Food News

Circo TX Closed This Weekend. Here’s the Inside Story of Dallas’ Biggest Restaurant Disaster.

Circo TX uses stamps to brand ice cubes in their cocktails.
Circo TX uses stamps to brand ice cubes in their cocktails. Alison McLean
Our review of Circo TX, published in January, suggested that the restaurant “could stay open for months.” Now we know how many.

Circo served its last meal Sunday, just nine turbulent months after opening. It’s a pity, really. That glass-bottomed rooftop swimming pool had finally opened.

The restaurant’s closure took place in a manner as chaotic as the rest of its existence, just days after a round of layoffs and an interview in which Circo TX CEO Lauren Santagati told the Observer that “we are actually expanding.”

“Circo in Dallas is facing noise complaints,” Santagati wrote in a statement three days after a source tipped us off to her plans to shutter the business. “It is up to the landlord to find a way to maintain the actions of the residents and provide a solution for noise prevention. If that is not solved, we may look to take Circo elsewhere.”

click to enlarge At one point, Circo once had the bright idea of letting women eat free. It's unclear whether this ever really happened. - SCREENSHOT VIA CIRCO'S FACEBOOK PAGE
At one point, Circo once had the bright idea of letting women eat free. It's unclear whether this ever really happened.
Screenshot via Circo's Facebook page
Several former employees are concerned that they may be blacklisted by other potential employers in Dallas just for being involved in the high-profile restaurant. Conversations with 10 former Circo employees and contractors paint a picture of a $7 million investment plagued by unending chaos, including dozens of bounced paychecks for the entire staff, a kitchen stranded without suppliers or ingredients, mechanics’ liens for over $300,000, a culture of secrecy, wild parties and, presiding over it all, Santagati, whom one former employee describes as “Bernie Madoff meets Snooki.”

“They can’t even pay me my last check,” another former employee says.

Turnover was a problem, too. Circo TX went through at least four executive chefs in its nine months — Alfio Longo, a veteran of the original Le Cirque who quit on the first night of service; Eddie Barron, who was fired during a leave of absence for the death of his mother; Justin Mosley; and Yia Medina, a Hurricane Maria survivor who, according to two sources, was fired and then rehired. Junior Borges also served as a consulting chef for about three weeks; Borges says it was an attempt to help Mosley, a former colleague.

In online communication, Longo distanced himself from the restaurant, saying that his role was “training and teaching, which clearly they didn’t follow up.”

click to enlarge An autographed letter from Melania and Donald Trump at Circo TX. - ALISON MCLEAN
An autographed letter from Melania and Donald Trump at Circo TX.
Alison McLean
Barron says the restaurant’s financial and legal problems began even before Circo opened, during a stint when he cooked at Santagati’s other restaurant, the now closed bistro PL8.

“When I was working at PL8 I got paid under the table, because they didn’t know how to put me on their payroll or tax or something,” Barron says. “So I got paid cash the whole time.”

In a blanket written response to several questions about alleged financial problems, Santagati says, “We opened Circo to give Dallas something to enjoy. We spent millions of dollars on the build out — we have a 4.5 Star Reviews, we have a hard-working staff that feed their families on their income provided by our concepts, it truly is a shame there are ‘writers’ like yourself that purposely try to damage others hard work and credibility. Like every business, especially restaurants - it is high stress, high turn-over, challenging and high risk. You should focus on some of the good our business provides instead of being so malicious to write a story and get a few SEO points … you may get more readers, but you don’t get more respect - and that’s a fact.”

Financial issues may have helped delay Circo’s opening by over a year.

“We were supposed to open by spring, and then it was winter, and then it was the start of the year, because we couldn’t set up with vendors,” Barron says. “... No one would set up an account with us.”

click to enlarge Circo's famous ravioli, which is mostly ricotta and black pepper and a delightfully large amount of butter. - BRIAN REINHART
Circo's famous ravioli, which is mostly ricotta and black pepper and a delightfully large amount of butter.
Brian Reinhart
Barron had applied for a sous chef position, hoping to master Italian cooking under Longo’s mentorship. “I was blown away that I was given this opportunity because I have all the books about Le Cirque and Circo in New York,” Barron says. “I really look up to Sirio (Maccioni) and Daniel Boulud and all the things that brand has accomplished in the past 40 years.” But when Longo quit after the first night, management offered Barron a sudden promotion to executive chef.

Barron, then 25, admits to being unprepared for the job. “I was so blinded by publicity and trying to get big that I didn’t sit back and think that this could actually ruin my career too,” he says. “We were not set up for success from the start.”

