BW3 and Burger Joint Coming Downtown

[MotownSpartan]

http://www.crainsdetroit.com/section...Id=personaDest

"He said every board meeting on the subject brings out naysayers who are unwilling to overlook the risk to see the potential reward. . . “We are coming downtown at some point but I am not going to over pay or over invest,� he said. “I’m not going to pay $26 to $30 a foot to be located in Detroit.�
Ansley said the potential property has been let go for so long that it lacks the basic infrastructure needed to operate a business, namely plumbing and electricity."


What location could this be? 1001 Woodward?

[hudkina]

Well this quote:

Ansley said the potential property has been let go for so long that it lacks the basic infrastructure needed to operate a business, namely plumbing and electricity.

makes the only logical choice the National Theatre. That's pretty much the only building in the Campus Martius area that fits that description.

[Gsgeorge]

The Monroe Bloc---oh, wait.

[crawford]

Misleading title [[typical Crains boosterism and misreporting).

It says either concept may come at some point in the future. Big difference.

[BVos]

These are the same people that took 4+ years to build and open J Neils Mongolian BBQ and the Keystone Martini Bar in downtown Ypsilanti in a formerly abandoned building that was white boxed for them by the landlord. This group is incredibly fickle on urban locations. They want WASPy locations or it's a no go. Chalk this up to another skippers rules. Ain't never gonna happen.

[detmi7mile]

These are the same people that took 4+ years to build and open J Neils Mongolian BBQ and the Keystone Martini Bar in downtown Ypsilanti in a formerly abandoned building that was white boxed for them by the landlord. This group is incredibly fickle on urban locations. They want WASPy locations or it's a no go. Chalk this up to another skippers rules. Ain't never gonna happen.

4 years? my goodness...well let's hold out hope that this one may happen

[BShea]

Misleading title [[typical Crains boosterism and misreporting).

It says either concept may come at some point in the future. Big difference.

The CEO says," We are coming downtown at some point ..."

Which, unless he's lying, means they're coming downtown. How is that misreporting or boosterism?

[PQZ]

The CEO says," We are coming downtown at some point ..."

Which, unless he's lying, means they're coming downtown. How is that misreporting or boosterism?

Two words: Rock Financial.

[bailey]

Quote:
Originally Posted by crawford
Misleading title [[typical Crains boosterism and misreporting).

It says either concept may come at some point in the future. Big difference.


The CEO says," We are coming downtown at some point ..."

Which, unless he's lying, means they're coming downtown. How is that misreporting or boosterism?

It's boosterism because statements like this have been made so many times as to make them meaningless. How is Cadillac Centre coming? How are those lofts in 1001 Woodward doing? How are the Broderick lofts doing? How is that shopping center/urban flea market going on Woodard? still coming "summer 2009?" Is Sheild's or Buddy's or whatever still "comming soon" to the Kales? Did I miss the Quicken loans building groundbreaking?

It sure seems like most of what is breathlessly announced as "coming soon"...or just a matter of finding the right location for the right price... never gets past the press release. So, don't get all suprised if the news is greeted with a huge shrug and a large amount of skepticism. Especially when the "failure" to actually do anything is so often blamed on Detroit's bad buisness climate or the dismal economy.

Another reason why it's boosterism is because no one ever calls these people out. 6 month from now, when they've blown thier claimed timeline, will there be a follow up on why it didnt get built? A year from now when this still isnt built will you ask them why it isnt? When it's inevitably blammed on unreasonable landlord demands, wiill anyone follow up?

Stop reporting on these things until they are close to shovel ready with contracts signed and you won't get people rolling their eyes and making snarky "I 'll believe it when I see it" remarks.

[kraig]

I would suggest that those of you complaining about Crain's, read the story again. It's not boostering or misquoting. It's an accurate account of what was stated by a number of sources and it speaks to some of the impediments that go into the decisions to not locate downtown. For those that are in a position to facilitate businesses getting established in Detroit, those impediments are very real and extremely difficult to navigate around.

[davewindsor]

http://www.crainsdetroit.com/section...Id=personaDest

"He said every board meeting on the subject brings out naysayers who are unwilling to overlook the risk to see the potential reward. . . “We are coming downtown at some point but I am not going to over pay or over invest,� he said. “I’m not going to pay $26 to $30 a foot to be located in Detroit.�
Ansley said the potential property has been let go for so long that it lacks the basic infrastructure needed to operate a business, namely plumbing and electricity."


What location could this be? 1001 Woodward?

