It was surprising to hear the recent announcement that Bartolotta Restaurant Group will end its partnership with Phoenix Hospitality Group for four restaurants at The Mayfair Collection development in Wauwatosa. The first of those restaurants, Osgood’s, opened less than two years ago.
Evidently those restaurants have not met expectations, and the arrangement between Bartolotta and Phoenix has not worked out as hoped; otherwise, Bartolotta wouldn’t be pulling out so soon. Bartolotta is the premier restaurant group in the Milwaukee area and it has approximately a dozen other establishments. From Bartolotta’s perspective, there is no reason to carry around underperforming restaurants. Better to cut bait and move on.
The move raises an interesting question. After several years of a boom of new restaurants in the Milwaukee area, is the market now oversaturated? Mayfair Collection itself has nine restaurants. Several new restaurants have opened in the area in recent years, and a slew of additional new restaurants are on the way.
Of course, restaurants are opening and closing all the time, but there have been some notable closures of late: Karl Ratzsch in downtown Milwaukee, Weissgerber’s Gasthaus in Waukesha, Hinterland Erie Street Gastropub in the Third Ward, and Cempazuchi and Mimma’s Cafe, both on Brady Street. In a region with modest population and job growth, there is only so much we can eat. With so many new restaurants in the area, more closures could be ahead.
Speaking of closures, Associated Banc-Corp recently revealed that 36 bank branches will be closed and their operations consolidated with nearby branches in its acquisition of Bank Mutual Corp. The companies plan to close 28 Bank Mutual branches and eight Associated Bank branches around the state, including 15 branches in southeastern Wisconsin.
Brick-and-mortar branches are becoming a smaller part of the banking business. So who is going to make use of the 15 vacated branch buildings? It is going to be hard to find banks to absorb all of them. Restaurants are another option but, again, how many more of them can the market support?
Another sector showing signs of oversupply in the area: hotels. Several new hotels have been built in recent years downtown and in the suburbs, and more are under construction or being planned. Occupancy rates have dipped this year. The market would benefit from some older hotels being converted to other uses.
Case in point, the Park East Hotel near downtown Milwaukee was recently sold to developers who plan to convert it into an apartment building. That change should benefit the other hotels downtown, which will absorb the demand that will no longer be met at the Park East Hotel.
But apartments are another sector that has been built up in recent years, especially downtown. Two of the area’s largest multi-family apartment developers have indicated they are tapping the brakes on additional downtown projects, for now. It will be interesting to see how the Park East Hotel conversion and other projects fare.
