Two longtime staples of the Eastside restaurant scene closed within weeks of one another last summer, with Mimi’s Café and Outback Steakhouse shuttering their New Center Point Drive locations.
Six months later, Eastside residents lost another dining option when Fox and the Hound sports bar closed its doors in the First & Main Town Center northeast of Powers Boulevard and Carefree Circle.
And patrons of José Muldoon’s Eastside location on South Carefree Circle need only look across the parking lot to see the vacant building that once housed Village Inn, the Nashville-based chain’s first Colorado Springs location to close last September. Two more Village Inns — one in Monument, another on North Academy Boulevard — have since closed following a January bankruptcy filing by the restaurant chain’s owner.
Each of these establishments, with the exception of Village Inn, closed with little fanfare after long stints on the Eastside. Both Mimi’s and Outback had operated in the First & Main Town Center for 17 or 18 years, according to local media outlets.
The Powers corridor, while highly visible, comes with its challenges for residents looking for a dining experience in their neighborhood, said Lindsey Samelson, a broker with Colorado Springs commercial real estate firm Hoff & Leigh.
“When I interview other business owners in Indigo Ranch and Banning Lewis, they are begging for more restaurants in that space so that they don’t have to go all the way to Powers,” Samelson said. “The accessibility is a little bit of a challenge, and of course the extremely high commercial rent rates — pushing into the [$30,000 annual range] — makes it challenging, particularly for locals.
“Ultimately, rates have risen so astronomically that I would venture to guess it is very challenging to keep a restaurant open with the cost of rent anywhere like the Powers corridor,” she added. “Furthermore, you’ve got the Powers corridor with a ton of brand-new development, and it’s the brand-new development that’s demanding the higher rent rates.”
ROOM TO GROW
Still, Eastside restaurant owners seem to agree: The area’s recent casualties do not represent a restaurant exodus from the neighborhood. Nor do they suggest that the Springs’ restaurant scene has reached its saturation point.
“There is an influx and renaissance happening in Colorado Springs,” said Mackenzie Maltby Tamayo, spokesperson for Altitude Hospitality Group. “Consumers are looking for places that are not cookie cutter like they have been in years past.”
But restaurateurs say the loss of time-honored establishments is emblematic of the industry’s current struggles with rising labor costs.
“Labor has never been harder to source than it is currently,” said Randy Price, president of Rocky Mountain Restaurant Group. “The larger-scale-format restaurants are struggling because it requires so many people to staff them.
“It’s just being able to adapt and adjust to the current market, source the right labor and find enough staff to source your operations,” he added. “It’s squeezing profit margins.”
As of Jan. 1, Colorado’s hourly minimum wage increased from $11.10 to $12, with rates for tipped employees jumping from $8.08 to $8.98.
“I think we have the fifth-highest minimum wage in the country, and we’re probably the 25th-best statewide economy in the country. … So that’s a difficult formula,” said Luke Travins, co-owner of Springs-based Concept Restaurants, José Muldoon’s parent company. “The casual mid-market, full-service restaurants are probably affected the most because we generally employ a good amount of people and have a mid-level price point.”
For example, Price said, he closed Sonterra Innovative Southwest Grill in August, after 16 years at its South Tejon Street location in downtown Colorado Springs. A message on the restaurant’s website states that owners “plan to observe and determine the best use for this space” that will complement Downtown’s evolving business landscape.
However, Rocky Mountain Restaurant Group’s Eastside endeavors — Salsa Brava Fresh Mexican Grill and Urban Egg, both located at Powers and Dublin boulevards — have been open for about three years and are “doing real well out there,” Price said.
“But they’re not enormous footprints,” he said. “They’re built so that they have good energy, and they have a reasonable staff requirement there. We’re trying to keep them the size that we know works the best, where we can find staffing and maintain high energy with the guest counts. We’re putting them in areas where we feel like there’s a good labor draw.
“We’re steering clear of those enormous restaurant spaces,” Price added. “Those are becoming less popular.”
Travins thinks that the explosion of residential and commercial development along and around Powers will work for the restaurant industry, rather than against it — particularly in the wake of Amazon’s Feb. 13 announcement that it plans to open a 4-million-square-foot fulfillment center in Peak Innovation Park at the Colorado Springs Airport.
“North Powers is really expanding and the housing going up there is following it,” Travins said. “And then I’m sure there’ll be several new restaurants that open once Amazon and the airport development gets going. That’s not too far south.”
Indeed, Samelson said a “highly recognizable” restaurant tenant recently signed a letter of intent for a 10-year lease on 3,000 square feet of the 15,000-square-foot building at the corner of Dublin Boulevard and Marksheffel Road.
“He took the entire south end of my building,” Samelson said. “He’s so excited to make his restaurant debut on that corner, because he knows it’s going to work.”
Samelson did not name the restaurant, but said the tenant has five other locations in the Springs.
ADAPTING AND SURVIVING
Would-be restaurateurs should be mindful of the community at large, said Tamayo, of Altitude Hospitality Group.
“Colorado Springs is made up of many smaller communities that demand differently,” Tamayo said. “This is why we put North Side Social where Till used to be and moved Till to the Westside/Broadmoor area.”
Last fall, Altitude announced plans to relocate Till Kitchen from its former location on Prominent Point, making way for North Side Social, a dining concept with indoor/outdoor games that officially opened Feb. 14.
Last month, Altitude founder Mitch Yellen told the Colorado Springs Independent that Till will join Garden of the Gods Gourmet at its 26th Street location this spring.
“We felt North Side Social’s concept would do much better with the community up north, as it is made up of a lot of families,” Tamayo explained.
Those are the factors business owners should consider when looking to open a restaurant anywhere, Travins said.
“I think you need to have a really good financial plan if you’re going to open on the Eastside, because the business is very seasonal here,” he said. “You have to be able to withstand the seasonality and the ups and downs of the restaurant economy.”
Eastside restaurants typically enjoy a strong holiday shopping season thanks to the concentration of retail along Powers, Travins said. Other seasons, however, are less predictable.
“Summers can be more up and down because Downtown thrives,” he said. “People love the patios and I think they go for hikes on the Westside and then end up Downtown. [That area] is such a tourist destination, where I would not classify our corridor as a tourist destination.”
Ultimately, while the Eastside landscape is nearly unrecognizable as the one José Muldoon’s joined when its second location opened in 2009, the business climate remains mostly unchanged, Travins said.
“A lot of neighborhood regulars and a lot of military frequent us, and a lot of people who shop at Kohl’s or Dick’s Sporting Goods make a day of it,” he said. “There’s more chain restaurants on the Eastside, and I think a lot of these chains are used to switching things up after their concept maybe runs its course. It’s the nature of their business.”