Eateries Feel Chains Taking Bite Out of Business
Restaurants: Despite Growing Number, Independent Owners Still Hold Sway
BY CONNIE LEWIS
Tourists flock to the restaurants, clubs, bistros, hotels, shops and galleries in the Gaslamp Quarter.
Locals, on the other hand, are a different story. Restaurateurs complain that they don’t draw enough business from the folks who live, work and play in America’s Finest City.
George Georges, a partner and manager of Max Restaurant and Lounge, said local eateries can’t rely solely on conventioneers, but parking constraints and higher fees that accompany nighttime Padres games at Petco Park have taken a toll on the regulars.
David Cohn, a member of the Gaslamp Quarter Association and owner of the Cohn Restaurant Group, which has four of its nine eateries in the historic district, said there are talks under way with the Padres to change part of their game schedule to afternoons next season. Meanwhile, his company is considering a valet parking program and special promotions to lure more customers to some of his Gaslamp Quarter restaurants that have seen a decline in customers on game nights.
Other restaurateurs blame an increasing number of clubs, such as Deco’s, Lime, onyx, L5 Nightclub, in addition to On Broadway and Jimmy Love’s for changing the district’s demographic to a younger crowd that favors clubbing over fine dining.
Jack Berkman, who owns Berkman Communications and was a partner in Fio’s before it closed last summer after 13 years in the Gaslamp Quarter, said one of the biggest reasons was that the older crowd , once a mainstay of the restaurant’s business , steered clear of the nightclub scene. Fio’s and Croce’s were among the first of a wave of restaurants to open in what is now known as “restaurant row” on Fifth Avenue.
But Croce’s, a fine-dining restaurant, is still going strong and Mister Tiki Mai Tai Lounge, one of the Cohn Group of restaurants, opened earlier this month at the Fifth Avenue location once occupied by Fio’s.
Restaurant space does not go begging in the Gaslamp Quarter. But the recipe for success is to offer something others don’t, said Cohn, who operates Dakota Grill & Spirits, Blue Point Coastal Cuisine, the Strip Club, A Steak Place, and Mister Tiki restaurants in the district.
“The question restaurateurs have to ask themselves is how am I going to be different than any other in the Gaslamp, and why would someone want to come to my restaurant,” Cohn said.
He cited Blue Point as an example of filling a void in the market for eateries specializing in seafood. Now, in addition to Osetra, The Fishouse, which is scheduled to open later this month, Oceanaire Seafood Room, which is part of a national chain, is scheduled to open in early fall.
There is “no question” there are more national chain restaurants in the Gaslamp Quarter now than there were five years ago, Cohn said. Some of the more recent are Rock Bottom Brewery and Hennessy’s, which join a list that includes Hooters, Dick’s Last Resort, the Hard Rock Caf & #233; and T.G.I. Friday’s.
While rents in the district are high , averaging between $3 to $4 per square foot , large chains may have an easier time proving they’re credit-worthy. But some were short-lived, including the Louisiana Redfish and Planet Hollywood.
James Schmidt, who owns James Schmidt Architecture in the district and is chairman of the board of directors of the Gaslamp Quarter Association, said the chains do not detract from the unique appeal of the area, nor do they deter business.
“Independent property owners are interested in getting the best deals they can,” Schmidt said. But by their nature, many large chain eateries, particularly those with a presence in nearby regional shopping malls, don’t zero in on the Gaslamp Quarter to expand.
“It isn’t a case of whether we would or wouldn’t want them,” Schmidt said. “Most likely, they wouldn’t want to come here.”
Cohn said the chain restaurants in the area are somewhat unique.
“I’d be concerned if a McDonald’s or Burger King came in,” he said. “But I wouldn’t have a problem with a fast-food restaurant that was unique.”
Furthermore, the area is the envy of historic districts across the country.
“We get calls on a weekly basis from other areas asking how they can be as good as the Gaslamp,” Schmidt said.
Cohn said Downtown’s growing population of condominium dwellers is expected to generate more business for Gaslamp restaurants.
The Gaslamp Quarter Association has worked hard to increase retail, including chain outlets such as Borders books and Z Gallerie, Cohn said, because they offer the type of goods and services that local residents seek.
As Katherine Stuart, owner of Restaurant Events, a company that specializes in arranging Gaslamp Quarter entertainment and dining for convention groups, pointed out, the burgeoning local customer base will also alleviate some of the parking problem, since condominiums have their own parking garages.
Stuart also suggested that Gaslamp restaurants, many of which don’t open before dinnertime, could attract more businesspeople from surrounding office buildings and conventions if they were open for lunch.
“They need to watch the flow of foot traffic in the Quarter, the same way a retailer does that stays open until midnight on Fridays and Saturdays,” she said.