Posts Tagged ‘Bob McMahon’
Restaurateurs respond to the economic downturn in different ways–and some even say there’s a silver lining
By ADAM BOROWITZ
This is turning out to be a rather unappetizing recession.From the foothills to the southside, people are eating out less to save money, leaving restaurant owners scrambling for ways to adapt.
The fates of those unable to adapt are shown by shuttered windows and locked doors. Terra Cotta, 58 Degrees and Holding Co., Cuvée World Bistro, Old Pueblo Grille Foothills and the Casbah Teahouse have all closed in recent months, each taking with them a piece of Tucson’s culinary culture.
It’s a problem with appreciable reach. The Arizona restaurant industry employs about 250,000 people and brought in $8.4 billion last year, according to Steve Chucri, president and CEO of the Arizona Restaurant Association. And like many industries, restaurants link to a network of suppliers and distributors that employ countless more.
“Most restaurateurs are certainly having a difficult time and are struggling,” says Chucri. “Any optimism we are seeing is cautious optimism.”
One of those struggling restaurateurs is Bob McMahon, owner of Metro Restaurants, the parent company of Ristorante Italia, Grill on the Green, Old Pueblo Grille, Metropolitan Grill and McMahon’s Prime Steakhouse.
“I don’t know that I’ve ever seen anything like this, and I don’t know if there’s a magical bullet for any of it,” McMahon says. “I would guess that 20 percent of the restaurants in Tucson need to go away for any of the restaurants to make it.”
McMahon says most of his eateries have made adjustments to stay competitive. Prime rib that once sold for around $30 now goes for $21.95 at McMahon’s Prime Steakhouse, says Dan Multhup, Metro Restaurants’ director of operations. Extended happy hours, ladies’ nights, more specials, redesigned menus and an added emphasis on service have also been put in place at most of McMahon’s eateries.
“We can’t discount our way out of this; we just need to be better than the next guy,” says Multhup. “Our No. 1 focus is giving guests a reason to come dine with us. The poor service of yesteryear is no longer acceptable.”
Award-winning chef and restaurateur Janos Wilder has noticed a similar slowdown in business.
“This is new. We never really had to worry about what the season was going to bring,” says Wilder, who owns and operates Janos and J Bar at Westin La Paloma Resort. “We are seeing that volume clearly go down. In spite of that, we’re really confident and optimistic.”
Much of that confidence is due to a business model that caters to the high end at Janos, while the less-pricey J-Bar can serve as a growth vehicle when times get thin, says Wilder.
Wilder has still made changes, increasing advertising by about 40 percent and putting off upkeep projects, he says. He’s also been “tightening the belt” by ordering smarter and creating menus that help him stay within budget without hedging on quality.
“We believe if we do all the right things, then we don’t need to compromise the quality of the product,” says Wilder. “We want Janos to be top of the line, the pinnacle of culinary perspectives, but we are tweaking our pricing strategies.”
Janos now offers a $20 rib eye alongside French-inspired Southwestern entrées that fetch between $28 and $45. This approach is echoed at J Bar, with $12.95 entrées finding a home among selections in the $15 to $18 range.
“People want special things in their lives, and we want to be there to allow them to do that a little less expensively,” says Wilder.
Officials at Westward Look took a vastly different approach, says general manager Alan Klein.
Instead of hunkering down and weathering the recession, officials decided to spend $10 million retooling the AAA Four-Diamond resort and their flagship eatery, now called Gold (formerly the Gold Room), as well as the Lookout Bar and Grille, in an effort to appeal to visitors and locals alike.
Westward Look has introduced specials in the form of dollar canned beer on Saturdays, family nights, fish frys and other homey-sounding offers that seem somewhat out of place at a resort known for $85-a-person wine dinners.
“We recognize that in a down economy, your locals are your bread and butter,” says Klein. “There’s a crowd out there who’s forgotten about us.”
Downtown at Hotel Congress, business has been steady, slipping just a bit in recent months, says general manager Todd Hanley, who is also the president of Tucson Originals, an alliance of about 40 locally owned and independently operated restaurants.
Hanley says many diners are becoming disinterested in lavish, expensive meals and are seeking a more common-sense approach when spending their diminishing disposable income.
“Fine dining is fast becoming a dinosaur,” Hanley says. “It’s the casual fine dining people are looking for.”
Hanley says the recession is an opportunity to identify weaknesses and plan for the future. He expects the rest of 2009 to be rough on local restaurants.
“We have to weather this storm for another year or 18 months,” Hanley says. “If you’re not concerned, you have your head in the sand.”
