LUMBERTON — The state has shut down a popular downtown restaurant because it owes almost $40,000 in back taxes, but the owner says it will be back operating by this weekend.

Black Water Grille, which is at 111 W. Third St., was closed at 4 p.m. on Tuesday by the North Carolina Department of Revenue. About 25 people work at the restaurant, according to owner Rob Redfearn.

“I don’t want this to scare off customers,” Redfearn said. “Everything is under control.”

He said he expects the establishment to be back in business on Friday, but he did not want to give a specific time.

Signs on the doors and the message on the restaurant’s answering machine say that the business is closed for repairs. However, Redfearn acknowledged that the doors were locked Tuesday by state authorities because of the outstanding tax liability of the business.

According to records on file at the Robeson County Courthouse, the business at one time owed more than $109,000 in taxes to the state.

Redfearn paid that down during the summer, but still owes $38,118.59, according to Beth Collins, a levy officer with the Department of Revenue. Redfearn said he expects to pay off the balance after a loan is approved. He said the loan would also be used to expand his business to Fayetteville.

Redfearn said that the recession has hurt the business, with sales down 20 percent the last two years.

“We tend to make our money in the winter. Unfortunately we hit a snag and the timing is terrible,” Redfearn said. “The irony is we have a very busy Christmas season planned and we would have made enough to pay that amount (the remaining balance).”

Redfearn also said the business was hurt by a former employee who he said embezzled “a lot of money” during 2008. Redfearn said there is a warrant for that person’s arrest.

Lumberton police Lt. Johnny Barnes confirmed that the former employee is being investigated for allegedly stealing $4,850 worth of checks from the restaurant, but he said no warrant has been issued.

Black Water Grill opened in 2004 in a building that had once housed the Bargain Barn, but had been empty for years. It has a lunch and dinner menu that includes crabcakes, steak, fried chicken, fried green tomatoes, salads, sandwiches and more.

It is a popular hangout on the weekends for younger people, often hosting live bands. It also has a banquet hall that is used for private functions, including regular stops by several civic clubs. On Wednesday, a sign on the store said that two events that had been scheduled at the restaurant had been moved to Adelio’s restaurant.