Churn is nothing new in the food and beverage world – and it certainly isn’t new in the Flats. Ever since the wild and free heydays of the 1980s and ‘90s, the Flats have experienced more boom-and-bust eras than the housing markets. And, with recent news, it seems to be in the dip once more.
This week we learned that Inferno and Rum Runners, two popular Flats East Bank destinations, have closed for good. And then there was Margaritaville, which announced it was shutting down “for the winter season.” But that Jimmy Buffet-themed eatery will not, in fact, reopen, as confirmed to Scene by landlord Bobby George, who said a new tenant/partner operator will open in the space next year.
Facing another long, cold and bleak winter season on the shores of Lake Erie, many bar and restaurant owners opt to pull the plug at year’s end rather than face uncertainty ahead. This winter season brings harsher tidings than most.
The restaurant industry as a whole is going through some things, to put it glibly. Rising costs, labor challenges, fewer diners with disposable income, dwindling alcohol sales… Restaurant closures, as any reader can see, have been a sad and steady presence since 2020.
But there are other factors — public safety, crime, a tenant mix dominated by the hospitality industry, and real estate transfers after Scott Wolstein’s death — also at play in the Flats.
In September, the day of the Cleveland Browns’ home opener, there was a mass shooting outside the Play Bar and Grill, which led the Bibb administration to forcibly shutter the bar within hours of the incident. And a few weeks later, there was another shooting that left one dead and another seriously injured.
“For us personally, we’ve never seen the crime that we have in the last 90 days down there that we’ve seen in our nine years here,” says Rick Doody, who runs The Lakehouse restaurant in the Flats.
Doody says that business is down at The Lakehouse. Prior to the pandemic, $50,000 days were typical. This year’s average, he reports, is closer to $30,000. Losing money isn’t something with which Doody has much experience. The co-founder of Bravo and Brio restaurants currently operates Cedar Creek Grille, 17 River Grille, Bar Italia, Jojo’s Bar and Lola’s Bistro. The Lakehouse is an anomaly.
“We’ve been blessed,” he says. “Our restaurants are all doing great with the exception of that one.”
When it comes to Flats operators, Fabio Salerno is an old-timer. Lago was one of the first leases signed after the debut of the new Flats East Bank, opening in 2013 after seven successful years in Tremont. But the events of this past summer and fall have been a challenge for him and his wife Nicole, he says, with gameday business down 40 percent year over year.
“It’s been difficult, but we still have a really good customer base that comes down to Lago and Sora,” says Salerno, who worked down in the old Flats at such hallowed lubs as The Basement and Have a Nice Day Café. “But this past summer was difficult. And then to cap off the end of the summer with that horrific situation that happened. It really stopped the season. And we had five beautiful weeks after that.”
But Doody and Salerno don’t lay all the blame on the recent crime. While undeniably injurious to business, it is just one of several factors standing in the way of continued success in the Flats.
They and other stakeholders we spoke to point to an inflection point in 2023, when there was a “quiet handoff” of assets from Flats East Bank developer The Wolstein Group to Bobby George’s Ethos Hospitality Group. As part of the deal – rumored to have been valued at $17.5 million – George took ownership of the real estate that housed Doody’s Lakehouse as well as Alley Cat Oyster Bar, FWD Day + Nightclub, Margaritaville, Punch Bowl Social and the large central parking lot.
Doody says that under the leadership, guidance and enthusiasm of the late Scott Wolstein, the entire Flats community benefited. Under George, things are less organized and unified.
“They just don’t run the place,” Doody says of his new landlord. “He doesn’t think strategically about the whole picture. He thinks for himself. Everybody’s got their own goal.”
In years past, all of the Flats East Bank tenants benefited from community-wide events like concerts, art walks, sidewalk sales, and food festivals.
“The old people had a marketing director, they tried to do a lot of initiatives,” he adds.
Now, the streets need paving, there are non-stop traffic jams, it costs $50 to park your car, and the community-driven events meant to draw patrons to the neighborhood have disappeared.
“When Scott [Wolstein] passed away, you had a lot of cascading events that happened,” says Bobby Rutter, CEO of Forward Hospitality Group. “As opposed to there being one voice, one vision, now you have a lot of different dynamics going on. There was an immediate change from when Scott was there: it was his vision. This is what we’re doing, and this is how we’re doing it. That is typically what is needed to make those big developments successful.”
Rutter, who with his partner Michael Schwartz operates Good Night John Boy, Hi 5, I Hate Cowboys and Welcome to the Farm, has been in this industry long enough to differentiate long-term trends from short-term blips. Of course, crime and safety – and the perception thereof – are paramount, but there are also other, more consistent, obstacles hindering visits to the Flats that go beyond the Flats to the doors of City Hall.
