Cities that Sizzle

Nation's Restaurant News, Jan, 2001

Allanta

Southern hospitality is on the rise as the city's economic health, customer growth burn bright

Jack Hayes

A second Maggiano's Little Italy opened near Perimeter Mall in suburban Dunwoody here last spring, only two and a half years after the chain's extravagant and highly successful debut in Buckhead in mid-1997. Local observers then began to wonder if the market hadn't reached a new saturation point for restaurant seats.

Yet within a matter of weeks The Cheesecake Factory, which was already operating a $10 million unit in the heart of Buckhead, also premiered its second Atlanta location, likewise in Dunwoody. It added to the avalanche of development that has roared through the city in the wake of a brief post-Olympic restaurant shakeout.

"We've far exceeded our expectations at this unit," says Tim Creedon, assistant general manager at the new Cheesecake location. "One reason is the number of people in this area who prefer to dine locally. Still, our Buckhead restaurant is continuing to run at capacity."

Creedon went on to confirm reports that the Calabasas, Calif.-based Cheesecake group intends to have a third Atlanta unit up and running by the middle of next year.

Indeed, many veterans here see wisdom in that decision, arguing that Atlanta's economic health, its golf- and tennis-friendly climate and its attractive cost-of-living index position the city for exceptional customer growth.

While Atlanta's population continues to outpace the national growth rate, its job expansion and disposable income levels also exceed the national average. At the same time the cost of living remains at one of the most competitive levels for a major city.

Furthermore, the city is a business, tourism and convention mecca. In 1999 the metro area drew more than 17 million visitors who spent nearly $10 billion -- $2.3 billion of that on food and beverage. Fulton County alone had 7.125 million overnight visitors who spent $1.1 billion on food and beverage in 1999.

"It's a great town for eating out," says Tom Catherall, chef-owner of the five-unit Here to Serve Restaurant Group. Last spring Catherall opened a 300-seat seafood bistro called Goldfish in the same suburban complex that Maggiano's and Cheesecake chose for their second Atlanta units.

This month Catherall will convert Indigo Coastal Grill in Atlanta's North Highland neighborhood -- a unit he bought approximately two years ago -- as an "urban cowboy"-themed neighborhood steak and barbecue eatery called Star.

"What happens is the people moving here from California, New York and the Midwest find it's cheaper to live, so they have more money to spend dining out -- and they do spend it," Catherall adds.

Lloyd Webre, president and chief executive of the Georgia Hospitality & Travel Association, agrees with Catherall's cost-of-living analysis as a key driver of Atlanta's healthy restaurant scene.

"Attractive cost of living and above-average disposable income -- these two factors bode well for Atlanta's restaurants," Webre says. "We're looking forward to a good 2001 and beyond."

Even if, as predicted, the local high-technology sector begins to slow somewhat in 2001, Atlanta's economy is diversified enough to absorb whatever moderate changes that may bring about, he adds.

"The only detriment we're hearing about is that local industry is having difficulty attracting staffers," Webre says. "We're hearing that operators have had to delay openings because they can't find the people."

But Atlanta's labor problem, which is afflicting cities large and small alike throughout the region and indeed across the entire nation, is not seen as serious enough to jeopardize the ongoing restaurant expansion.

"Atlanta is the center of the Southeast and should be the landing place for any national chain that hopes to be expanding into the region," says Larry Mindel, chairman of Corte Madera, Calif.-based II Fornaio [America] Corp. The company debuted its first II Fornaio restaurant-bakery here a few months before the Maggiano's and Cheesecake expansion.

And even if Phoenix-based P.F. Chang's China Bistro didn't heed Mindel's suggestion -- choosing Charlotte, N.C., instead for its recent Southeastern debut -- the aggressive chain has hop-scotched boldly into Atlanta since then, opening not one but three restaurants within a 24-month period.

Greensboro, N.C.-based restaurant developer Marty Kotis, a principal in Kotis Properties and president of the Council of International Restaurant Brokers, acknowledges Atlanta's presence in the "climate, cost of living and quality of life" appeal that is drawing individuals as well as businesses to all corners of the Southeast.

"If you're looking for that important quality of life comfort, you have choices in smaller markets all over the region," Kotis says. "But if you want the big-city experience to go with it, then you'll probably wind up in Atlanta or in a city not too many years behind it, something like Charlotte or Nashville,"

Although declining to venture a launch date for his group's second location, Mindel says the Il Fornaio development team is scouting sites in Atlanta's booming northern suburbs.