Fight to Save Elbow Room From Demolition Just Latest Chapter in Bar's Contentious History

The sign is gone and the insides are scoured, but the fight for the former Elbow Room building endures.EXPAND
The sign is gone and the insides are scoured, but the fight for the former Elbow Room building endures.
Joe Pappalardo
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The brick building at 3010 Gaston Ave. sits empty except for debris like red Solo cups and scrap wood. A Dallas Observer newsstand, just inside the front door, stands alone, left behind when the owners of the Elbow Room bar moved out. All of the fixtures of the beloved bar have also been stripped, including the bar-top and front door.

The historic building, constructed in 1933, is slated for imminent demolition. Texas A&M took over the property in December, invoking eminent domain, to make way for its new dental school. Demolition permits have been issued by the city of Dallas, effectively giving the university the green light to knock it down despite factions within the city government that are trying to save it.

The nonprofit group Preservation Dallas and the Landmark Commission, a City of Dallas entity, have initiated steps to try to halt its destruction, but getting something designated a historic site can take years. A&M has also said that the city has no jurisdiction over it since it is a state-run public institution. It's planning to level the building within the month to stay on track with its timeline for erecting the nine-story dental school.

“It’s not looking great for the building,” says David Preziosi, president of Preservation Dallas. “It’s the last remaining building of that kind on that side of Gaston Avenue. It’s recalling the past — what that area used to be, made up of those little brick buildings from the 1920s, '30s and '40s. Once it’s gone, it’s gone forever.”

It is a sad ending for a bar with a lengthy history in Dallas — it opened in 1998. But the bar’s history had been nothing but contentious since the current owners, Joseph and Rosalie Nagy, took over in 2012. Years of lawsuits between the bar owners, bar manager and building owner date to 2014.

Ed Sigmond was the first owner of the Elbow Room and was also the majority owner of the buildings at 3010, 3012 and 3014 Gaston Ave. that housed the bar until the A&M takeover. While he kept the property, he lost the bar business to bankruptcy in 2011.

Sigmond says he “felt horrible” about his long-time employees losing their jobs and especially his close friend and bar manager, Tom Blackmer. He encouraged Blackmer to buy it out of bankruptcy, but the bar manager needed investors. Blackmer approached the Nagys, who were regulars at the bar.

The Nagys bought it out of bankruptcy for $35,000 with Blackmer as a 50 percent co-owner, according to court documents. They didn’t have prior knowledge of how to run a bar or restaurant, according to the documents, and relied heavily on Blackmer to run the place.

“Until Tom introduced me, I’d never met them,” Sigmond says. “As a landlord, I would have never leased the property, which is a property that could be leased overnight because of its location, to someone who’d never been in the business before. I leased the property to Tom, my manager.”

In recent media stories, the Nagys have been painted as the victims in this eminent domain takeover. They claim they’re being kicked out and won’t find another place with the same dirt-cheap rent that Sigmond gave them. Even though the lease they signed had a provision that it would terminate in an eminent domain takeover, they’ve sued Sigmond for a piece of his A&M buyout.

“If that provision had not been included in the lease, the Nagys' company would be entitled to compensation for the fair market value of their lease,” says Chad Ruback, a lawyer who is not involved in any of the suits tied to this story. “In hindsight, I bet the Nagys regret having agreed to a lease which included a provision that the lease would terminate in this circumstance.”

He sees other things amiss in the struggle. “The Nagys are claiming that what A&M took did not constitute ‘a substantial portion of the premises,’ based on the fact that the parking lot across the street — which A&M did not take — comprised two-thirds of the total square footage of land covered under the lease," Ruback says. "That is an absurd claim.”

The Nagys haven’t responded to the Dallas Observer's requests for interviews.

According to lawsuits brought by Blackmer in 2016 and Sigmond in 2014, the only reason the Nagys got such a cut-rate deal was because of their co-ownership with Blackmer. Sigmond gave the trio a price of $19 per square foot with no increases over a 10-year period to ensure that Blackmer took over the place and kept it running as the Elbow Room.

“It’s completely unheard of,” Sigmond says, citing rent prices that are closer to $28 per square foot in Deep Ellum.

According to the lawsuit, the Nagys reneged on their co-ownership deal with Blackmer two months into the arrangement and “fired” him. Since a lease had been signed, Sigmond couldn’t do anything to get them out.

Even before they ousted Blackmer, the relationship between tenant and landlord was contentious. A previous lawsuit brought by Sigmond against the Nagys accused them of doctoring the lease agreement so that they didn’t have to pay rent for six months while they got the business up and running.

Sigmond’s suit alleges that the Nagys served him with the lease changes while he was under duress: recovering from heart surgeries and under heavy sedation. He says he wasn’t even able to drive at the time, and Blackmer chauffeured him to the Nagys’ lawyers' office to sign the papers. Because of those changes, Sigmond didn’t receive rent money for half a year; he says he ended up with $40,000 in arrears on his mortgage and almost lost the property.

Those suits settled, but while Sigmond and the Nagys are still fighting over money from the eminent domain buyout, it seems that everyone is fighting A&M in some capacity. While the city of Dallas’ preservation arm can’t do anything to cancel the demolition permits that have been issued, it's hoping A&M succumbs to local pressure and finds a way to save at least part of the building.

“We hope they realize what they don’t need is an incredible amount of ill will in the community,” says Daron Tapscott, the chair of the landmark designation committee. “No one likes being the bad guy, and public ill will is about the only leverage anyone has at this point.”

Tapscott says the commission is trying to work with A&M to find a middle ground if it's not willing to save the entire building. He points to Saint Ann restaurant in the Harwood District as a good example of a developer preserving parts of the previous historic building. 

Tapscott, an architect, says A&M is only in the programming stages right now — allocating the amount of square footage for each of the building's uses — so it's nowhere near the design phase. He estimates it will take at least two years to complete the building.

The landmark designation process can take one to two years as well. And while the committee is deciding whether 3010 Gaston Ave. will be on the agenda for the next meeting, Tapscott says the ball is in A&M’s court.

“They could go on with their plans [to demolish it]. I don’t think it would be a wise course of action, and I don’t think they perceive it to be a wise course of action,” Tapscott says. “They’re being very cooperative at this time. ... We’re hoping they do something responsible. There’s many ways it can be done.”

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