Trouble set in immediately. Four sources, speaking separately, all claim that investors provided Santagati with cash to compensate staff for the preview meals commonly known as “friends and family” nights. The sources differ on the amount of cash — one recalls “a $1,000 bonus check to everyone,” while another remembers $5,000 total and a third says it was simply “a lot” — but they all agree that the money was not distributed.

“It was given to the staff that worked that night,” Santagati says. “It was in their tips.”

“Shenanigans with tips are not uncommon in the restaurant world, for that to be a really big gray area,” says one former Circo employee. “But I had the distinct impression with them that they were somewhere between not understanding the urgency and not caring.”

Santagati is proud of one initiative that took place in Circo’s early days: a fundraiser for an employee, Atanas Palanov, who was stricken with a severe illness. “During that difficult time, the staff raised awareness and began a fundraiser for him,” she says.

Palanov, who has since recovered, sees it differently. “Lauren mentioned a fundraiser, but I haven’t heard about it being in place or if they have raised any money,” he says. “Maybe there was a fundraiser and she did organize it, but I was not given any money. Maybe it is still on.”

Early in Barron’s tenure as executive chef, meat, seafood and produce vendors dropped Circo’s account. At one point, Barron says, he was forced to go two full weeks without ordering any new ingredients.

click to enlarge Circo TX's very short menu in mid-December 2018 - BRIAN REINHART
Circo TX's very short menu in mid-December 2018
Brian Reinhart
“I couldn’t order anything for the restaurant,” he says. “Anything. You want me to go a Friday and a Saturday night with 70% of the menu 86’ed and I have 137 covers? They were like, ‘We’re Circo, that’s the name, we’re a circus!’ I remember one service we had four or five different fish dishes on the menu, all of them were 86’d, and we had four or five cuts of steak (on the menu), and we had one. They were like, well, this is an Italian restaurant, this will steer everyone towards pasta.”

When this author visited in December to write the Observer’s review, after Barron had been fired, Circo’s menu offered seven pasta “first courses,” but only five mains: one chicken dish and two cuts each of beef and fish. A review in D Magazine noted that the restaurant had run out of caramel syrup for macchiatos.

“The event and party manager would come up to me 5 minutes before dinner service and tell me that we have a party of 50 tonight,” Barron adds. “Tonight! They would do that every day. The level of professionalism in this organization was the least I’ve ever experienced in a kitchen, period.”

In response to additional questions, Santagati sent the Observer a new written statement: “You are a ‘FOOD’ critic. The irrigating (sic) questions you asked me had NOTHING to do with food. You are not professional. ... Stop calling me, please refrain from this initial damage, it will not be taken lightly.”

Barron says that he was at the restaurant long enough for about 20 of his paychecks to bounce. Each time, management paid him in cash, including extra money to cover the bank’s bounced-check fee. For three weeks, Barron says, the whole staff was paid in cash while management claimed to be changing payment companies.

Circo's signature tiramisu orb - ALISON MCLEAN
Circo's signature tiramisu orb
Alison McLean
Two more former employees agree that cash payments and bounced checks were common. One, who had “at least four” paychecks bounce, reports that “my last check was just an electronic payment. No stub.” The employee says that Circo’s accountant once offered to issue pay via the Zelle app.

Another former employee adds, “I was paid cash a handful of times. My paychecks did not bounce, but I had firsthand accounts of employees who did. Two in particular came to me for help in getting their money.” The employee agrees with Barron that there was a period where the business “suddenly changed payment company.”

A fourth former employee reports having no troubles with pay, but adds, “I know they were really struggling to get paychecks to people. I know that I had to fight, repeatedly calling and emailing, to get expenses back.”

The chaos at Circo is over now, but for many of its victims — including employees, contractors and investors — the financial and reputational damage continues.

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In late 2018, without warning, Circo fired Barron.

“My mom had been fighting cancer, and I had really sacrificed a lot of time to the restaurant instead of going and holding her hand and being there for her,” Barron says. “One night I got a phone call during service that was my dad telling me that my mom had passed. It destroyed me.” He took an eight-day leave of absence to mourn with his family.

“The day I came back they had already hired a new chef. I came in the kitchen and I said, ‘Why is Junior Borges in my kitchen?’ The two managers asked me to sit down for a second. ‘So do you know what the food cost is for last week?’ ‘Guys, I haven’t been here for eight days, I just lost my mom.’ ‘What’s the labor report for the last week?’ ‘I don’t know. I haven’t been here.’ ‘Do you know how much we’ve spent on orders?’ I started crying. I was like, ‘Guys, why are you asking me these questions?’ ‘Because you don’t know these things we’re going to have to let you go. That’s your job, and you don’t know it.’ I lost my shit over that.”

