I’m a huge fan of local restaurants and patronize them about 99 percent of the time I eat out.
But as a pragmatic businessman, I’m not at all disappointed by the news — broken by Insider Louisville’s Terry Boyd — that Gordon Biersch will set up a brewery and restaurant in the Fourth Street Live space vacated by Borders.
In fact, I’d call it a great move. Which means I’ll get called a lot of names before this blog post is over, but bear with me as I explain why.
- Spanning 15,000 square feet, no local restaurateur would be foolish enough to open in a space that large. With generous spacing between tables, that’s still 1,000 seats, and as best I can tell, it’s not designed to host multiple tenants.
- Few to no local restaurateurs have the cash or the design-build team at the ready to make a move to such a space with any speed. A great example of that is the T.G.I. Friday’s on Fourth Street Live: You take one look at that operation and you recognize immediately that such streamlining and smart layout was born of a lot of thought and dollars invested.
Compare that to an independent operation around town, where owners often do some of the construction and painting and furnishing themselves, and you see completely different business model. Such bootstraps business building doesn’t work in a space like the vacant Border’s site.
- Local restaurateurs don’t want another restaurant downtown to compete with. I understand that—especially if you’re Bluegrass Brewing Co., and Against the Grain.
But there are some upsides to this:
A new restaurant the size of a Gordon Biersch will draw traffic downtown from Louisville, the surrounding areas and from convention crowds. Yes, they may stop at GB the first time they visit, but it’s likely they’ll be exposed to local options they’ll want to visit later. Call it a “long term marketing plan” paid for by GB.
- It’s not local beer. Really? This kills me. As if some of the city’s greatest bars served only Louisville area beer. (If you want strictly local, go to ATG, BBC and Cumberland Brews. All others serve “outsider” beer.)
I’ve had GB’s beer, and it’s decent stuff. Is it my fave? No. But it’s waaaay better than “pale gold” standard foaming from the vast majority of taps in town. (The food’s pretty good, too.)
And who knows? Maybe between ATG, BBC and GB, someone could organize a beer walk to promote good brews? I’d lace up my shoes for that trot.
- Does GB’s entry to the fray guarantee a rising tide of interest that will float all ships? No, it doesn’t. The only guarantee that things will go well is if the operation is well run, not whether a competitor moves in. (BBC and ATG in particular have nothing to worry about here.)
Few events promote businesses like other businesses coming in. In other words, competition is good.
- Fans of independent restaurants are bemoaning the arrival of yet another chain. Sorry, kids, but your wishes won’t be granted, and if you actually wished that, your perspective is off.
Great restaurant markets have a balance of chains and independents. When out of balance and tilted toward chains, you have bland, “me, too,” places serving largely uninspired fare. And when tilted to wholly independent scene you sometimes can get not only the same treatment, but food with no edge or innovation. So many small towns have exactly that: chain boredom or lackluster independents that won’t raise the bar.
Chains, I believe, add competition that makes independents push harder and get better—not to mention, increasingly eager to out-do other independents. Again, competition is good.
- Tax revenue is tax revenue, and jobs are jobs, and that’s good. Whether you like chain restaurants is irrelevant in an economy where people are looking for work and municipalities are looking for tax revenue. GB also is a well-run chain, one that would provide excellent professional training experience to anyone who—wonder of wonders—might move on to work for an independent operator or actually open their own place here someday.
- All the money doesn’t head out of town when a chain arrives. One of my favorite and most articulate contrarians is Roger Baylor, one of the partners behind the New Albanian Brewing Co. and Bank Street Brewhouse. He’s not only the epitome of independent operators, he’s a real champion for their causes.
But one of Baylor’s beefs I disagree with is that out of town chains send money away from the area to headquarters elsewhere. Indeed they do send some away: If it’s a franchised unit, royalties returned to corporate rarely amount to more than 5 percent of that restaurant’s gross or net (depending on the contract) sales. If it’s a corporate-owned restaurant, the figure isn’t all that much higher. The math is simple. The bulk of the money stays here.
So isn’t it better to put SOME operation in there rather than none—which is precisely what’s happening? A business that large will employ at least 100 people and possibly gross $3 million or more in sales in a full year. That’s a lot of wages and tax dollars headed back into the local economy—that aren’t there now!
- If you think a large, national retailer wants that space, dream on. Some have lofted the idea of a Target setting up shop there, while others have waxed fantastical, tossed fairy dust in the air and placed their bets on a Nordstrom.
Doesn’t anyone remember how badly non-food retailers in the Galleria suffered in the 1990s? No one really shopped at those places because:
1. There were too many options at suburban malls.
2. Too few people had time to shop downtown because, well, as it’s been for decades, most Louisvillians who work downtown go home after 5, they don’t hang around.
3. Who wants to go to Target on their lunch hour or will give up the convenience of shopping at Target in the ‘burbs to do so downtown? They might go to Nordstrom at lunch, but they won’t shop there after work.
A large retailer will not work there for at least the next five years because there’s simply not enough foot traffic to sustain it. Perhaps if numbers of residents living downtown increases dramatically in that time, maybe a retailer would consider it.
Meantime, I’m lifting a toast to GB (one of Baylor’s beers, which are really good, BTW). May it do well and prosper in a space where no one else has been able to make it for long.