State tax officials seize landmark South Jersey diner

Olga's Diner was dark yesterday. The famous bakery shelves, which once held some of the best cheesecake south of New York, were bare. The tables, though, were set with overturned coffee cups and silverware, ready for customers who may never again come through the front door.

State tax officials said they seized the South Jersey landmark, at Routes 70 and 73 in Marlton, on Thursday because its owners had failed to pay $37,000 in back taxes. Separately, the Burlington County Health Department posted a "blanket embargo" sign on the entrance, telling would-be coffee drinkers to find somewhere else to satisfy their Java jones.

A handful of people stopped in the parking lot yesterday afternoon but quickly drove away after seeing the blazing orange "Warning Notice of Seizure" on the front window.

A few got out of their cars to see for themselves that the 50-year-old faded fixture, a meeting place for New Jersey and Pennsylvania travelers, was really shut down.

John J. Weldon, who lives in Leisuretown, Southampton Township, was to meet a business associate from West Chester. He had been coming to Olga's for 50 years and used to live nearby on Greentree Road. A traveling salesman, he said he had eaten at the best restaurants in the country and found Olga's to be "above average" for a diner.

"It was a very good diner. It's a shock. It's a loss for the area," he said.

Erin Nephew left New Jersey a decade ago for work in Washington. Yesterday, she was passing through on her way to a wedding in Little Egg Harbor and thought it would be a good idea to stop by the famous diner for a snack.

"No luck," she said, and hopped back into her green Mustang.

Anne and Don Gosnay had driven over from Springfield Township, Delaware County, on a shopping trip, got hungry, and thought they would visit Olga's for the first time in years.

The family used to stop at the diner on their way to the Shore. They couldn't remember exactly the last time they were at Olga's.

"It was when the kids were teenagers," recalled Don Gosnay.

Anne Gosnay chuckled. "The eldest is 50 now."

"It was a nice stop on the way to the Shore," Don said.

Memories don't always hold up. Former patrons say the food at Olga's had lost its gusto, and diner lovers went across Route 70 to the Marlton Diner, which was bustling yesterday.

Lunch crowds shrunk, routinely leaving most of Olga's 400 seats empty, and changing traffic patterns made it harder for potential customers to get there.

Weeds, some three feet high, pushed through the cracked and buckled blacktop around Olga's yesterday, making the landmark look like an unkempt grave.

Three years ago, owner John Stavros, son of the late Olga, put the three-acre property up for sale for $10 million.

A long fight over a planned $57 million overpass at the diner's Marlton Circle location depressed hope for a potential sale, said real estate agent Jack Philbin. The state wants to remove the accident-plagued rotary.

"No one knows what's going to happen with the circle," Philbin said. "People in the area are fighting it tooth and nail. And that's why buyers aren't interested."

Among them was Stavros, who could not be reached for comment yesterday.

The diner nearly ran out of gas earlier this month when Public Service Electric & Gas cut it off for "billing problems," a spokesperson said at the time. It quickly reopened.

This week's tax problem was not the diner's first.

Cheryl Fulmer, an assistant director for the state Division of Taxation, said yesterday that the owners had previously failed to pay back sales and payroll taxes, but had been able to "pull a rabbit out of the hat at the last moment."

This time, she said, "they blew us off."

She said the state had been working with the Stavros family for months.

"A supervisor stopped by [recently] to say, 'Look, this is a serious matter with serious consequences,' " Fulmer said.

They were.

With the state seizing and closing the diner, the Burlington County Health Department put it under a blanket embargo.

"It's a safety precaution," said Loretta O'Donnell, spokeswoman for the county freeholders. "They're not to remove the food until it's been inspected, because now that it's been closed, [the food] could have gone bad."

The restaurant has been at the Marlton Circle since 1960, when the Stavros family - led by matriarch Olga - expanded from its original location in Camden.

The current owner, her son, spent most of his life working at the Camden or Marlton Olga's, but in a 2005 interview with The Inquirer said that he wanted to retire and that his children were not able to take over the business.

In the 1960s, Marlton was mostly woods and farmland. The diner was one of the few places a traveler could stop for a hot meal. But suburban development overtook the area, and with it came scores of new restaurants. State transportation officials say 90,000 cars a day swing through the traffic circle by Olga's - enough to justify the $57 million overpass.

The neon "Open" sign still shone at Olga's yesterday, but it was flanked by graffiti written in cleaning polish asking "$50 mil??. . . 91,000 cars day?"