Insurance and Government and Small Business

TOM HARTON Commentary: Business in a hole climbs out

December 4, 2006

Everyone says owning a restaurant is hard work. But for Tracy Robertson, not owning one has been much harder.

Robertson's restaurant, the 745 Bar & Grill, hasn't served a burger or a beer since the afternoon of Jan. 25, 2005. That's when the 745 literally fell into a hole. A cook, a bartender and five patrons escaped just moments before the restaurant collapsed into the excavation pit for what is now the 757 Mass Ave condominium building.

In an instant, Robertson's work life got an involuntary makeover. No more worrying about a malfunctioning fryer. No more jumping in to wait tables when a big lunch crowd overwhelmed the staff. Goodbye to all the daily hassles-and joys-of owning a small business.

Hello to the whys and wherefores of fractured foundations. Hello to heartache-worrying about what would happen to the seven employees she could no longer pay-and to the headache of wrangling red tape on a daily basis.

But those days are almost behind her. After two years, one baby and too many hours spent with lawyers, accountants and insurance folks, Robertson is counting the days until the 745 reopens in January. That may happen on the second anniversary of the collapse. (She and her husband "celebrated" the first anniversary with the birth of their first child.)

Regardless of the date, what matters is that Robertson, 34, got to this point, why she fought to reopen in a badly damaged building she doesn't own, and why, much to her dismay, the lessons she's learned might come in handy again soon. (More about that later.)

The accepted rule of thumb in the industry is that only one in 10 independent restaurants survives its first year. Others say it's not quite that grim, that only one in four fails. But any way you slice it, owning a restaurant is a tricky proposition.

Among the biggest challenges, Robertson says, are finding the right location and hiring and keeping a competent staff. So it's no coincidence that the 745 is reopening in the same spot and with at least two of its old staff, both of whom are quitting other jobs to return. Robertson is busy chasing down leads on other prospective employees.

"You can't just hire warm bodies," she says.

And you can't just open up anywhere and make it work-a concept that insurers don't always understand.

Robertson and a partner in the business could've taken their liquor license elsewhere and tried starting from scratch, something their business-interruption insurance carrier would've preferred. But she didn't want to become another restaurant-failure statistic. With three prosperous years under her belt in the 700 block of Mass Ave, she had no interest in testing a new location.

"I loved my business, the neighborhood and what I do. It was my mission to get back there," Robertson says.

The trade-off was continuing to operate out of a building she doesn't own. That meant she could only offer encouragement while her landlord tried to scrape together enough settlement money to rebuild the back of his building.

Now that the project is almost complete, Robertson can look back on what she did right and what she did wrong.

Even though "everything takes four times longer than you think," she believes negotiating the red tape would've taken even longer absent the detailed business records she kept. Most of the daily sales records were destroyed in the collapse, but everything was backed up off site so it could be easily reproduced.

As for missteps, Robertson says a letter to the Internal Revenue Service wasn't adequate to fend off the agency until there was once again income to report. She says it's important to continue filing returns even if nothing is owed to avoid the lengthy process of getting back in the good graces of the IRS.

Robertson's biggest regret is that she didn't seek out an independent party-possibly a government agency with enforcement power-to inspect the work of the contractor whose job it was to shore up the foundation of the 94-yearold building while the excavation proceeded next door.

There were reasons for concern. The 745 had lost power a couple of times, the building façade had cracked, and a hole was punched in a basement wall, but the team in charge of avoiding damage to the structure-some of whom ate lunch at her place regularly-always reassured her.

Next time, she'll know better.

That there could actually be a next time isn't as remote as it might seem.

Her husband, Stuart, owns Macnivens Restaurant at 339 Massachusetts Ave. If all goes as planned, bulldozers will show up next spring to begin digging a massive hole right next door-the site of Three Mass Ave, a 10-story, 46-unit condominium and retail project.

The Robertsons are concerned, but they're confident this dig will go better than the first. The couple and their patrons at both ends of Mass Ave will be sure to hoist a glass if it does.



Harton is editor of IBJ. His column appears monthly. To comment on this column, send e-mail to tharton@ibj.com.
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