How does a thriving (and throbbing) business like Martini Park go from posting sales of close to $6.5 million in 2007 to closed in less than one year? According to one former employee the answer is: “They opened in Plano.”
There is a city ordinance in Plano stating you can’t operate a business that generates more than 50 percent of its revenue from alcohol sales. Six months after Martini Park opened in December 2006, the management crunched the numbers and realized 92 percent of their net sales came from booze. While the TABC was happy to take their 14 percent, according to my source inside of the MP staff, the City of Plano was not happy and shut them down. It’s a long juicy story. Jump for the Cliffs Notes and a significant updates.
According to a former employee, The Barish Group, led by Chris Barish, didn’t do enough homework before they settled on The Shops at Legacy. They searched the country for their highly defined demographic: an area with high incomes and a high divorce rate. When the Barish Group peeps walked through the Shops at Legacy they were dazzled by the amount of fancy foot traffic and the lack of an upscale singles bar for adults, specifically females, to mingle. “Hey, we were all about making the cougars feel safe,” said one former employee. “It was a great place for them to get drunk and if they ended up making out with a 22-year old guy, then so what. It made for a great girl’s night out.”
That could be the understatement of the century–those girl’s nights out added up to huge numbers. In January and February 2007, Martini Park reported weekly sales that looked like the months-even years-of almost every other spot in Dallas. “In three weeks of February 2007, we did $160,000, $146,000, and $145,000,” said the former employee. At that time only Ghostbar, which is in Dallas, sold more booze and Martini Park, in Plano, ranked number 10 in the state under the “Bar Type Establishments” in the monthly Texas Bar & Restaurant Report.
To keep their liquor license and the City of Plano happy, Martini Park management had to rework their percentages. They started serving food and ringing up sales differently. “We had to create lunch and dinner and starting passing complimentary skewers of fruit and cheese,” said the employee. “That enabled us to re-allocate and ring up each sale like a combo meal.” That worked until the TABC saw the taxable revenues decrease. According to my copy of the Texas Bar & Restaurant Report, Martini Park posted $476,169 in sales for July 2008 and $174,012 in August 2008.
The handwriting was on the bar room wall–management “figured” there was no way they were going to make the 50/50 split and get their liquor license renewed in September 2008. According to my source, the TABC didn’t want to shut them down but, after an extension and a hearing with the City of Plano, the city ordinance of Plano trumped Martini Park’s best attempt to become a restaurant. “We couldn’t handle the extra labor costs and turn it around,” said the former employee.
So, here’s my question: how does a company come into a market like Plano, where there has never been a thriving bar scene for the obvious reason that there is a city ordinance on the books that prevents one, and proceed to throw down millions of dollars on a great concept and end up running out of town with all but the kitchen sink in their moving trucks? “They didn’t do their research,” said the employee. “It’s New York ownership and to them it looked like a great spot but they didn’t look at the legal side. They should have never opened in Plano.”
UPDATE: Oh, the plot thickens. Just off the phone with the other side. Plano city leaders were “caught off guard” by the closing of Martini Park. After talking to one city official, it sounds like they did not want to shutter the spot: “we want that revenue and are doing everything we can to keep it.” (Yesterday the whole city staff was in a day-long budget meeting.) Anywhoo, from what I hear, the forces in Plano are in the process of working on a new ordinance to allow bars to sell as much booze as they want to sell. And the new rule is not that far from being reality. So, did Martini Park know about the new ordinance? Did Martini Park really know what time it is? Did the money making machine behind Martini Park really care about getting cleared for profit take off? Methinks there is a lot more going on behind the scenes. Like too many managers and not enough money management talent? Or, were they quagmired in a bad business deal and need an easy out. I’m on it. Stay tuned, as the martini turns
UPDATED UPDATE: After much digging, I have come to the conclusion that the City of Plano is not directly responsible for the sudden death of Martini Park. This morning I learned that a change in the current ordinance requiring a 50/50 alcohol/food sales ratio is going before the Planning and Zoning Committee on December 15. The ordinance will then be presented to the Plano City Council on January 12 for approval. One member of that council told me, “Oh, it will get passed.”
I’ve also learned that when Martini Park had trouble getting their liquor license renewed in September 2007, they entered into an agreement with Culinaire International, the Dallas-based company that “operates nationwide in the hospitality industry, specializing in hotels, cultural centers, private clubs, entertainment arenas, venues for public assembly, zoos, off-premise catering, and freestanding restaurants.” Whew. One of Culinaire’s clients happens to be Nicola’s which is located across the street from Martini Park. And like a good neighbor and consulting firm, according to my source, Culinaire took over some of the management tasks at Martini Park and got them a new liquor license. Things went swimmingly until the 3rd quarter of 2008 when, as any restaurateur/bar owner will tell you about 3rd quarters, business slowed down.
My semi-educated guess is that when Martini Park hit the third quarter slowdown, they couldn’t balance the budget that was dwindling from slow sales, a sluggish economy, and management fees to Culinaire. Plus, their TABC license renewal was coming up in September 2008 and the reality of it getting renewed was dim. That’s the nice way to look at this mess—you could also wonder just how those ginormous revenues were handled by the corporate money managers. If a business makes a lot of money it certainly doesn’t mean they are always going to be profitable. I mean, sometimes the inmates do run the asylums.