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Sunday, August 1, 2010

Possible Restaurants Coming to Old Warners Building


I have personally met with a couple of investors interested in the old Warners and Pergola restaurant building on Fort Thomas Avenue.  Interest appears to be high but price as always could be a sticking point.  Those that I have spoken with are very interested in the location and based on the sales at the previous restaurants feel they can make a good return on the location.

Despite the perception that Fort Thomas residents do not support Fort Thomas businesses statistics that these investors are using not only refute that perception but completely turn it on its head.  For example:
  1. There are 200 Subways in the Cincinnati MSA and our Fort Thomas Subway which is across the street from the old Warner's building is ranked 9th out of 200.  This despite little to no catering business which generally accounts for a large percentage of a Subway's sales.
  2. Starbucks in Newport (I know - technically not Fort Thomas but we have claimed it as our own) is another example of retail success driven by our under-served Fort Thomas retail market.  Out of 55+ Starbucks in the Cincinnati area it too is a top performer.
  3. Kroger's store at the Newport Pavilion has been very successful.  Despite having another store less than a mile away in Bellevue and an inoperable fuel center the store has been one of the better performing stores in the area.
  4. Target's construction despite the fact that there is a broken sewer line and the developer is in bankruptcy.  This speaks volumes to Target's belief in the area and the attractiveness of the demographics of the surrounding area.
Back to the old Warner's building.  There is at least three different restaurant concepts that are considering the move.  Right now the list price on the building is in excess of $600,000 but if a sale were to happen it would have to be more in the $550,000 range.  This of course was one of the primary sticking points in the lease between Warner and Pergola that led the Krebs to walk away from a rather large investment. 

Keep your fingers crossed because there is a good chance Fort Thomas may have another dining option soon.

9 comments:

  1. I think it would be cool to see something go in the ground floor of the building and then something else on the main top floor. Close up the inside staircase so you have one small restaurant/cafe on the bottom floor and then a big restaurant on the top floor. This would be something similar to Pergola (a coffee shop/cafe on the bottom floor, and a full service restaurant on the top floor)they could both share the patio area possibly. Any thoughts from anyone else on this idea? I just hope whatever moves in there will be successful, and stay in business without the hastle of liquor license issues, or the hastle of having issues with the landlord like Pergola did.

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  2. Part 1 of 2

    The statistics and four examples attributed to potential Warner Building investors compare apples and oranges and as such are illusory and irrelevant. Only one of the businesses cited is actually in Fort Thomas and another of the “success” examples has not yet opened its doors for business. Three of the four examples are not solely or predominantly reliant upon Fort Thomas residents and there is no hard data offered to support patronage by Fort Thomas residents.

    Contrary to the assertion in the original post, these examples neither confirm nor refute the perception that Fort Thomas residents do not support Fort Thomas businesses. Consider the following:

    1) Subway. While the success of the local Subway is admirable, it is a fast-food sandwich shop with heavy carryout and limited in-store seating space. By most measures and in most communities, Subway is not considered a “dining experience” destination.

    Moreover, the success of Subway in this particular location could well be considered a red flag: Those who do spend their dining dollars in Fort Thomas are quite happy buying a sandwich and a bag of chips – and Subway’s performance stats support this. Will Subway regulars venture across the street and spend 2x, 3x or more for a meal, and do so on a regular basis? Why should they?

    2) Starbucks. The local Starbucks has a different demographic profile and is a one-of-kind coffee shop serving a wide area. It is not really a restaurant, but serves pie-shop food. In addition to its heavy morning and lunch time traffic, it serves as a meeting place and Wi-Fi zone. Starbuck’s success cannot be conflated with realistic chances for a dining destination that is far more difficult to access.

    3) Kroger. The Newport Kroger is not a valid auger of success for a new restaurant venture in the Fort Thomas CBD. Kroger sells commodities – food, health and beauty aids, ancillary merchandise and home furnishings. In fact – another red flag – its upscale deli and gourmet food offerings could compete with similar menu fare at a dine-in location in the CBD.

    4) Target. The Newport store is not even under roof, and is in no way a valid predictor of success for a restaurant located several miles away. While the construction process may perhaps speak to this national chain’s corporate enthusiasm for the general geographic area, it does not translate into an endorsement of a totally different kind of business - a restaurant – that will be situated in an out of the way location elsewhere. Nor does it pending presence imply or support any assumptions about Fort Thomas residents in particular.

    See the conclusions in Part 2, which follows.

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  3. Part 2 of 2

    The Bottom Line

    All four entities used as statistical examples are nationwide in reach, scope and identity. They are operated on proven retail business models that incorporate the economies of multi-site marketing and supply logistics. With the possible exception of Subway, their geographic source area is wide and not one of them faces closure if Mr. and Mrs. Fort Thomas do not dine in frequently.

    Over the past fifteen years virtually zero mid-range/high-end restaurants have been able to survive in Fort Thomas. Vito’s is one exception, and it’s great that they are hanging on, but over in the CBD and Midway districts the results are very discouraging.

