Food-Doo Economics

Written by Mike Shoe2 Category: Valley News Issue: September 2013

After all, it’s common knowledge that the place is cursed.

In a little over five years, the 6,000-square-foot edifice of stacked stone and dark glass chewed through an astounding number of restaurant concepts seemingly poised for success: Mahogany Run, Gonzo’s All-American Grill, Heartthrob Music Café, Rock City Bar & Grill, and GrainBelt GrillHouse – a fact not lost on Craig DeMarco, a founding member of Postino’s Upwards Projects restaurant group. “It was a very hot topic,” DeMarco says. “Everyone told us it was cursed, it was jinxed. People were giving us advice involving swinging cats and burning incense.”

Ultimately, DeMarco determined that the trail of ruined eateries at the Gilbert location had less to do with Indian burial mounds and vengeful gypsy women than demographics, economics and timing – an elusive equation that has bedeviled other high-turnover spots throughout the Valley.   

Perhaps none of these troubled storefronts has toiled under a brighter spotlight than developer Fred Unger’s SouthBridge project along the south bank of the Arizona Canal in Old Town Scottsdale. Opened in 2007, the $41 million mixed-use development was to include a tight cluster of seven high-profile independent restaurants. As the national economy tanked, only four of the seven opened, and all – including the well-received Digestif – quickly closed. Replacements came and went, and none of the four current tenants has been in business longer than two years.

Not all cursed-location stories are recession-based. For sheer turnover volume, no local restaurant space is likely to match the legendary Hotel San Carlos in Downtown Phoenix. Opened in 1928, the former mecca for Hollywood stars and Valley elite alike has housed so many eateries that many have been lost to history. The list in just the past decade includes Prive, Steakhouse on Central, Copper Door, Via Roma, Silver Spoon Café, Ghost Lounge, and Bistro 202. A new concept, Bonjour Vietnam, was scheduled to launch in October. (As of mid-November, it was still sitting on the pad.)

Longtime Valley restaurateur Joe Johnston – whose Joe’s Real BBQ sits across the street from the new Postino – has a theory that such turnover-prone properties eventually suffer under the weight of their own histories. “I’m not a big believer in cursed locations,” Johnston says. “But I think by ‘cursed’ what people mean is they assume that whatever goes in here is going to fail. Unless whatever goes in there is a brand name, by the time you get through four or five reiterations, it’s almost a self-fulfilling prophecy.”

Enter Postino and its highly recognizable “brand name.” At Upwards Projects’ suggestion, the owner of the Gilbert building agreed to divide the space into two, with Postino taking 2,500 square feet. “What I think is the scale was wrong,” DeMarco says. “I think people are getting away from the big, huge dining experience.”

So far, he appears to be correct. Postino’s “cursed” location ranks No. 1 among Upwards Projects’ six restaurants in sales per square foot, and the group has leased the other 3,500 square feet for a fast-casual Mexican concept scheduled to open in March. Curse lifted?