerce and Consumer Affairs’ Business Registration Division on April 13, but she still was managing business affairs and learned from vendors as late as April 27 that "they couldn’t cash the checks," she said.
"I just really want my employees to get paid; that’s all I care about. … I don’t care if I have nothing," Kapololu said.
Vaccarello, in the midst of demolition and renovation work at the former Sweet Home Waimanalo on Friday, is looking to what he will start in the space next.
To be called ‘Ai Love Nalo, the first word meaning food, or food plant, in Hawaiian, the space will be more than a restaurant, as was its predecessor.
Sweet Home Waimanalo was linked to the Palaka Moon Farm and other entities through the nonprofit organization Sustain Hawaii, which advocates for food sustainability, zero-waste restaurant operations, educational outreach and other programs.
‘Ai Love Nalo will have similar connections, "so that’s why it’s going to be a set of collaboratives rather than a single business," Vaccarello said. It will be multiple businesses "leveraging shared resources," which will be "an interesting test of the sustainability model for the food system," he said.
The goal for the new operation is to be "100 percent locally sourced foods, organic, hopefully … and zero waste," with an educational component, Vaccarello said.
It was the "triple bottom line" type of business that drew Kapololu back to Hawaii from Las Vegas, she said. She had dreamed of doing something "meaningful, with people that you care about … with a common goal and like minds."
"This seemed to me like an ideal situation."
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Reach Erika Engle at 529-4303, erika@staradvertiser.com or on Twitter as @erikaengle.
