Why Regatta is one of Sydney’s biggest ever failures
When former coal mining magnate Leigh McPherson and his twin brother Brendan purchased the Regatta restaurant situated in Rose Bay in 2014, they believed their diversification into hospitality would build on the family wealth.
Popular location, rock-star chefs including Damien Pignolet and some of the best sommeliers in the country, should have been a recipe for success.
Six years later, McPherson is embroiled in a legal battle with another of Sydney’s elite families, the O’Neil family, over unpaid rent, one of the gigantic overheads that doomed it from the start.
The Regatta, which is located in one of Sydney’s most prestigious waterfront locations, attracted many high end patrons such as Princess Mary, however its celebrity pull wasn’t enough to stop the restaurant bleeding close to $8 million in its time in operation.
Even at full capacity, the Regatta’s revenue wasn’t enough to cover costs, particularly the $18,000 per week rent.
In October, documents lodged with corporate regulator ASIC show that the restaurant was placed into the hands of receivers with over $11 million in debt.
The McPherson brothers issued a statement through a spokeswoman saying, “We did everything we could but ultimately the rent was too great.
“And, despite trying everything, we realised we could not make it work.”
Administration documents show the cost to rent the site came to just under $1 million a year, leading to a legal battle between Mr McPherson and his landlord property magnate Denis O’Neil.
Mr O’Neil claims to be owed $2.4 million in “outstanding rent and other costs, including fit-out contributions (on the restaurant),” according to the administration documents.
Documents also show he has a personal claim against Mr McPherson for $376,000.
The amount owed in rent is being contested by Mr McPherson, claiming the rent had not been paid due to the fact that the amount should have been reduced during the COVID-19 crisis.
Notably, McPherson himself, is one of the largest creditors, although to his credit, he elected to have other creditors — including restaurant staff — paid in full.
Of the $11 million, Mr McPherson’s Third Street Investments poured $7.8million into Regatta since 2014.
The money went to the purchase and then to keep it alive.
A further $1 million was injected by McPherson and family members via three other businesses, as loans. However, the money is now lost, making Regatta’s failure one of the biggest restaurant failures in Sydney’s history.
Irit Jackson, 25th January 2021
