Restaurant properties at a premium along Main Street in Breckenridge
Retail and restaurant space across Breckenridge is at a premium, especially on Main Street, yet business owners are still vying for a slice of the lucrative pie. A look at Summit County’s most in-demand market:
777,961 square feet — Total restaurant and retail space
17,643 square feet — Vacant retail space (March 2015)
35,344 square feet — Vacant retail space (March 2014)
2.27 percent — Retail and restaurant vacancy rate (March 2015)
4.54 percent — Retail and restaurant vacancy rate (March 2014)
18 — Vacant retail properties (March 2015)
34 — Vacant retail properties (Last quarter)
Source: Breckenridge Commercial Newsletter, April 2015. All figures current as of March 29.
Just over two weeks remain until the official start of mud season and restaurateur Jeff Palomo is already looking ahead to renovations for summer.
Palomo, owner of Breckenridge Tap House and Oscar’s of Breckenridge, has been in business on the north end of Main Street since 2013. Last December marked the grand opening of the tap house portion, a concept the owner thought would work well at his taco and tequila bar because, well, beer just resonates with Breck visitors.
“Colorado is such a premier place for craft beers,” said Palomo, who’s a software engineer by day and restaurant owner the remainder of the time. “Our primary home is down in Denver, in the ballpark neighborhood, and it’s exploding with the craft breweries. I think this is just an awesome addition for a town like Breckenridge. People come to Colorado for beer.”
And now it’s on to the next project. When the combination taco joint and tap house closes for a few weeks in the off-season — the circle of life for most restaurants in a resort town — Palomo and crew will get started on brand-new tequila and whiskey cases for the lower level. The momentary lull between winter and summer is just about the only time he makes sweeping changes.
“It can be hard,” Palomo said of the seasonal ebb and flow. “Things take two or three times longer than you think they will and you just can’t make changes when you’re operational. It’s just a matter of fitting it in when you can.”
The new liquor cases are the latest in a seemingly endless series of upgrades, but for a business owner in the heart of Summit County’s most sought-after market, they’re necessary.
Breckenridge posted record lodging revenues this season, according to the Denver-based firm DestiMetrics, and in-town real estate agents say space along Main Street is the tightest it’s been since before the 2008 economic crash. As of March, roughly 98 percent of the town’s retail and restaurant space is taken, up from about 95 percent for the same time last year. Breck has long been in demand, but with just 17,600 square feet of space available town-wide, the 80-odd restaurateurs who’ve staked a claim along Main are in a coveted position.
“We’re kind of the ‘it’ place right now,” said Jack Wolfe, owner of the commercial real estate firm Wolfe and Co. “With more visitors comes more demand for services like restaurants and bars. Breckenridge has the good problem of more people wanting to do more here.”
MAIN STREET APPEAL
Unlike Vail and other “purpose-built” ski towns, Wolfe says Breckenridge stands apart for tried-and-true authenticity.
Look at Oscar’s: The restaurant is housed in the Springmeyer building, a historic cabin that was built in 1873 and moved by crane to its current location in 2011. The interior still feels like a rustic mining homestead, complete with tight staircases and wood accents. When paired with 37 rotating beer taps and 170 tequilas, it has the atmosphere and selection that are popular on Main Street. Palomo says guests would wait up to two hours on weekends for a spot in the 85-seat dining room.
“It went damn good for being so new,” Palomo said. “I really think it’s the location. We promoted the tap house addition, but it’s phenomenal — when tourists see us once they’ll come back for several days in a row.”
But location comes at a price. Palomo estimates he spent $300,000 on renovations alone, not including the logistics of a crane move and the land itself.
A bit farther south on Main Street, Blue Stag Saloon is another relative newcomer housed in a beloved building. For nearly three years, current owner Terry Barbu talked with the former owners of Whale’s Tail to get his hands on the property. He’s opened 68 restaurants across the U.S. — 38 of which he still owns — and specializes in failing properties.
“They didn’t call me and say, ‘Hey, we’re not doing well, please come save us,’ but I treated it like I would any failing restaurants,” said Barbu, who’s other restaurants are split between Atlanta and Cleveland. “Now, this is just a fun Breckenridge bar. The concept was pretty easy to me — I don’t want to sound cocky, but it really can be.”
After a complete face-lift, totaling roughly $534,000, the Whale’s Tail reopened as Blue Stag last June. Within the first 48 days, it posted the same profits its predecessor did in all of 2011.
“The biggest thing was to change the perception of the space,” said Barbu, who’s portfolio includes a mix of nightclubs and up-scale restaurants. “When you were in here before, it was like a bad Red Lobster. We completed redid the place and it’s much more appealing now.”
THE FLIP MENTALITY
Like the Whale’s Tale before Blue Stag, the vast majority of Main Street restaurant space is already spoken for, due in large part to high fees. A completely new restaurant like Oscar’s had to pay onetime plant investment fees for water and parking.
While PIFs are a major first-time expense, they transfer from owner to owner for the life of the property. This makes renovations much more appealing than complete demolitions.
Barbu’s next project is another spin on an oldie but goodie: three20south. The former music club closed near the end of last ski season, and as soon as the coveted space below the second-floor club opened up, he hopped on the property. The purchase was finalized on Feb. 12.
“You pay for the location,” Barbu said. “I don’t want to be on Ridge Street, I don’t want to be on French Street — I don’t want to be anywhere but Main Street. I’m a firm believer than rent takes a back seat to starting with the right location.”
Plans are already in the works for a three-story restaurant, dubbed Flipside, the first Colorado location of a small chain Barbu helped open in Cleveland. By the time it opens for business in May, the gourmet, grass-fed burger joint will have gone through roughly $1 million in renovations.
For Barbu, who’s familiar with the intensely competitive atmosphere of a big-city market, Main Street is relatively straightforward. He was admittedly surprised that another tenant didn’t defensively lease the space, simply to keep a hungry investor like himself from scooping it up.
“Bottom line is, I’m a fighter in this business,” Barbu said. “I will fight for every holiday, every occasion, anything I can. I will show this town something it hasn’t seen, and that’s how to run a restaurant hard.”
Despite a lack of square footage — not to mention the relatively laid-back business mentality — Barbu believes Main Street isn’t an impossible market: Once you’re in, it’s hard to lose your footing, he says.
“There is a lack of restaurant space here, and that’s why I’m willing to put a million dollars into a space,” Barbu said of Flipside. “I know it will be here 20 years from now. Slow and steady can work — it’s not always fast and furious.”
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