While many restaurant managers are rethinking their customer base and the way they do business, others say the secret to success is making sure a bulletproof business plan is in place from the very beginning. That is exactly what Jay and Kim Thorpe aimed for when they opened Game on Sports Grill in December.
The couple considered 38 other locations before settling on the former Chuy’s Baja Broiler spot at 6453 N. Oracle Road. They also agonized over food costs, the lease and other details that could have whittled away at their revenue.
“If you don’t have a good business plan, those wounds are going to show through in an economy like this,” says Thorpe, adding that he knows how much he pays for each item–down to the ounce. “I’m also a pilot, and if you go up in a plane, and you don’t have a checklist, and you don’t have a procedure, you are flying blind.”
That’s a philosophy shared by the Arizona Restaurant Association, which expects the industry to rebound sometime toward the end of the year.
“Arizona is still a hotbed of growth in the restaurant industry,” Chucri says. “But current restaurants aren’t expanding as fast, and new restaurateurs are doing their homework and doing their best to offset hardship down the road.
“The industry will remain strong, and will become more sustainable as a result of all this,” Chucri says.
(Editor’s Note: This was veteran newsman Steve Emerine’s first column for Inside Tucson Business. It appeared in the June 20, 2005, issue and dealt with an idea at the time to build a 27-story high-raise in downtown Tucson called the Century Tower. Estimates were that it would cost $60 million to $70 million. That week, the Tucson City Council decided against giving Bob McMahon, owner of Metro Restaurants, and Don Martin, owner of Competitive Engineering, their requested exclusive negotiating rights to buy the city-owned property for the tower. As a result McMahon and Martin never pursued the idea.
We reprint the column in tribute to Steve Emerine and as an example of the knowledge and institutional memory he brought to local issues.)
So where in the world did restaurant owner Bob McMahon and manufacturer Don Martin get that idea of building a 27-story high-rise next to the Joel Valdez Library in the middle of downtown Tucson? Are they crazy? Well, it wasn’t their idea. And no, they’re not crazy.
For 40-plus years, experts have told officials in cities whose downtowns have crumbled because of outlying shopping centers with plenty of free parking to do exactly what McMahon and Martin are proposing.
They told Tucson to do it. I wrote stories mentioning buildings like the McMahon-Martin proposal when I covered City Hall in the 1960s for the Tucson Daily Citizen (the afternoon paper’s official name when it was owned by the William A. Small family.)
In those days, urban experts were urging cities to let the private sector build tall structures with underground parking, retail stores at street level, several floors of office space, upscale residential units above the offices, and a restaurant or night-club on the top floor.
The last idea was the only one Tucson adopted then. We had the Skyroom, which later became the Tucson Press Club, at the top of the nine-story Arizona Land Title Building at the northwest corner of Stone Avenue and Alameda Street, and the posh Old Pueblo Club later took over the top two floors of the Tucson Federal Savings Tower south of Pennington Street on the east side of Stone.
Buildings at those locations are now owned by Pima County. The title building was gutted and rebuilt to house development services. The former savings tower is mostly occupied by county lawyers. And the night-clubs and restaurants in both buildings are gone.
Tucson finally jumped on the national urban renewal bandwagon, but it followed advice from other urban planners to pursue the tourism and convention business. Once historial neighborhoods that had been taken over by sleazy bars, flop houses, prostitutes, drug dealers and other frowned-upon uses were condemned.
They were replaced by the Tucson Convention Center Arena, Music Hall and Leo Rich Theatre, the hotel currently known as the Radisson City Center (Editor’s note: now the Hotel Arizona), and the rambling multi-colored La Placita complex. Recommendations to build a building like McMahon and Martin have suggested were put on hold.
City officials were told that the Diamonds department store chain would anchor La Placita. When Diamonds decided to go to shopping centers and not downtown, the promoters swore La Placita would thrive anyway with restaurants and lots of small shops and offices on all levels.
That didn’t work. In hindsight, it might have if they had let people live on upper floors of La Placita so the ground-floor businesses could have some customers within walking distance. When that idea was proposed later, the cost of adding adequate plumbing for residential uses was too high.
So La Placita joined the title building and the savings tower building to house more offices for government workers to hang out in from 8 to 5, five days a week.
That brings us back to McMahon and Martin, who want a six-month option to buy land next to the library at its appraised market value so they can study the feasibility of their tower idea. If it will work, they would buy the land and go ahead. If not, the city would keep the land.
Some opponents decry the loss of a grassy patch next to the library and say the tower would block their views of the mountains and the old Pima County Courthouse.
But the grass is relatively new, replacing what was an old green-colored office building and a parking garage. And some of the views have already been blocked by other things.
At least the tower would help hide that ugly red cockroach statue at the library.
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