Tavern restaurant group selling properties, closing locations as owners split

As its mother-and-son founders untangle their finances and go their separate ways, Tavern Hospitality Group has closed its namesake restaurants and is selling real estate.

“We finally settled our disagreement,” Frank Schultz said Tuesday of a contentious and nearly year-long legal dispute between he and his mother, Terry Papay. “We have a large property portfolio and part of that settlement is getting rid of some of the properties.”

Two weeks ago, Tavern Hospitality Group closed its Tavern restaurants in Lowry and Littleton, the last of what was once seven Tavern locations in the area. It also canceled shows at the Soiled Dove, the company’s flagship venue, which was the neighbor of Tavern Lowry.

Schultz said the Soiled Dove building at 7401 E. 1st Ave. will be sold, along with the former Tavern Tech Center building at 5336 DTC Blvd. in Greenwood Village. The building that housed Tavern Littleton has been on the market since January, listed at $3.9 million.

“COVID was a tough one to recover from on the music side,” Schultz said as he reflected on the Soiled Dove’s finances. “Real tough … it killed us down there. So, it wasn’t making financial sense and that’s why that was dictated as a property that goes up for sale.”

But the buildings ultimately may be bought by a very familiar face: Schultz, who plans to start his own hospitality group and could buy back properties such as the Soiled Dove.

“I would like to bring that back, even in a better way,” he said. “That would definitely be a few years out and it’s not 100 percent. It just depends how all the cards lay out.

“I don’t know that I would open and call something Tavern, but there may be some enhanced form of what the Tavern offered,” he said of his future company. “We’re working on a couple projects that I don’t want to discuss yet because they’re way down the road.”

Papay and Schultz started the Soiled Dove in 1997 and later opened their Tavern restaurants in Lowry, LoDo, Uptown, Wash Park, Platte Park, the Tech Center and Littleton, plus a few non-Tavern places, such as the Cowboy Lounge and Whiskey Tango Foxtrot.

“I’ve lived here a long time and I remember Tavern Uptown,” Judge Andrew Luxen said from his bench Jan. 11. “People are well aware of the Tavern in LoDo and Lowry and Soiled Dove and the other entities that are part of the Denver fabric. Tavern is part of this community.”

Papay and Schultz sued and countersued each other between March 2023 and their settlement this month. Both accused the other of paying for personal expenses with Tavern funds and raiding company bank accounts in a way that harmed Tavern’s ability to pay bills.

“Company funds were used to pay for a whole bunch of things that were, someone could argue, not related to restaurants and bars and music venues and the other Tavern enterprises,” Luxen said Jan. 11, referring to vehicles, medical bills, mortgages and private school tuition.

That same day, Schultz attorney Chad Williams explained that “Mr. Schultz and Ms. Papay are here in court fighting one another and it puts the company in a very difficult spot.

“We’re talking about not just Mr. Schultz and Ms. Papay, but all of the employees of this enterprise that is about to go down in flames because of its liquidity problems.”

Today, all that remains of the Tavern constellation of bars and restaurants is Otra Vez Cantina on the 16th Street Mall, Whiskey Tango Foxtrot in Union Station North neighborhood, and Chopper’s sports bar in Cherry Creek. Schultz said Tavern will keep running those.