Food service businesses are exploring new revenue streams that may have been an afterthought before the current pandemic.
Written by Edward Smith
When demand prompted Tioga-Sequoia Brewing Co. to debut its beer garden in 2014, it did so virtually isolated from the rest of the city. It was turnout at events such as FresYes Fest that justified the risk to invest in Downtown Fresno.
But president of Tioga-Sequoia Michael Cruz hopes the draw for what some have dubbed the Brewery District goes beyond events to something more sustainable for long-term growth.
When a craft cocktail lounge won the Downtown Fresno Partnership’s Create Here competition Oct. 1, it meant one more piece of a puzzle filled for the area on Fulton Street between Inyo and Ventura avenues.
Startup businesses don’t often have the cash to bring decades-old buildings up to code, where they can safely bring in customers. Without the population and demographics of north Fresno, completing tenant improvements can leave property owners and tenants negotiating who takes the risk.
For property-owner Nora Monaco and her family, securing The Modernist bar as well as 411 Broadway Ales & Spirits meant bringing to fruition an investment to transform warehouses into retail space.
Before becoming prime Brewery District real estate, the buildings at 721 Fulton Street had been used for storage. When Monaco and her family purchased the suite of buildings in 2004, the previous owners had the windows boarded up to give the tenants privacy. At one point, one of the former tenants was storing millions of dollars worth of vintage cars and auto parts, she said.
“No one would have guessed based on how it looked,” Monaco said.
The same went for Tioga-Sequoia. The original location at 746 Broadway Ave. was nothing more than a building along an alleyway. It was in 2012 when they decided to make the move to Fulton Street. The 30,000-square-foot space was used storage when Monaco leased the building to Cruz and his cohort of brewers.
“We tested the waters and knew there was a draw for people to come downtown,” Cruz said. Almost 3,000 people at the first FresYes Fest in 2013 proved they could bring in the crowds.
But transforming the space meant retrofitting for seismic standards, upgrading restrooms, installing fire sprinklers — work that to date has cost Tioga-Sequoia nearly $250,000, Cruz said.
“We’re committed to being here,” he said.
Storage to destination
Tioga proved that the model could work. In 2017, the last of the storage tenants moved out of the buildings housing Modernist and 411. She turned down offers from prospective tenants wanting storage space.
“No,” Monaco said. “It’s time to open this place up and let some light into it.”
She and her family did tenant improvements over the two years the space was vacant, fixing broken glass, making it retail-ready.
“Nora’s approach has been to be proactive about fixing up her buildings and then marketing the spaces to prospective tenants,” said Dan Zack, assistant director of the Development & Resource Management Department for the City of Fresno. “It sure seems to be a winning strategy. It requires some upfront investment, but it will pay off quickly.”
The three spaces along Fulton Street are all occupied, but she still has 17,000 square feet unleased.
“My hope for at least 6,000 square feet of it is a bar, restaurant, food — we need food down here,” said Monaco. “This really is the Brewery District, so we want tenants that complement. By them being here, it helps everybody else be successful”
Getting the entertainment/brewery district established comes not a moment too soon. Sustained growth hinges on a successful entertainment and brewery district, Cruz said.
“We are very active in the events we do, and we don’t want to have to do an event every day just to be thriving and have a decent amount of people downtown,” he said.
People are shocked at the crowds Tioga can pull in downtown on a weeknight, Cruz said. Other businesses have come to look at the brewery as an anchor, bringing in foot traffic. But Cruz fears it can’t last forever.
“What lasts longer is communities that have multiple reasons for people to come downtown and multiple points of interest,” he said. Those attractions have to go beyond merely breweries, he added.
Downtown’s success relies on either increasing residency or creating entertainment, and one brings the other. And with prices downtown surpassing $2 per square foot — comparable to other Fresno submarkets — it’s hard to justify locating downtown over other areas of town with proven foot traffic and affluence.
“It’s the businesses who are the ones right now that are doing the risk-taking and creating something unique,” Cruz said. “I think we’ve done that fairly well, but it’s only going to last for so long.”