The Downfall of Watch City Brewing

Watch City Brewing closed for good in July.
Watch City Brewing closed for good in July. –Bill Damon, Creative Commons/flickr

This is how a local brew pub dies.

In late July, Watch City Brewing, a brew pub that had been a mainstay on Moody Street in Waltham, put its equipment to auction and shuttered up.

This came as no surprise for workers who had been around the company for a while. It had been clear to them that time had run out on Watch City weeks before, when owner Jocelyn Hughes said she was closing temporarily to try and deal with a faulty heating and air conditioning system. The day that decision was made, bartender Mark Magno says he called regular customers to tell them to come on by—that night would likely be the brewery’s last. “Knowing what I knew, I knew that was the end,’’ Magno says. “I had lived the history.’’

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That history, which led to Watch City’s ultimate demise, includes a financial situation that spiraled out of control, growing tensions between ownership and workers, and complicated dealings with a regional beer industry power.

Several former Watch City employees spoke with Boston.com about the company’s downfall. Most asked that their names not be used because they remain in the restaurant/brewing industries and do not wish to harm their job prospects by speaking about a former employer. Boston.com has also seen bank documents, checked public records databases, and spoken with Watch City owner Jocelyn Hughes to verify details.

The brew pub originally opened in Waltham in 1996, just when the craft brewing explosion was getting started. The 180-seat restaurant comprised the lion’s share of business, but Watch City beers were also sold in area restaurants. Around the time it closed, Watch City was available in more than a dozen restaurants including spots in Boston, Cambridge, and Somerville.

In the early days, sales grew year over year as the brewery took advantage of a prime location in downtown Waltham. Within a few years, Watch City was doing more than $1.5 million in annual sales. Early reviews of the restaurant and the beer leaned positive. Here’s The Boston Globe’s 1996 review.

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Until the end, Watch City had its stalwarts. Waltham resident Justin Sheehy says he became a regular in 2004, and would head in weekly.

“It was the whole picture. Good beer, good food, good location, nice space inside,’’ Sheehy tells Boston.com. “Over the years it became a favorite of my entire family as well. The place managed to be both a good neighborhood bar and a good family-friendly restaurant at once. The community, both staff and customers, was a big part of why we were there so often.’’

About a decade after opening its doors, Watch City’s financial problems began stacking up.

In the mid-2000s, Hughes and her ex-husband Frank McLaughlin, who was also the general manager for many years and was listed on state documents as an officer for Watch City until after their divorce, began talking about possibly selling the company. They first wanted to secure capital to settle debts and take care of a few things around the restaurant that would put them in better position to make a deal.

In 2007, Hughes was given a loan worth at least $250,000 from local restaurateur Joe Slesar, who owns Boston Beer Works and its affiliated microbreweries—somebody Hughes says she also saw as a buyer.

The agreement came with an escape hatch, as it included an option that would let Slesar buy Hughes out. Hughes and McLaughlin entered into discussions with Slesar about a sale shortly after the loan was issued.

Talks went on for several months but ultimately fell through as the two sides were unable to agree on the price of a sale. Hughes tried to reopen discussions in subsequent years, but they never got very far. Hughes says she had expected to get a deal done since before she secured the financing. But in a brief interview with Boston.com, Slesar says a buy-out “was always just something that could happen.’’

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Slesar, though, wasn’t the only potential buyer. Employees who spent nearly two decades with Watch City say they felt a sense of ownership over and loyalty to the business—which accounts for why they stuck it out until the end, despite all the signs that things were going downhill. In 2007, some workers who had been with Watch City since its first year, including the bartender Magno, tried to literally take ownership over it, approaching Hughes about a sale.

Those discussions didn’t go very far. Hughes tells Boston.com: “I never saw any commitments to money. It was a lot of talk.’’

The employees, who say they unsuccessfuly made a second stab at a buy-out in 2010, claim Hughes never provided any financial statements they needed to see in order to put together an official offer. “It never got serious because we were never allowed to get serious,’’ Magno says.

Hughes fell behind on the debt to Slesar, as well as money owed to suppliers and the state’s Department of Revenue.