What a bunch of cheapskates. Downtown already has McDonald's, Tim Horton's, Subway, Hard Rock Cafe and a bunch of other major franchises and they don't think they can make a go at it at $26 a foot? Heaven forbid that they might go bankrupt hiring 10 employees at minimum wage. I'm sure those 10 jobs will revitalize downtown. If they're so worried that they won't make money at $26 a foot, their product really isn't that popular and they shouldn't even bother talking about moving into downtown. If saying they can't make a business case at $26 a square foot is not bad PR about how unsure they are about the success of their brand, I don't know what it. You'd never see McDonald's or Tim Horton's openly say something like that in an article because they know their product will sell anywhere. Last few times I was at the McDonald's in the RenCentre, there was still a lineup to order.

[HazenPingree]

How many employees would a place like that employ? I would have guessed about 25, but did anyone else read that mind bending number listed in Model D for Lucky's? Apparently, Lucky's on Jefferson is going to hire 150 employees for their one story restaurant.

[REL]

What a bunch of cheapskates. Downtown already has McDonald's, Tim Horton's, Subway, Hard Rock Cafe and a bunch of other major franchises and they don't think they can make a go at it at $26 a foot? Heaven forbid that they might go bankrupt hiring 10 employees at minimum wage. I'm sure those 10 jobs will revitalize downtown. If they're so worried that they won't make money at $26 a foot, their product really isn't that popular and they shouldn't even bother talking about moving into downtown. If saying they can't make a business case at $26 a square foot is not bad PR about how unsure they are about the success of their brand, I don't know what it. You'd never see McDonald's or Tim Horton's openly say something like that in an article because they know their product will sell anywhere. Last few times I was at the McDonald's in the RenCentre, there was still a lineup to order.

Dave,
Are you in the restaurant business? If so, I encourage you to open your own place downtown. Go right ahead, I'm sure it's a 100% safe investment. But in the event you've never owned a restaurant in your life [[like I haven't), why don't we leave these decisions to the grown-ups with money to invest who have been doing this longer? If they currently have $20 million in revenue, I think they kinda know what they're doing, at least to some extent.

Speaking of franchises, BW3 and Bagger Dave's aren't fast-food restaurants, so your comparisons to McDonalds, Subway, & Tim Horton's are apples-to-oranges. They have different business models.

As for Diversified Restaurant Holding's future investment in the city, I applaud them for considering the idea and hope they see past *ahem* all of the negativity and come into the city.

[WALD0123]

What a bunch of cheapskates. Downtown already has McDonald's, Tim Horton's, Subway, Hard Rock Cafe and a bunch of other major franchises and they don't think they can make a go at it at $26 a foot? Heaven forbid that they might go bankrupt hiring 10 employees at minimum wage. I'm sure those 10 jobs will revitalize downtown. If they're so worried that they won't make money at $26 a foot, their product really isn't that popular and they shouldn't even bother talking about moving into downtown. If saying they can't make a business case at $26 a square foot is not bad PR about how unsure they are about the success of their brand, I don't know what it. You'd never see McDonald's or Tim Horton's openly say something like that in an article because they know their product will sell anywhere. Last few times I was at the McDonald's in the RenCentre, there was still a lineup to order.

I was under the impression retail rents in the CBD were closer to $18-$20/SF right now anyway. Regardless, all restaurants and retailers have to weigh the cost of doing business in a particular location against the potential sales. In a typical suburban BWW, they pay $28-$36/SF with expected sales of $300-$450/SF. Obviously, they expect lower sales downtown.

[bailey]

I would suggest that those of you complaining about Crain's, read the story again. It's not boostering or misquoting. It's an accurate account of what was stated by a number of sources and it speaks to some of the impediments that go into the decisions to not locate downtown. For those that are in a position to facilitate businesses getting established in Detroit, those impediments are very real and extremely difficult to navigate around.

No. it's not "accurate". The opening statement contradicts [[or at least confabulates) the "facts" from the source.
The article states

Buffalo Wild Wings and Bagger Dave’s Legendary Burgers and Fries are coming to downtown Detroit, it’s just a matter of when and where

The group president and CEO says:

Michael Ansley, president and CEO of Southfield-based Diversified Restaurant Holdings, said the company is negotiating with several unnamed players to bring the concepts to Campus Martius if they can work out the right type of deal for the right location.

“We think we got the location we want, but nothing is solidified just yet,” Ansley said. “If all goes wellit could be announced within six months.

followed by

“We are coming downtown at some point [qualified with] but I am not going to over pay or over invest,” he said. “I’m not going to pay $26 to $30 a foot to be located in Detroit.”

[[which of course means that they may never, in fact, come downtown)


I don't think anyone is disagreeing with the "facts". The facts are; a restaurant group might open one or more restaurants if they can do it on terms that make sense to them. They might do this at some vague point in the future and maybe an announcement is coming in 6 months but maybe nothing happens until 2017....or quite possibly nothing happens at all.

woo-fucking-hoo. stop the presses.

