Milwaukee’s restaurant churn

A cause for concern or an industry norm?

Hospitality Democracy opened Blue Bat Kitchen in April in the space that formerly housed the group’s restaurant Water Buffalo, which closed in January.

Last updated on July 3rd, 2019 at 07:22 pm

At the start of the year, Milwaukee’s restaurant scene took a hit – three big hits, actually.

In January, longtime French bistro Coquette Café in Milwaukee’s Historic Third Ward unexpectedly shut down after 20 years. The following month, popular farm-to-table restaurant Wolf Peach in Brewer’s Hill shut its doors. And a week later, chef Thomas Hauck announced he would soon close Walker’s Point’s c.1880, one of the city’s top fine dining restaurants.

Hospitality Democracy opened Blue Bat Kitchen in April in the space that formerly housed the group’s restaurant Water Buffalo, which closed in January.

Of course, each of these establishments closed for its own reasons, but when buzzwords like ‘market saturation’ and ‘restaurant bubble’ started to be tossed around, the sudden closures seemed less coincidental.

Simultaneously, a wave of new restaurants swept in, quickly occupying the high-demand spaces the shuttered restaurants had vacated.

Just three months after Wolf Peach closed, View MKE opened in its place, offering small plates, shareable platters and, true to its name, a view of downtown Milwaukee’s skyline. Coquette Cafe’s former site won’t be empty for long, either, as James Beard Award nominees Dan Jacobs and Dan Van Rite, owners of DanDan and EsterEv in the Third Ward, will soon open French-inspired restaurant Fauntleroy in its place.

At the root of this restaurant churn is the possibility of an abnormal trend. Does the number of restaurant openings and closings throughout the downtown area simply reflect the nature of the business, or are Milwaukee’s restaurant owners and operators currently navigating foreign territory?

Joe Sorge subscribes to the former. He is the co-founder of Milwaukee-based Hospitality Democracy, a restaurant group that operates seven downtown concepts. He and his wife, Angie, co-founded the group in 2000, and recently announced they will exit the business after 18 years to operate their new company, SideWork Hospitality Consulting.

Sorge believes downtown Milwaukee’s restaurant turnover rate is, in fact, normal – and a good thing for diners. He also thinks its supposed market oversaturation is illusory.

“There are new restaurants opening all over the metro Milwaukee area, especially in new pocket developments like The Mayfair Collection, 84South, Drexel Town Square and the like,” Sorge said. “In our view, it’s that growth that’s making it seem as if downtown is oversaturated. When in reality, it’s just that those that live in surrounding areas don’t have to make the trip downtown as often to enjoy their favorite locally-owned restaurants.”

Similarly, Jacobs said the number of closings and openings isn’t abnormal for the industry, but perhaps just new or unfamiliar to Milwaukee.

“We’ve had a large expansion of owner-operated restaurants in the last five years, and it just is what it is,” he said. “Old places are going to close, new places are going to open. I think it’s always going to happen, whether the market is saturated or not.”

Other local restaurateurs interpret Milwaukee’s restaurant boom in a different way. Omar Shaikh, co-owner and president of SURG Restaurant Group LLC, said the city’s lack of population growth is directly tied to the high turnover rate.

“There are a lot of amazing things happening in Milwaukee, but something that people don’t talk about is that there’s really not a lot of population growth, if any at all,” Shaikh said. “With the emergence of all these new restaurants opening, there’s going to be a shakedown because there’s only so many customers to go around.”

During an interview with Hauck about a month before he closed c.1880, he expressed a similar concern.

“There are more educated diners now and that’s always a good thing, but generally speaking, there are not more diners,” he said. “The pie is only so big, and you can only cut the pie in so many ways.”

Shaikh is also the board chair of VISIT Milwaukee, one of the groups pushing for the $247 million to $277 million project to expand the city’s convention center. He said the project would bring more visitors to Milwaukee and, in turn, boost its restaurant industry – among other sectors of its economy.

“More visitors will come in and spend money at the hotels, transportation and retail,” he said. “That’s why we really need to get (the project) done. I think it will help our industry tremendously and you won’t see as many restaurants closing.”

But in the meantime, Milwaukee’s longtime restaurateurs will attempt to stay relevant – and stay in business – by doing what got them there in the first place.

For Mike Engel, owner of French restaurant Pastiche in downtown Milwaukee and Brown Deer, that means staying the course.

“My area of interest is doing very traditional, very classical food that doesn’t change,” Engel said. “It’s not subject to the various winds that blow in one direction or another. Basic French food is what it has always been. That’s the basis of our restaurant – classics never go out of style. People are interested in the bright, new, shiny objects, but at the end of the day, they like that old pair of comfortable slippers.”

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Maredithe Meyer
Maredithe Meyer started as an intern reporter at BizTimes in summer 2015. She currently covers entertainment, sports, tourism and restaurants. In May 2017, she graduated with a journalism degree from Marquette University where she worked as an in-depth projects reporter for the Marquette Wire and Marquette Tribune.