She took out another loan from Watertown Savings Bank in 2010. Hughes was going through the divorce with her ex-husband at the time, she says, and her credit was not in good shape. In order to secure the $80,000 loan, she asked Magno to put his name on the loan and offer his home as collateral, along with two homes she owned. Registry of Deeds documents show that the two properties used by Hughes to secure the loan have since been sold.

Magno agreed to put up his home, he says, for the same reason he and others stuck around until Watch City closed: He took pride in the company and his long-time role in it, and was committed to its survival. “I wanted to see the business’s debts paid off,’’ Magno says. “I wanted it to grow. I wanted to help the business.’’

With three years still to go on the loan’s term, Magno has retained legal counsel in the event he needs it. Hughes insists that he won’t need it. She says Magno put his home up voluntarily, that the loan is current, and that she intends to adjust the collateral soon to free Magno’s property.

Magno was not the only Watch City employee to make sacrifices for the company. Other workers tell Boston.com they were willing to take temporary lay-offs from the company and that bouncing paychecks became a regularity toward the end.

“We just continually watched it go downhill,’’ says one long-time employee, who claims Hughes was either unable or unwilling to reinvest in the business—like aging infrastructure such as furniture and floors, or poor conditions in the building’s basement. Hughes contends the property’s landlord, retired Boston attorney Edward Masterman, refused to invest in fixing up the property. She also says changes in healthcare regulations and other costs of doing business took a toll on the finances and further prevented her from putting more money into the business.

As it became increasingly clear that the business wouldn’t survive, tensions grew at Watch City. Employees say Hughes became stand-offish after they tried to buy the company. Hughes says longer-term employees were not receptive to a new management team she brought on to try and right the ship after McLaughlin (her ex-husband and Watch City’s general manager) left. In conversations with Boston.com, former employees referred to the new managers dismissively as “the consultants.’’

Hughes says relations between herself and workers grew ugly toward the end, making for a less than ideal workplace. “When things start to go bad in any business, hostility is going to rise,’’ she says. “It got to the point where it was a very uncomfortable place to work.’’

Meanwhile, some of Watch City’s troubles were picked up on by customers. Sheehy, the regular customer, says that staff turnover and the heating and air conditioning issues were noticeable in the final months.

Though this is hardly an optimal way to gauge a customer experience, Yelp reviews in recent months include several commenters who say the circumstances had an effect on the overall establishment.

“This place has gone downhill in the past few years,’’ one reviewer writes. “It used to be great. I won’t be going back.’’ Another review: “Been going here for a few years and in the past 3 months the place has declined precipitously.’’ And another: “I feel like this place used to have good food years ago, but something happened.’’

In June, Hughes closed up and put a note on the door saying Watch City would be back soon after it took care of some repairs. It never opened again, as Hughes opted to put the restaurant’s equipment out to auction.

During the period between the ‘temporary closing’ and the news that Watch City was done for, most employees were not contacted with the news the restaurant would not be reopening.

Hughes says reopening was always her goal, and that she hoped she would reach some sort of “11th hour reprieve’’ before she finally chose to call it quits in late July. “It had just gone beyond saving,’’ she says.

Hughes also says she told “key employees’’—like managers—about the permanent closure, but that she thought some other employees would have reacted with hostility to the news. One long-time employee who was not called saw it differently. He says he was offended to have not been told the company had reached the end of the line. He called the lack of a call “the perfect, fitting ending’’ to Watch City’s downward spiral.

The proceeds of the equipment auction were split between Hughes and Beer Works’s Joe Slesar, according to Hughes. A few weeks later, news came out that Slesar would be opening a Waltham Beer Works in the same location.

Slesar did not acquire Watch City. But he did agree to forgive Hughes’s debt if she allowed him to buy her license to sell alcohol, to which she agreed. Watch City’s lease at the space was torn up, and Slesar was given a fresh one.

The building is undergoing major renovations this fall in preparation for a planned spring opening of Beer Works. As the interior undergoes construction and cleaning, Watch City’s signage still hangs outside.

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