Brian Boyce
The Tribune-Star
TERRE HAUTE —
The “For Sale” signs dotting Terre Haute streets aren’t just in front of houses these days.
Once known as homes away from home, the neighborhood pub seems to be taking a shellacking right alongside many other segments of the economy. And, as bartenders slash prices or just throw in the towel, most say it’s a sign of the times, hoping for better days in the future and perhaps heightened opportunity in the present.
In the meantime, Frank Perry, manager of Elks Club No. 86 on North 25th Street, agreed business isn’t quite like it was in the good ol’ days.
“It’s been real slow,” he said Thursday afternoon. It was still early, about 3:30 p.m., and the club was empty. The Elks formerly occupied the large country club property on Fort Harrison Road now owned by The Landing, but have been at the downsized location about 15 months. Sitting with bartender Joe Bukovack, Jr., who just recently sold his own bar and restaurant, Graffiti’s, at Eighth Avenue and North 13th Street, the two rattled off the names of several local clubs that recently have gone out of business.
Whereas a liquor license in Terre Haute once cost between $50,000 and $75,000, Bukovack said it’s hard to tell what kind of price one could negotiate considering how many are out there for sale.
But it’s not just the bar business, Perry said, pointing out the various industries cutting back as the worst economy in recent memory strangles people’s wallets.
According to StatsIndiana.com, Vigo County’s unemployment rate for June was 11.9 percent.
“It’s tough for everyone,” he said.
National losses
And it’s not just a dry spell in Terre Haute.
John Livengood, president of the Indiana Restaurant Association, cited a report published in the “Nation’s Restaurant News” which stated the number of U.S. restaurants has fallen 5,204 units — a 1-percent decline — since the spring of 2009. The report blamed lack of traffic for the loss.
The report goes on to state that “independent restaurants took the hardest hits, while chains kept their unit counts relatively stable.”
“I think every segment is down because of the economy,” Livengood said. “The chains have closed units too. Independents have a harder time for a variety of reasons.”
Smaller operators do not have the buying or advertising power of larger chain operators, he explained, adding they also lack support from a corporate office. And, in the last 40 years there have only been five years of negative growth and two of those five have been in the past two years. Yet, while the long-term trend in the industry has been toward bars and restaurants becoming more corporate, most of the businesses are still small independents, he said.
Reasons for the seasons
While the economy is certainly a factor, Perry and Bukovack were quick to point out that new laws don’t help the industry. The Elks Club used to have as many as 10 poker machines in its facility before the state cracked down and removed them. Revenue from those machines, he said, kept a lot of small bars and private clubs open.
“It’s tough to be a private club anymore,” he said, noting the increased competition and new laws allowing other venues to serve alcohol on Sundays.
Bukovack said when he bought Graffiti’s 15 years ago, it represented a great business. The seafood restaurant and its bar offered a good living and attracted oyster fans from neighboring towns. But first the poker machines were taken, and then smoking was banned. Higher gasoline costs reduced the out-of-town travelers and stiffer liability laws on drinking limits just put a nail in the coffin. The last three years he was open were tough, he said.
“I’m bartending here just for fun,” he said of helping out at the Elks.
And in the meantime, it’s a cheap time to drink. Perry pointed to the wall sign advertising $1 Budweisers and $1.75 screwdrivers. “That’s cheap,” he said.
Up the street at Sin City Saloon, Jim Cartwright agreed price is a weapon.
“We’ve lowered our prices,” Cartwright said, noting $2 drafts all week and $2 well drinks, both markedly cheaper than usual. “I think the economy’s horrible. I think it affects everybody.”
Sin City Saloon at Eighth Avenue and North 13th Street is in fact the former Graffiti’s, once owned by Bukovack. Cartwright said the saloon officially opened as the new entity in January. Wearing a cowboy hat behind the bar, he noted the saloon has a country theme but is in fact open to lots of genres. In addition to slashing drink prices, Sin City is offering live bands and no cover charge to help bring people through the doors.
Coming up with new attractions is a big component of the strategy, he said, optimistic that better days are coming soon.
“July is always one of the worst months for a bar anyway,” he said, predicting a turnaround once the economy improves.
The Upside
On that upside, it could be a great time to get into the business.
“As with most things, it’s still a buyer’s market,” said Oscar Sison, a Realtor with RE/MAX Real Estate Associates in Terre Haute.
Sison’s commercial listings include taverns, ranging from the former Grandma Joy’s and Hoosier Nightclub on Wabash Avenue to the former Past Time Tavern on Poplar. And while sales on taverns seem slow, the opportunity is there, he said.
“It’s the economy,” he said, adding he still gets a lot of calls from people interested in the taverns, the properties or even just the alcohol permits.
Two people who put that interest to work, recession or not, are Tim Drake and Mike Connolly, co-owners of Show-Me’s on South Third Street. Like Sin City Saloon, the two 25-year-old Terre Haute natives opened their franchise in January and said their business has been strong to date.
“It doesn’t hurt being the new kid in town,” Connolly said, adding a strong location and newer facility also help.
In line with the state and national statistics, Connolly said there is some advantage to being in a 20-year-old franchise.
“Obviously you have some buying power,” he said, adding corporate modeling and consultation as other benefits.
And then there are the $1 draft beers and nearly 50 flat screen televisions with MMA and other sporting events. Like other bars in town, Connolly said keeping the menu prices down has been part of the opening strategy. “We actually sell more food than alcohol,” he said, describing Show-Me’s as a sports bar and restaurant. But beers for $1 are definitely a draw, he agreed
The impact of a bad economy is tough to read on a new business as prior years aren’t available for comparison, Connolly said.
Still, where bars are up for sale, buyers have opportunities, and as Bukovack said, “people are always going to want to drink.”
Brian Boyce can be reached at 812-231-4253 or brian.boyce@tribstar.com.
