Landlord plans to convert ex-Studio 4 building in downtown Ann Arbor to office space

And Serras - a partner in the multistate Mainstreet Ventures restaurant group, based in Ann Arbor - is now exploring converting the 8,184-square-foot building at 314 S. Fourth Ave. into a new use, such as offices.

“I’d love to get the bar out of there and get a (different) use in there,” Serras said.

That decision was prompted in part by the announcements of two recent downtown office deals for nontraditional space: Second to None, which is moving into the former Sweet Lorraine’s restaurant in Kerrytown, and the University of Michigan architecture school, which just leased a commercial building in Liberty Lofts.

It also follows a summer of litigation among the various entities connected to the property, which is owned by the Dean Zahn Properties LLC of Saline. Serras has a long-term lease on the building and once operated Maude’s Restaurant there.

An entity called Papa Chulo's Inc. sublet the building, eventually turning it over to VR Entertainment, which operated Studio 4. Papa Chulo's, managed by Demos Panos, retained ownership of the liquor license.

Serras got a $52,754 judgment against Papa Chulo's, which in turn sued VR Entertainment and received a judgment for $324,890. And now VR Entertainment is suing Papa Chulo’s for wrongful eviction, while lender Monroe Bank & Trust seeks to take control of the liquor license because Papa Chulo's owes the bank $151,000 on a loan in default.

The litigation is complicated. But the bottom line, Serras said, is that VR Entertainment no longer has access to the liquor license, and thus can’t operate as a bar.

“I’m not getting any rent,” Serras said as a result.

VR Entertainment had signed a new lease with Serras after the Papa Chulo's eviction, he said. That deal was based on a business plan that the operators sent to Serras, reflecting increased security in the bar. City officials also had filed suit against the club, citing public nuisance issues.

“They were really going to attempt, by the way they talked, to open something better than what it was,” Serras said.

Attempts to reach VR Entertainment or attorney James Cmejrek were not successful. The phone number at Dream Nite Club has been temporarily disconnected, according to a recording.

And the club’s Facebook page - which touted its Sept. 2 opening - hasn’t been updated since Sept. 8, after 57 photos of what appears to be the opening party were posted over three successive days.

Demos Panos did not return a call seeking comment.

Meanwhile, Serras is talking to local real estate experts about converting the space, which is larger than many floor plates available downtown.

The recent deals for tenants who wanted nontraditional office space “hopefully show some action coming back to downtown,” Serras said.