Other former employees have similar stories involving dramatic departures. Longo confirms that he left after the first day of service but declined to comment further on the record; other witnesses, including Barron, report that he departed after being summoned to a meeting with Santagati and investors in the dining room during dinner, while customers sat at nearby tables.

click to enlarge Celebrity faces can be found all over the interior of Circo TX. - ALISON MCLEAN
Celebrity faces can be found all over the interior of Circo TX.
Alison McLean
Another former employee, speaking under condition we not use their name because “they had us sign an agreement,” says, “After I was gone I think everyone there was told that they weren’t allowed to talk to me. One by one they started calling me and getting back in touch after finding out they’d been let go.”

Santagati confirms part of the former employee’s story: “All employees sign an arbitration form stating they agree not to negatively speak to press about the company,” she says. She additionally suggested that if the Observer named its sources, she would “be happy to have human resources give you a signed Arbitration Form” for each source. Two unnamed former employees declined to speak to the Observer because of the forms; one employee reports being made to sign after Santagati learned of this story.

After the Observer review ran in January, Longo reached out to this author to describe the critique as “a reality of what it is,” but not everyone involved took the story so well. Mauro Maccioni, a member of the New York family that opened the original Circo and Le Cirque, sent this author more than 50 private messages on Facebook, Twitter and Instagram over several weeks. The messages included private, candid photographs of his ailing father, Sirio Maccioni.

Circo’s closure came as bills piled up for the restaurant, including a mechanic’s lien sought by Gentzler Electrical Services, which alleges that between August and October the firm provided over $61,000 of electrical work in the restaurant but was never paid. Another lien, placed by TSI Commercial Floor Covering, seeks almost $12,000 for unpaid flooring work.

“We do not have $70k in unpaid bills,” Santagati said. In a follow-up conversation, she added, “This is all in arbitration right now. Their attorneys have reached out to me, my attorneys have reached out to them since you sent the questions.”

click to enlarge A lien on Circo TX by Southlake General Contractors - PUBLIC RECORDS / SCREENSHOT BRIAN REINHART
A lien on Circo TX by Southlake General Contractors
public records / screenshot Brian Reinhart
A third lien, filed by Southlake General Contractors, seeks $239,599.97 for “construction of leasehold improvements” for “Circo Dallas (restaurant).” Santagati claims that these liens are against the owners of the One Uptown building.

Not all of the restaurant’s debts are to large contractors. A freelance graphic designer who created images for Circo's social media marketing claims to have never been paid for them, and shared screenshots of text messages with Santagati.

“Did you receive my invoice?” the designer wrote. Two days later: “Hi Lauren, I was wondering when I should expect to receive my check?” The screenshot shows that the latter message never received a reply.

“I kept calling Circo and was constantly told she was unavailable,” the designer says. After a while, the designer gave up. “I just got tired of being ignored.”

In early June, the restaurant’s website briefly went offline, displaying an “account suspended” error. After the Observer asked if this was a sign of imminent closure, the website was restored.

When the restaurant finally shuttered, one former employee, who spoke under condition we not use their name due to a nondisclosure agreement, reached out to express concern about not receiving pay stubs to save for tax purposes.

“They are screwing me over, and I might get audited next year,” the former employee said.

Meanwhile, Barron is still picking up the pieces from his time at Circo. He interviewed for jobs at other Italian restaurants in Dallas, only to be told that his résumé was disqualifying.

“They would say, ‘Oh, you’re the chef at Circo? Get out. Even if I was hiring, I wouldn’t hire you.’ It was only because I worked there,” Barron says. “I feel like my whole career in Dallas was crushed because of that.” He’s working with chef Peter Barlow on the Niteshade Chef Collaborative, a part-time gig that helps pay some bills but still leaves the family financially strained.

“I learned a lot,” Barron says of Circo. “It taught me red flags and how to manage in a chaotic situation.”

The chaos at Circo is over now, but for many of its victims — including employees, contractors and investors — the financial and reputational damage continues.

In the days before Circo finally closed its doors, Santagati told employees that she plans to move to Florida and open a restaurant there.
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Brian Reinhart has been the Dallas Observer's food critic since spring 2016. In addition, he writes baseball analysis for the Hardball Times and covers classical music for the Observer and MusicWeb International.
Contact: Brian Reinhart