    Location and accessibility make it difficult to attract – and maintain – a cadre of customers from a sizeable geographic area. The fact is, Fort Thomas has been, and remains, a bedroom community.

    The major players in the metropolitan restaurant industry have stayed away, leaving it to the dreamers and under informed entrepreneurs to sink or swim in what amounts to a niche micro-market.

    Regardless of the cost of entry (of which the difference between $550K and $600K is negligible) one key to dining success in Fort Thomas is a function of long term financial staying power. Indeed, if a less than 10% reduction in selling price is a sticking point, then it is likely that the potential buyer does not have the $1 or $2 million necessary to keep the doors open over the long haul. And who, with a clear understanding of the restaurant business, will invest that kind of money when previous results have been zilch? Perhaps a chain or formula franchise operation, but then building size and parking become obstructive issues, as well as myriad competing opportunities from more lucrative locations.

    CBD restaurant success also hinges upon two other critical factors:

    (1) The ability to entice outsiders to invest the extra time and effort in traveling a circuitous and inconvenient route to reach a dining destination. The menu and overall value would have to be extraordinary and unique, if one would ask residents of other communities already possessing fine dining opportunities to make the trip to the Fort Thomas CBD.

    (2) The ability to convince Fort Thomas residents to support the establishment – extending well beyond initial curiosity visits. The batting average in this regard is poor, as it has historically proven very difficult to alter the local budget-driven, meat-and-potatoes/Subway mindset.

    If one wishes to publish data promoting the viability of dining establishments in Fort Thomas, why not ask the owners of Vito’s? What percentages of their business come from Fort Thomas residents and from non-locals? How many of their patrons dine there once a month, quarterly? And how many of these are local?

    Investors and business owners need to employ cold, hard facts in their decision making. Cheerleading is great, but wishing and hoping will not meet a payroll over time.

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  4. Also not considered was 915 Pub and Grill. That place is a goldmine! I think the key to restaurant success in town is affordability and menu selection. Vito's is wonderful restaurant but come on, it is VERY pricey and not someplace people would go to one or more nights a week for a meal. A really good coffee shop is needed as well as something in between 915 and Vito's. Look at the Dilly Deli in Mariemont, that place is great, there is also Maribella's on Eastern Ave. in What about the "locavore" or "slow food" trend? Seriously, it does not have to be a four-star restaurant, good reasonable food, that is unique and good service will make a big difference.

    Wish I had the money and or experience to open a restaurant, I would love the challenge..

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  5. Great to hear from "Cold hard facts". As a former Ft. Thomas food service business owner, it still amazes me how many people have no idea what it takes to really make a food service establishment succeed. A "Gold Mine" reality is not necessarily so. 90 hour work week, hard physical labor, has anyone asked the owner/operator what he really brings home for all of the hours put in? Or the toll it takes on his family while he is away every night, weekend, and holiday? Reality check. Please...if you want to open your "dream restaurant", go work in one first. Not as a server or cook, go do the hard time with the owner or general manager for a month and see if you believe in "gold mines" then. Please don't believe the fairy tale that it doesn't take endless hours of hard work and years of knowledge to be a business owner. Food service is especially brutal, as research and those in the business will tell you.
    I am a "foodie" for life, and thankfully am still in the business that I love. But make no mistake, it is a rare place that makes it and is profitable to it's owners. To all of you coffe shop fans out there...please end the fantasy world of a place like that actually succeeding in Ft. Thomas. Staying open doesn't always mean success. Have you seen how may Starbuck locations are closing across the country? Hang on to those life savings until you really do your homework...

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  6. Well said MTS. Bottom line is anyone who would pay $600k for that building is crazy, it has no parking and will not seat enough people inside to really make any money. No one wants to eat inside that place anyway. The only way it will work is a 6 month a year out door restaurant that serves good bar food at a reasonable price. This is a local place to eat only, non-locals will not just wander into the middle of Fort Thomas to find a place to eat.

    Also, everyone claims that Rick ran a successful restaurant there. If he was so successful then why isn't he still doing it? You don't close a successful restaurant! Warner's had expensive bad food and poor service. It is obvious he wasn't making money

    A food service business has the tightest margin of any industry and for some reason everyone thinks they can succeed. It is a hard business to run. The Fort Thomas market alone cannot support another restaurant unless someone can find a new niche.

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  7. wow, I have to admit you all are right, and even though I don't work in restaurant industry, I am not stupid, I know it is incredible hard work with little thanks and little chance for profit margin. Why would anyone bother? Obviously they don't and won't. Just put another insurance office in there or a bank.

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  8. MTS,

    First, get a life. If your response to a Blog takes up two seperate entry forms you have entirely too much time on your hands. Yes we get the point, you've been in the restaurant business. This Blog is not a city newspaper. People forget that blogs are opinions and no one here is claiming to be an economist or Gordon Freaking Ramsey. Stop being a dream killer and allow us to indulge ourselves. I mean, this town needs another option for $16 burgers and some Sam's Club Chicken Wings. Hell, Im still hoping Talbots will open so Mom will come visit the Fort more often!!!

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  9. 915 has good food but unfortunately, the food tastes like smoke. It needs to be smoke free.

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