|By Kyle Leppek|
Changes and challenges are on the menu for many area restaurants these days
Some are relocating or expanding. Others are facing financial strain. And a few wonder if they should even go on.
These are some of the scenarios facing Lansing restaurant owners these days.
The restaurant industry is notoriously hard to break into. Consequentially, many new or existing restaurants end up closing their doors within months, adding to the change of scenery.
Fine-dining establishment Troppo moved from its previous location across Michigan Avenue last week into its new location at 120 N. Washington Square. Troppo’s move leaves a vacancy that the restaurant Tavern On The Square is expected to fill. Additionally, a Lansing favorite, Kelly’s Downtown, moved down the street from 203 S. Washington Square to 220 S. Washington Square, but has yet to reopen.
But while some restaurants move locations, others simply shut down. Menna’s Joint, which has two East Lansing locations, opened a downtown venue at 208 S. Washington Square in fall 2008, but is now closed.
Geno Abbey opened a pizzeria adjacent to Izzos Pub in February 2009, but closed the business a few months later. Hes in the process of setting up a new Genos Pizzeria in the former Mennas space.
Early last year the owners of Club 621, located on Michigan Avenue, said it would close for two months for remodeling; it has yet to reopen.
“There has never been a tougher time for restaurants than right now,” said Andy Deloney, the director of public affairs for the Michigan Restaurant Association.
Deloney lists the economy, high operating and upkeep charges and high taxes as common obstacles for restaurant owners.
Cecilia Garcia owns Mama Bear’s in Old Town. The restaurant opened only two and a half years ago at 1224 Turner St. but recently faced closure.
Garcia opened Mama Bear’s with her partner to offer health-conscious food. The restaurant focused on using biodegradable products and serving certified organic food, both of which tend to have a higher cost. As the economy turned, Garcia noticed her business declining.
With a new baby to take care of, Garcia questioned Mama Bear’s future. Then, however, her business partner, Eugene Hall, agreed to invest in the restaurant for another year and half. Now Garcia is working on a new, less expensive two-year business plan for the caf, focused on local, sustainable food instead of certified organic.
Garcia is confident the restaurant will continue to stay open but she would like to see the city give support to small businesses and offer incentives for going green.
Deloney says it is not uncommon for a restaurant to have to change its business plan. “Sometimes they have to change concepts. The only constant in the industry is change,” Deloney said. But he also blames the Michigan Small Business Tax for increasing a restaurant’s tax liability, sometimes as much as 500 percent, according to Deloney.
Amber Elliott, owner of Los Gringos restaurant, fell behind on her state taxes for about a year and a half. The restaurant, located at 6030 S. Martin Luther King Jr. Blvd, was recently given an ultimatum: Pay 10 percent — or $4,300 — of the back taxes, or the state would close the business Jan. 24.
Los Gringos has been a family-owned and -operated restaurant for 34 years.
Elliott was struggling to pay both federal and state taxes and knew the restaurant was in financial trouble. “We have to pay our distributors in order to have our product to serve and we have to pay our payroll so we have employees to serve our product,” Elliott said, “We essentially had to rob Peter to pay Paul.”
To make matters worse, a bag with $900 in checks and $2,000 in cash was stolen from the restaurant in December. “We were hanging by a thread before that time,” Elliott said. “That was kind of the straw that broke the camel’s back.”
In light of the tax situation, Elliott’s friends and co-workers organized a donation box and two benefits for the restaurant. They were able to raise $5,000 in one week, thanks to loyal costumers and a supportive community.
Elliott is working out a payment plan with the state and plans to pay off the restaurant’s 30-year mortgage in April.
Deloney says it is not unusual for restaurants to turn around: “Restaurant owners are very creative. They know how to compete.”