McMenamins: Prosperous times for company that turned a truck stop into profitable pubs

Nation's Restaurant News, Jan 28, 2002 by Shari Weiss

It seems to some people that the strategy shouldn't work, but it does -- buying properties scheduled for the wrecking ball and turning them into community centers featuring food, fun, friends and often a place to stay for the night.

Based in Portland, Ore, the McMenamins Co. has grown from a few pubs and fewer than 100 employees in the early 1980s to 52 properties, $60 million in annual sales and almost 1,500 full- and part-time employees throughout Oregon and Washington.

In-house, employees refer to the "McMenamins Empire," but what has evolved is a far cry from the original vision of turning one failing southeast Portland truck stop into a profitable pub.

Back in 1974, after graduating from Oregon State University with a degree in political science and experience as a football player and sandwich maker, Mike McMenamin thought he could have fun in running a business. So he bought the Produce Row Cafe, which had been famous for all-night, high-stakes poker games. The next year he and his brother Brian -- also an OSU grad and a recipient of a degree in business -- bought Bogart's Joint from pro wrestler Tough Tony Bome. Those acquisitions were the first of seven pubs bought and sold by 1980 as the brothers learned that running restaurants was hard work and not always profitable. But it was fun, and a lot of that fun came from the challenge.

By 1983 they had developed a prototype and tried it out in Portland's "hippy haven," a neighborhood along lower Hawthorne Street, at The Barley Mill Pub. It was famous for hosting an annual Grateful Dead anniversary party. Music began to form an essential ingredient in the McMenamin mix, and the brothers realized that their idea of what could be a fun-filled and profitable environment had no limits beyond what they could imagine. In 1985 they opened the first brew-pub in Oregon since Prohibition, the Hillsdale Brewery and Public House. Then in 1987 they converted the old 1890s-vintage Swedish Tabernacle in northwestern Portland into the state's first theater pub, called the Mission Theater and Pub.

"It's kind of like we are re-creating the wheel all the time," says company president Mike McMenamin. "Part of the fun here is that things are always changing, and we do lots of experimentation. Energy is a large part of this company, energy combined with imagination."

He explains that "our initial idea was to make our pubs into community centers, places for people in the neighborhood to gather and have a good time. Guests seem to like the way we've been able to roll history into most of our locations.

"We were a pub first of all, and having beer on tap inspired us to make our own. We'd been offering a lot of imported and specialty beers, which sometimes seemed to have lost flavor because they'd been sitting on a boat too long. Making our own beers seemed like a natural move since we had some home brewers already working in the company. Now we have a winery and a distillery, and we roast our own coffee beans as well."

The McMenamins have the ability to see things that no one else sees, according to John Foyston, who writes about craft brewing for the Oregonian newspaper. "This is the absolute ideal of a brilliant chain; on the one side you have an organization with many locations, but on the other is a group of unique properties," he says. "Every location is different and has a character all its own. This is an only-in-Oregon thing, a brilliant example of the way things are done here. It shouldn't work, but it does."

Foyston specifically points to the brothers' purchase of a 38-acre property in Troutdale, Ore., which had been built in 1911 as the county poor farm and had become the county white elephant scheduled for the wrecking ball in the late 1980s. With $500,000 to purchase the property and millions more to renovate it, the McMenamin brothers have created Edgefield, a European-style destination site featuring lodging, restaurants, specialty bars, a winery, a brewery, a distillery and a golf course -- as well as a position on the National Register of Historic Places.

The Edgefield locations are featured along with three other properties in one of the two "Cosmic Bus Tours" offered on a few Saturdays every month since last July. Lasting five to six hours, the "pub crawls" are led by a guide who is well versed in fun facts about spirits -- both the alcoholic variety and the ghosts that are said to inhabit many of the historic properties. In addition to the sightseeing and tall tales, tour takers are encouraged to wander around the properties and taste the beers and wines they produce. A second tour features the West Side and a stop at The Grand Lodge, a mid-19th-century roadhouse and fieldstone tavern set on 13 acres with nightly live music.

"You can't beat the ambience of a McMenamins," says local radio talk show host and KPAM production director Ralph Steadman, who first was introduced to the McMenamin flair at the Blue Moon Tavern & Grill in his northwest Portland neighborhood.

"They took an infamous biker bar and gentrified it, putting up Grateful Dead posters, original artwork, and playing lots of music," Steadman adds. "It wasn't just a bar, but it became a neighborhood gathering place. The brothers do what I call 'guerrilla restauranteering.' They find a site, see something there that most of us could never imagine, and then they stay on-site until they get it done. Detail-oriented doesn't begin to describe their talents. You could easily spend a day just looking at the artwork and furnishings at many of the McMenamin locations."