[davewindsor]

Dave,
Are you in the restaurant business? If so, I encourage you to open your own place downtown. Go right ahead, I'm sure it's a 100% safe investment. But in the event you've never owned a restaurant in your life [[like I haven't), why don't we leave these decisions to the grown-ups with money to invest who have been doing this longer? If they currently have $20 million in revenue, I think they kinda know what they're doing, at least to some extent.

Speaking of franchises, BW3 and Bagger Dave's aren't fast-food restaurants, so your comparisons to McDonalds, Subway, & Tim Horton's are apples-to-oranges. They have different business models.

As for Diversified Restaurant Holding's future investment in the city, I applaud them for considering the idea and hope they see past *ahem* all of the negativity and come into the city.

I'm not interested in being a restauranteur because it's not my field, but I know people who run restaurants. Rents are typically higher for restaurants because of all the extra code issues the retail space has to conform to. So, $26 a foot is a fair price and I'm willing to bet they pay a lot more in any other city. Major franchises typically pay higher rents than fly-by-nighters anyway. If they think the non-fast food model won't work, perhaps the franchise owner should try a different model. And, I'll bet you that Hard Rock Cafe pays a lot more than $26 a foot. A properly marketed major franchise restaurant with confidence in their product, whether it's fast food or not, should make good money anywhere. If a company is not confident in the success of their product, they shouldn't even be responding to a reporter. They should just be answering, "No comment." If $26 a foot is a make or break, then they know their product sucks. I have never tried their product and never will after reading that article.

And whether it's fast food or not, it's a still a franchise restaurant and franchise restaurants work on a marketing model where the franchise owner pays a premium to be properly marketed so they have better sales. Downtown Windsor is very much like downtown Detroit. Over half the retail stores are vacant and for lease. I'd say office vacancy is more than half. Economy is almost as bad as downtown Detroit. Yet, the 10 year old McDonald's at Wyandotte and Goyeau in downtown Windsor was demolished a couple weeks ago and they paid a huge premium to see a new, bigger McDonald's which is almost completed on that same site in such a short time. Talk about having so much confidence in your product that you can demolish a 10 year old building and build new at an accelerated rate. Tim Horton's in downtown Windsor has a 15 minute lineup. Even the Keg, a higher end franchise where the cheaper dinner on the menu is $30 is fairly busy. Yet, some mom and pop type restaurants still go under.because they're poorly marketed. With restaurants, whether fast food or not, it's all about marketing.

If BW3 can't handle a measily $26 a foot, they shouldn't even be showing up to the game.

Thanks for playing.

[REL]

I'm not interested in being a restauranteur because it's not my field, but I know people who run restaurants. Rents are typically higher for restaurants because of all the extra code issues the retail space has to conform to. So, $26 a foot is a fair price and I'm willing to bet they pay a lot more in any other city. Major franchises typically pay higher rents than fly-by-nighters anyway. If they think the non-fast food model won't work, perhaps the franchise owner should try a different model. And, I'll bet you that Hard Rock Cafe pays a lot more than $26 a foot. A properly marketed major franchise restaurant with confidence in their product, whether it's fast food or not, should make good money anywhere. If a company is not confident in the success of their product, they shouldn't even be responding to a reporter. They should just be answering, "No comment." If $26 a foot is a make or break, then they know their product sucks. I have never tried their product and never will after reading that article.

And whether it's fast food or not, it's a still a franchise restaurant and franchise restaurants work on a marketing model where the franchise owner pays a premium to be properly marketed so they have better sales. Downtown Windsor is very much like downtown Detroit. Over half the retail stores are vacant and for lease. I'd say office vacancy is more than half. Economy is almost as bad as downtown Detroit. Yet, the 10 year old McDonald's at Wyandotte and Goyeau in downtown Windsor was demolished a couple weeks ago and they paid a huge premium to see a new, bigger McDonald's which is almost completed on that same site in such a short time. Talk about having so much confidence in your product that you can demolish a 10 year old building and build new at an accelerated rate. Tim Horton's in downtown Windsor has a 15 minute lineup. Even the Keg, a higher end franchise where the cheaper dinner on the menu is $30 is fairly busy. Yet, some mom and pop type restaurants still go under.because they're poorly marketed. With restaurants, whether fast food or not, it's all about marketing.

If BW3 can't handle a measily $26 a foot, they shouldn't even be showing up to the game.

Thanks for playing.

I know plenty of lawyers. Should I criticize someone trying to expand their law offices? I know plenty of doctors, too. Should I point out to them how to expand their practices? I know plenty of journalists as well, should I tell them what stories to write? So you know people who run restaurants, huh? Me, too. But forgive me, Dave, but I don't think that makes you qualified to be critical of someone's business plans in an industry that you have no first-hand knowledge of.

"If they think the non-fast food model won't work, perhaps the franchise owner should try a different model." They're not looking at a fast-food model, you were. They are trying a different model: their own.

