Detroit blues dogging downtown operations

Nation's Restaurant News, Jan 13, 1992 by Carolyn Walkup

DETROIT -- Most downtown Detroit operators are struggling as the once-bustling Motor City continues to lose population, businesses and much-needed sales to the suburbs.

"Downtown is a disaster," said Chuck Muer, an industry veteran who opened his first restaurant here 27 years ago. At the time Detroit was the nation's fourth-largest convention center, he pointed out. Today, however, it has slipped to 28th.

In those days, Muer recalled, "the decision makers were downtown. Detroit had many good restaurants, and downtown was a dining destination. Now the deal makers are in the suburbs, and many of the fine restaurants are closed."

And time has indeed taken its toll on the city. Nearly 18,000 jobs were lost in the Detroit central business district alone between 1980 and 1990, according to the Southeast Michigan Council of Government.

Moreover, extensive media coverage of a series of carjackings, robberies, youth-gang disturbances and beatings during the summer has done further damage to downtown dinner business, operators said.

Two landmark fine-dining restaurants, the London Chop House and Pontchartrain Wine Cellars, closed last year, and others are operating under Chapter 11. Among the latter are the Caucus Club and the 1940 Chophouse. A bankruptcy sale of Jimmy's on Woodward is pending.

Joe Muer's while still busy and considered one of Detroit's finest restaurants, reported a decrease of 15 percent.

As a result, many operators planning new openings have opted for the more stable suburbs. Some of the latest launches include the Jimmy Schmidt-Michael Ilitch venture, Cocina del Sol in Southfield, Mich.; Common Grill in Chelsea, Mich.; Chez Pierre in Rochester, Mich.; and Tom's Steamer in Grosse Pointe Park, Mich.

However, not all Detroit restaurateurs are suffering. A handful of downtown operators, in fact, said they enjoyed sales increases in 1991. Fishbone's Rhythm Kitchen Cafe noted that sales were up 13 percent, Opus One reported a 15-percent upturn and the Rattlesnake Club saw sales climb 20 percent.

For the most part, though, those operations seem to be the exception. Greektown, a downtown entertainmetn district that has held its own in the past, also is starting to suffer. "Business is down," admitted Maria Gatzaros, co-owner of three downtown restaurants, "except at Fishbone's.

"People eat out a lot and want to have many, many choices," she surmised. "Downtown doesn't have too-many choices anymore."

Greektown's Acropolis restaurant closed recently, and neighboring restaurateur Demetrius Papatriantaflyllou of New Hellas predicted that increasing unemployment will decrease business for everyone.

Summer business fell 50 percent at New Hellas, according to the owner, and did not pick up significantly until near the Christmas holidays. "We don't need any more bad publicity," he explained.

Don Vargom who is owner of the 1940 Chophouse and filed for Chapter 11 bankruptcy protection in November, remarked: "Last year was one of the most difficult years I have encountered in 26 years. You have to give away everything to get people to come out."

Vargo has been discounting dinners to attract more customers, selling complete dinners of prime rib, steaks, lamb chops or fish for $10 to $11. "You have to be very aggressive with matching or beating anybody's price," he pointed out.

Low prices, however, are not the attraction at Opus One or the Rattlesnake Club. Dinner checks average $50 at Opus One, according to co-owner Jim Kokas, who added that customers who used to frequent some of the high-end downtown restaurants that have closed now come to his restaurant more often than previously.

The Rattlesnake Club's chef-owner Schmidt said his customers consider the $36 dinner check average a good value. A boost in private party sales there added a lot to the total sales of $4.3 million.

Of these successful downtown restaurants, Fishbone's with 1991 sales of $6 million, is the most casual and attracts the most diverse clientele. "It appeals to all people. People feel very comfortable," said Michael Bassel, general manager.

Checks average $8 for lunch and $15 for dinner in the high-energy, New Orleans-style restaurant that has a "let the good times roll" atmosphere. "It's a dining experience instead of just going out for dinner," Bassel said.

Those successes indicate that it's possible to make it in downtown Detroit despite the difficulties. According to observer Muer, these operators are succeeding "only because they are damn good."

His brother, Joe Muer, said an improving downtown business climate is needed to help the good operators overcome their many challenges. "In two more years we will have a new mayor," he explained, adding, "And things will get better."

Kokas also sees a brighter future for downtown. "I think in the next few years you will see the major southeastern Michigan corporate players make a move toward revitalizing the downtown," he remarked, naming two companies, Ford Parts & Service and Michigan Bell, that already have made commitments to relocate downtown from the suburbs.