Wednesday, September 21, 2005

Ketchum restaurants follow patrons south

'Just the ebb and flow of doing business'

Express Staff Writer

Mama Inez & The Bank Bar in Bellevue moved from its Ketchum location. Manager Danette Fisher said business is going very well in the new venue. "A lot busier than up north." Photo by David N. Seelig

As evidence of their loyalty, many patrons of Chester & Jake's restaurant in Bellevue made the drive from Sun Valley just for a taste of Steve Hogan's specialty fish.

As a reward to the faithful, and at their request, Hogan opened a restaurant in Ketchum in late 2003.

"There was a niche open," Hogan said. "There weren't as many lunch options (in Ketchum), especially affordable ones. So, many people drove from Sun Valley in the summer (to the Bellevue restaurant) and begged us to open one (closer)."

Hogan figured if they could do the same amount of business in Ketchum as the Bellevue restaurant was doing, they'd be fine.

Things were great the first six months, but then the reality of his decision began to sink in.

"Once that initial enthusiasm wears off, you just become one of the number of places people go for lunch," he said. "We just got a little starry-eyed. We thought we could drop kick it."

Sixteen months after expanding, in January 2005, Hogan shuttered his north valley restaurant.

"Ketchum was just a really bad decision," he said.

The north valley restaurant scene is challenging many entrepreneurs, some of whom are pulling out and relocating to the south valley.

"It's definitely a trend that we're seeing, but not necessarily a huge one," said Carol Waller, executive director of the Sun Valley/Ketchum Chamber of Commerce. "(Businesses) depend on locals, and there are more full-time residents living south now than living in Ketchum. Because of the demographics, because of the affordability factor, there's a built-in demand (for restaurants) with more residents in the south. It's not a panic trend. Just the ebb and flow of doing business."

The city of Ketchum doesn't require business licenses—that plan is in the works—so the Chamber is the best way to gauge local changes in the industry.

"Most restaurants are members of the Chamber, so we hear when restaurants come and go," Waller said.

She said the reasons for restaurants opening, closing or relocating are varied.

""It depends on what type of business it is, what market segment they're appealing to," Waller said.

Hogan, like many other restaurant owners, cited changes in north valley demographics more than high rents or other concerns as cause for relocation.

He describes the Wood River Valley as a funnel that turns north in the morning as commuters pour into Ketchum for work.

"That funnel flips around at about 5 o'clock, and everyone heads south," he said. "We just didn't have any dinner business.

"We crunched the numbers every direction we could to try to make it work," he added. "You stand around waiting for seven months (during slack) hoping for five good ones. The fact of the matter is, there's so little business (in Ketchum) from mid-March to the Fourth of July, I might as well have been closed."

He was recently joined by Mark Fisher, who relocated Ketchum's Mama Inez restaurant to the historic Bellevue building formerly occupied by Glenn's Grocery on Main Street.

Mama Inez & The Bank bar has added another option to the south valley's growing scene.

"Business is going well," said manager Danette Fisher. "Very well. A lot busier than up north."

But the certainty of some business owners moving south is not matched by others, who are banking on the tourists' dollars that keep the north valley economy humming.

"The tourism trade is still in the North," Waller said.

Part-time Sun Valley resident and businessman Scott Featherstone is putting his money where tourists' mouths are.

He's planning to open a brew pub on the Ketchum Korral site, perhaps by October.

"For me it was obvious," he said. "There was a lack of brew pubs (in the Ketchum-Sun Valley area) and it's such a destination resort. People, including myself, would come up ... and there was no place to get a fresh brew."

Trail Creek Brewing Co. is set to open this week in Twin Falls, and the beer, along with other local brews, will be served at Trail Creek Pub in Ketchum.

Having two locations will help insulate him from fluctuations in the north valley tourism market, he said.

"We'll have a regional presence and be buffered economically by having two spots," he said. "There's a symbiotic relationship between the two cities. I think it'll help our business plan."

But he's also counting on Ketchum locals to enjoy and support his business.

"I'm excited as hell to be in Ketchum," he said. "Ketchum is my hometown ... and I like to stay up north. My vision is to have this for locals, as well as for tourists."

Other restaurateurs are hoping to tap into both markets.

Brian Kriesien, owner of Ketchum Burritos, opened a Hailey store a year and a half ago.

"The main reason I opened it is there's so many more full-time residents and families down here," he said. "I was looking to have more consistent business."

His Ketchum KB's still makes him money, he said, and he has no plans to close it.

"Coming out of summer, business was just fantastic," he said. "Obviously, it's dropped way off since the big (Labor Day) weekend. Lunch is very strong, but dinner is quieter."

There's a change afoot in Ketchum, he said. As dinner business is decreasing at his Ketchum venue, the Hailey outlet is experiencing a rise in evening activity.

"(Overall), it's been a very strong growth," he said.

Some business owners say the climate in the north valley is an increasingly difficult one in which to operate, and they have looked to the City Council to help protect their share of the shrinking market.

Hank Minor, of Apple's Bar and Grill, inadvertently set off a debate this summer when he approached the council about an ordinance amendment that would allow him to establish a seasonal food stall in the city's light industrial zone.

Ketchum's restaurant owners came out in force to oppose the measure, saying off-site vendors don't share the same load they do with regard to rents, snow removal and year-round wages for employees. With what they described as an unfair playing field, current bricks-and-mortar venues would be driven out of business.

One businessman parted from fellow restaurateurs in Ketchum over the proposed amendment.

"The changing business climate dictates your business model," said Ric Lum, owner of Ketchum's Buffalo Bites. That venue is classified as an off-site vendor stall but Lum said he hopes to operate it year round.

"Business is never static," he said. "The economy changes, there's more competition, so you have to deal with it."

He said the seasonal aspect makes it difficult to plan for, but locals still patronize restaurants during slack.

"Everyone's dividing that business up," he said.

Lum said encouraging a variety of businesses is essential.

"Someone doesn't open a new restaurant because they want to compete with their neighbor," he said. "They open one because they have a new idea, a vision, and the City Council should encourage that."

Lum doesn't discount the migration southward, however, and is planning to expand his Hailey-based catering business to include retail sales in the south valley.

"My gut feeling is there's a lot more full-time residents living in Hailey (than in Ketchum)," he said. "I think there are more people moving down here."

South valley residents could continue to see new restaurant options cropping up in their neighborhood, since their movements help shape their surroundings.

"It just depends on what happens with the residential population base," Waller said. "The same goes for retail. Tourism has peaks and valleys. Most businesses need to depend on locals."

Bellevue City Councilman Shaun Mahoney said the city is seeing development requests as more people, and businesses to serve them, move in.

He noted that five years ago, 90 percent of his friends lived in Ketchum. Now, 90 percent live in Hailey or Bellevue.

"That's not a trend," he said. "That's a tidal wave."

Mahoney also works for food distributor Sysco Food Services of Idaho, selling to restaurants, bars and hotels.

"The trends are that businesses are opening in Hailey and Bellevue, especially in the hospitality industry," he said. "It's moving along with the market (and) the market's moving south."

As further evidence of his belief in the south valley's strength, Mahoney and his two brothers have bought the Phoenix Bar & Grill in Bellevue and are looking at development opportunities.

As for Hogan, he's not ready to give up on Ketchum's dining scene, but neither is he ready to tackle that market again himself.

"The (entire) valley's in a big transition from what it used to be to what it's going to be," he said. "It's up to the cities to determine what they want to be."

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