"If a company is not confident in the success of their product, they shouldn't even be responding to a reporter. They should just be answering, "No comment." Actually, if you know anything about public relations, you would know that the worst comment anyone can ever make is "No comment". But then again, maybe you don't know anyone in PR, which would have made you an expert in the area...

"If $26 a foot is a make or break, then they know their product sucks. I have never tried their product and never will after reading that article." It's difficult for me to repond to this because it makes such little sense in the first place. If their product sucks, then how do they generate $20 million in sales a year? Apparently, a lot of other folks are willing to support their business. And you're turned off to their product because of their philosophy on dollars-per-sq foot?

Whaaah?

[iheartthed]

Who is trying to charge them $30 per sq foot to be in Detroit? Or was that quote just thrown into the story for fluff?

[davewindsor]

I know plenty of lawyers. Should I criticize someone trying to expand their law offices? I know plenty of doctors, too. Should I point out to them how to expand their practices? I know plenty of journalists as well, should I tell them what stories to write? So you know people who run restaurants, huh? Me, too. But forgive me, Dave, but I don't think that makes you qualified to be critical of someone's business plans in an industry that you have no first-hand knowledge of.

"If they think the non-fast food model won't work, perhaps the franchise owner should try a different model." They're not looking at a fast-food model, you were. They are trying a different model: their own.

"If a company is not confident in the success of their product, they shouldn't even be responding to a reporter. They should just be answering, "No comment." Actually, if you know anything about public relations, you would know that the worst comment anyone can ever make is "No comment". But then again, maybe you don't know anyone in PR, which would have made you an expert in the area...

"If $26 a foot is a make or break, then they know their product sucks. I have never tried their product and never will after reading that article." It's difficult for me to repond to this because it makes such little sense in the first place. If their product sucks, then how do they generate $20 million in sales a year? Apparently, a lot of other folks are willing to support their business. And you're turned off to their product because of their philosophy on dollars-per-sq foot?

Whaaah?

No comment means no comment. It can mean any number of things. You can't draw a conclusion from it because nothing factual was stated.

For a company that claims to have over 550 locations across the US, I don't think $26 a foot is a lot to ask to have a spot in the downtown area of a major city. I'm sure all the other major restaurant franchises in downtown pay a lot more than $26 a foot. To openly haggle over $26 a foot in a major city doesn't show a lot of confidence in their brand.

[Meddle]

I don't think $26 a foot is a lot to ask to have a spot in the downtown area of a major city.

To openly haggle over $26 a foot in a major city doesn't show a lot of confidence in their brand.

And there you have it. Too many people no longer consider Detroit a 'major city'.

[ghettopalmetto]

Who is charging $26/sf for retail space in downtown Detroit? Doesn't Class A office space currently lease for less than that?

[crawford]

And, I'll bet you that Hard Rock Cafe pays a lot more than $26 a foot.

And I'll bet you that you're completely wrong.

It's very well-known that both Hard Rock Cafe and the former Borders paid virtually nothing in rent at Compuware, because they were seen as lures for other tenants.

Common real estate practice, like with mall anchors, that often pay no rent [[yes, I'm serious!).

[bailey]

Who is charging $26/sf for retail space in downtown Detroit? Doesn't Class A office space currently lease for less than that?

The cost exceeding the acceptable rate was with regard to the condition of the property.

Ansley said the potential property has been let go for so long that it lacks the basic infrastructure needed to operate a business, namely plumbing and electricity.

I would guess that the 26+/sf would be inclusive of renovation costs the landlord wants to recoup from the lessee.

Sounds like BW3 is saying they're not going to do the heavy lifting. If the landlord wants it rented, it's going to be subsidized.

[davewindsor]

It's very well-known that both Hard Rock Cafe and the former Borders paid virtually nothing in rent at Compuware, because they were seen as lures for other tenants.

Show me where you got that information that Hard Rock Cafe pays virtually nothing in rent. I'd also like to know what percentage of gross revenues Compuware collects in lieu of fixed rent if that's the case [[a cut from the percentage of gross sales is common industry practice btw).

[kraig]

Davewindsor, put yourself into the shoes of an investor in Diversified Holdings. If you, as an investor, learn that the business is leasing property in Downtown Detroit at a higher lease rate than the businesses that you're competing against. And, your money could have been invested just as easy, if not easier, in a suburban location. And, you aren't going to be located adjacent to a free parking lot for your customers. And, you aren't going to receive the same level of municipal services that you would in a suburban location. And, you're going to pay higher insurance and tax costs. And, you're paying the higher lease rate in an area where two, not one, but two of your precious McDonald's restaurants, which, by the way, is the king of franchises could not sustain itself.

I suspect you would not be a happy camper.

P.S. Hard Rock Cafe isn't paying anywhere near $26.00 a square foot.