“There needs to be actual action steps that cities like Nashville have put into place, and a voice that comes from the city that says, here’s what we’re doing to make sure this is safe,” Rutter says. “But not only safe; it also has to be easy,” he adds, citing hassles like traffic congestion, cost of parking and overall convenience. “You can’t have big barriers to entry. It has to be an easy thing, otherwise we’ll just go to our local bars and restaurants.”
City officials and local leaders are at least paying lip service to those concerns after a summer of violent incidents and recent closures.
Michael Deemer, CEO of Downtown Cleveland, Inc., told Fox 8 that while downtown sees a regular cycle of openings and closings, “the key to the health of the Flats in the future is to continue to make sure it is a safe and welcoming environment.”
The Bibb administration, which took swift if controversial action this summer in shuttering Play, said in a statement, “We look forward to engaging with key stakeholders to support revitalization efforts.”
Those revitalization efforts, Rutter and folks like him say, should also focus on diversity of product.
Why does every vacancy need to be filled with another bar, restaurant or massive “eatertainment” venue? Wouldn’t a wider mix of retail, professional services and niche types of businesses better serve the neighborhood?
“What I think needs to happen – with the significant amount of money that is at stake down there – is a reset of the tenant mix,” states Rutter.
And now is the time to do it, he adds.
“With Justin [Bibb] getting reelected, and the Browns deal solidified, and we know what Dan [Gilbert] is doing over on his block, now it’s how do we solidify the waterfront for the next 15 years. You need a co-tenancy mix that is going to be complementary to the whole development, not just food and beverage.”
That includes taking a good, hard look at wrong-sized spaces like Inferno, Margaritaville and Punch Bowl Social, each north of 25,000 square feet, to come up with a better plan.
“This is where the city and the landlords need get very creative,” Rutter says. “We don’t have an Apple store downtown. Architecture, law firms… ESPN Cleveland has some of the best studio space of anybody in their sector. It’s an example of how you have to get creative with that use and make it a more diverse development.”
Landlord, restaurateur and stakeholder Bobby George agrees, arguing that the recent closures prove that a more diversified tenant mix is needed, one that isn’t dominated by cavernous clubs.
“I think the closures are all positive,” he says. “I don’t own the middle building [where Inferno and Rum Rummers was], but those sites need to be activated with things other than bars. We need more restaurants and less bars. Sometimes you have to step back to go forward. The couple of places that have closed down in the past year, those are good things.”
And with respect to complaints by other operators that he isn’t capably filling the shoes of his predecessor, George accepts some responsibility, while offering some explanation.
“They’re right,” George says. “Scott was awesome. And it’s funny because even he got criticized. He had the benefit of owning everything — the hotel, the EY building, the middle apartment building. It’s easier when someone owns it all. I might be the largest owner, but I own the outparcels. But we’re working on getting back to where Scott had it plus some. I want to activate the boardwalk. I want to bring back Riverfest. That’s all wrapped up in the plan we’ll present to the city.”
That plan — like many of George’s plans — is big, bold and, as some operators in the Flats warned, possibly never to be fully realized.
“I’m working on a redevelopment to present to the city,” George says. “It’s a really cool concept that involves us bringing Cleveland’s first Ferris wheel to the waterfront, similar to what they have at Navy Pier, and activating the space. Imagine an indoor/outdoor food hall. Family-oriented with high-level eatertainment.”
“Right now the Flats is at a transition point,” he adds. “The message I’m going to send to the city is they can’t afford not to do the right thing. We want more police, better lighting, fix the traffic. In exchange, I’ll make an investment that could make the Flats the premiere entertainment district not only for adults but for families in Ohio. But it needs to be a public-private partnership. I don’t need their money. We just want safety, better police presence, and they need to work with us on the traffic. It’s a fucking nightmare.”
While concerns about safety and traffic are shared around the community, those other Flats operators point to ambitious pronouncements of George’s, such as his plan to turn the nearby Samsel property into “wellness hotel” and to build a proposed food hall along a new rooftop bar, as proof of his lack of follow through.
“It would be interesting to get all the things that he has announced over the years, that he said he was going to do,” says Doody. “None of it’s happened; it’s all bullshit.”
If there’s a through line in the commentary down on the East Bank amongst most operators, it’s a clarion call for cohesive action.
“I’ve seen the Flats struggle for decades,” Salerno says. “And I’ve seen the Flats climb back. But it’s not a problem that will just go away; it needs a bunch of different people working together, and we have to leave all these self-serving interests aside.”
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