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Circuit Nightclub shuttered for now
Business split in play [Article updated, Nov. 5, 2012, 4 p.m.]
by Kate Sosin, Windy City Times

This article shared 3192 times since Fri Nov 2, 2012
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Boystown mainstay Circuit nightclub has closed temporarily, according to a statement from owner Mike Macharello—and a business split is at the heart of the development.

The late-night club, located at 3641 N. Halsted St., was closed after an apparent falling out between owners Mike Macharello and Patrick Harms, but why exactly the business is shuttered remains uncertain.

The Circuit website has been replaced with a statement stating that Macharello's assets have been seized by debt holders. ChicagoPride first broke that story, noting that Boi Magazine, which Macharello published, has also been seized.

"As a matter of public notice: As of November 1, 2012 all assets of Michael Macharello d/b/a Circuit Nightclub have been seized by first position debt holders," the statement on the Circuit website now reads.

News that the club was closed first came from Macharello who posted on Facebook that Circuit was renegotiating its lease with its landlord. Macharello alleges that the club's landlord has dramatically raised the rent for the space.

"My landlord continues to raise the rent on us by thousands of dollars and all the money you spend at Circuit, the majority goes to him!" Macharello wrote. "I do not want that for myself, for you or the future of Circuit.

"So right now I am trying to work a deal out with him so that I, along with the club has a better future, where the money that you spend at Circuit will go directly back into Circuit to make it a better club experience for you and all to enjoy!"

Dozens of Facebook commenters lamented the temporarily closure, made public on the club's Facebook page.

But Franklin L. Friedman of Sterling Properties (which manages 3641 N. Halsted St.) stated that Macharello's claims were false:

"1. Mike Macharello is NOT the tenant of the 3641 Building;

2. [Circuit's] Patrick Harms IS the tenant of the 3641 Building;

3. Under the current lease for the 3641 Building, the ownership of the 3641 building has NOT raised the rent;

4. Mike Macharello's implication that the ownership of the 3641 Building forced Circuit to close by a rent increase of thousands of dollars is absolutely and completely false; and

5. the ownership of the 3641 Building (i) enjoys a close and harmonious business relationship with Patrick Harms and (ii) looks forward to this relationship continuing for many years in the future."

Harms later emailed Windy City Times, stating, "I wanted to reach out to you regarding an e-mail sent from Franklin Friedman, the property owner of 3641 North Halsted Street. All five points that Mr. Friedman identified in his e-mail are true. I am the lease holder of the property, and I still enjoy an excellent working relationship with Mr. Friedman and his family."

According to Harms, he negotiated a significant rent reduction with Friedman in 2010, when the economy was still struggling. Since, he said, there have not been increases.

"Finally, on Nov. 1, Mike Macharello removed the business licenses from the premises because of serious disagreements between him and myself over administrative and operational concerns," Harms wrote. "Despite my best efforts to reach to an amicable solution, Mike and I have been unable to find common ground."

Macharello, reached by phone Nov. 5, said it is true that he removed business licenses. He also agreed with Harms' version of events, including Harms' statement that Friedman had not raised the rent recently. Rather, he said, he had hoped to negotiate a rent reduction for the property, half of which he said is currently being used for storage.

Marcharello said he took responsibility for Circuit's latest woes, but also alleged financial mismanagement on the part of Harms. Still, he said, Harms remains a close friend. He said the poor economy has meant struggles for Circuit, forcing him to raise drink prices and cover charges.

Asked why his websites had been seized, Macharello said he believed Circuit's website had been seized by one of its investors, but that Boi Magazine should not have been taken over. He said that Boi will continue to publish and that he would be launching a new Circuit website soon. The future of the club at its current location, however, remains uncertain.

Windy City Times is looking into several of Macharello's claims. A follow-up inquiry to Harms was not immediately returned.

Circuit regularly hosts LGBTQ community events and popular theme nights. Macharello has found at least one other venue for Circuit events, as it held "Noche Vaquera" at 1675 N. Elston Ave. on Nov. 4.

A follow-up inquiry to Harms was not immediately returned. Macharello, reached by phone Nov. 5, said he was unable to immediately comment.

Windy City Times will update this story as details become available.

—Contributing: Andrew Davis

This article shared 3192 times since Fri Nov 2, 2012
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