Sam and Kathy Guadagnoli have gained a reputation as one of Colorado Springs’ most creative, even fearless, dealmakers.
It’s no wonder: In the last 10 years, they’ve played a key role in remaking the city’s once-sedate downtown into a lively, diverse and busy destination.
While they’ve won much respect, they also have received some criticism. Some blame the Guadagnolis for helping create a downtown that they see as a rowdy, even dangerous club district.
The Guadagnolis acknowledge downtown’s problems, but argue that they’re often blamed for issues over which they have no control.
“The people who cause the problems, they’re not our customers. They’re not anybody’s customers,” said Sam Guadagnoli. “They’re just hangers-on, people who are on the street to cause trouble.”
Just how the community responds to the issues afflicting late-night downtown could have a profound consequence for the Guadagnolis, not to mention the owners of innumerable restaurants, bars and assorted boutiques and shops along Tejon, Pikes Peak and downtown’s other thoroughfares.
Already one club has had its liquor license revoked. Could the Guadagnolis be next?
Sam and Kathy Guadagnoli have owned and operated bars and nightclubs in Colorado Springs for nearly 40 years. Their entertainment venues have not only survived, but thrived.
Today, the couple owns or controls at least six downtown buildings, as well as many other properties in the Pikes Peak region and elsewhere. They operate two mega-clubs (Cowboys and Rum Bay) and four smaller establishments (Level 360, the Red Martini, Blondie’s, and Gasoline Alley), all concentrated in a single half-block area on Tejon.
The exact extent of the Guadagnolis’ holdings is unknown, concealed by an opaque network of LLCs and partnerships. The Business Journal estimates that they have invested more than $15 million in their downtown properties, and that their bars and clubs generate annual cash flows in the low- to mid-seven figures.
The couple’s profile rose after they launched their first mega-club, Rum Bay, which opened 10 years ago after the Guadagnolis bought, gutted and renovated a former Woolworths at 20 N. Tejon.
In visits to cities ranging from Austin to Los Angeles, the couple had noted that nightclubs were often clustered in 19th-century warehouse districts, where vacant commercial buildings provided affordable space and, when remodeled, an attractive atmosphere for patrons.
“What you want in a club district,” said Sam Guadagnoli, “is a lot of places together, with easy parking, in a safe part of town, a destination like a mall, not just one or two clubs.”
To the extent that such buildings existed here, they were in downtown’s heart. For more than a century, that heart had been occupied by banks, department stores, upscale restaurants and long-established retailers. But many of those tenants had departed, leaving vacant, functionally obsolete structures in the city’s historic center.
Real estate investor and consultant Les Gruen of Urban Strategies credits the Guadagnolis for seeing what no one else saw, and taking risks that no one else would take.
“They saw that there was space available at a very low price that could be renovated to fit their needs,” he said, “and they took what was there, and created a club district.”
The Guadagnolis were also well aware of two quirky city ordinances that would help their business grow. First, central downtown is a “parking-exempt” business district, which doesn’t require businesses to provide parking for their patrons. That saved them lots of money. Moreover, admission charges to nightclubs are not subject to sales tax, so that’s one less headache for them.
Fashioned into five interconnected clubs, Rum Bay was an immediate success. Two years after buying it, the couple acquired the former Colorado Springs National Bank building across the street and opened a second mega-club, Tequilas, in 2003.
On most weekends since, Tejon is awash with young revelers. And on a typical weekend, as many as 5,000 customers passed through the doors of Rum Bay and Tequilas, each paying $5 to be admitted.
As might be expected, some of those younger folks occasionally drink a bit too much and get into trouble.
During 2007, the two largest Guadagnoli clubs were the source of nearly 600 police calls for service, far more than those to any other two locations in the city.
The problems made headlines in January of 2008, when a fight involving more than 30 men broke out at Tequilas’ successor, the Vue. When police arrived, they were confronted by a hostile, uncooperative crowd of 200-300 people on the street.
Response to Violence
The Guadagnolis reacted quickly. The next day they closed the club, re-opening it several weeks later as a downtown version of Cowboys, a country-and-western club that they had operated for many years on Academy Boulevard.
“We closed it (Vue) because of the fight,” said Sam Guadagnoli. “I don’t want to say anything bad about anybody, but when (another club) Eden shut down, that same crowd came to the Vue. We saw the problems, and we’re like anyone; you gotta protect your assets.”
To do so today, the Guadagnolis pay the city $8,000 a month to defray the cost of additional police on Tejon.
“The rest of the operators on Tejon don’t contribute,” Guadagnoli said. “They say it’s our problem.”
Guadagnoli doesn’t agree with the sentiment, but he has also adopted a pragmatic approach.
“It has to be safe and fun downtown or nobody will come, and that’s why we pay the cops. It’s in everybody’s interest, especially since the city’s so strapped, so we’re glad to contribute. No one has more to lose than we do.”
In the meantime, more recent police records show that calls for service originating from Guadagnoli-controlled clubs remain high. From the beginning of this year through mid-March, there have been 139 calls for service from Rum Bay, Cowboys and Gasoline Alley.
The statistic, said Sam Guadagnoli, is bogus.
“It includes everything that happens in our block, whether or not we’re even open,” he said. “If a bum passes out and gets picked up by an ambulance at 10 a.m., or there’s a fender-bender, or a speeding ticket, the cop just writes the location. We’re the landmark, so we’re the location.”
Police confirmed that in a lot of cases, Guadagnoli’s point is correct.
As one undercover vice and narcotics officer put it, “(Sam) does a pretty good job of controlling his door, enforcing a dress code, and keeping everything together.”
Ideas for improvement
The Guadagnolis believe that downtown can be improved by some simple measures.
“We need to have linked I.D. systems,” said Sam, “so that if somebody gets thrown out of the Ritz, they can’t just go to the next club.
“We think that all the bar and restaurant owners ought to help pay for enhanced police protection, not just us.
“Also, the law here says that we can’t hire off-duty cops to provide security inside the club in uniform, (but) that’d be helpful.”
The Downtown Partnership, a group that represents the interests of businesses downtown, is exploring other steps including staggered closing hours so that all the bars don’t shut down at once at 2 a.m.
Whatever happens, Jerry Rutledge, who owns an upscale men’s clothing store on Tejon, would like to see Rum Bay — which is less than a half block from his doors — stay in business.
“I’m glad they’re here,” said Rutledge of the Guadagnolis. “They bring people downtown, and even though you’d think those folks aren’t my clients, you’d be surprised. I get lots of customers through them. A girl might see something in the window and tell her Dad, or her brother, he comes in on Monday, we make the sale.”