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Recession Decimating Businesses

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By KEVIN WIATROWSKI

kwiatrowski@tampatrib.com

Published: March 8, 2009

WESLEY CHAPEL - One by one on a recent Saturday, cars entered the empty parking lot and slowly circled Buffalo's Southwest Cafe. Eventually, the drivers noticed the printed sign taped to the front door before driving away:

"We may reopen in the future."

It's more a hope than a plan at the moment, said Kevin Kingry, vice president of the Marietta, Ga., restaurant chain.

"It's something I thought was going to happen," Kingry said last week. "I still have some prospects."

About 18 months after it opened at County Road 54 and Old Pasco Road, the popular restaurant closed earlier this year. It joins a growing number of businesses shutting their doors in the face of the national economic downturn.

In recent months, Village Inn in Trinity has closed its doors. So has Cork and Olive, a wine store chain with outlets across the Tampa Bay area that's now being liquidated in bankruptcy court.

This is a hard time for restaurants and other food-related businesses, said Chris Muller, director of the Center for Multi-Unit Restaurant Management at the University of Central Florida in Orlando.

"The restaurant business, in general, is very sensitive to changes in the market," Muller said.

The number of business licenses in Pasco County has been steadily falling since peaking in the 2006-07 budget year.

What began as a slow decline in 2007 and 2008 has turned into a freefall this year. As of late February, more than 3,000 businesses had dropped off the books in Pasco compared with the previous year, according to the county Tax Collector's Office.

Although construction-related businesses continue to take the biggest hits economically, the number of licensed restaurants and restaurant suppliers fell 10 percent over the last year, records show.

The closing of Buffalo's Southwest Cafe left Marion Szurek's Rotary Club chapter without a regular meeting place.

"They really took great care of us," Szurek said. "We haven't found a permanent new home yet. Wesley Chapel doesn't have the amount of areas where there are meeting spaces with food."

Buffalo's Southwest franchisee Teodulo Mationg of Hudson closed his restaurant's doors despite what Kingry described as above-average or average sales.

Sales couldn't keep up with the massive amount of debt Mationg took on when he opened the restaurant, Kingry said.

"The property was very expensive," Kingry said.

Mationg did not return a call for comment.

Higher-than-normal overhead costs became typical among restaurant owners over the past decade, mostly because of rising real estate costs. That's left many business owners with a lot of debt and thinner profits, as people have been cutting back on dinners out.

Mationg took out more than $3 million in mortgages on the property near the entrance to the Lexington Oaks subdivision in 2006 and 2007, according to county records. The empty lot sold for $914,000, property records show.

As of Feb. 14, the entire property now has an estimated market value of $1.5 million, according to the Property Appraiser's Office.

"When he bought that property, Florida was in full stride," Kingry said. "My best-performing market was Florida, so we were really excited to go in there."

The economic downturn has knocked the legs out from under Buffalo's Florida ventures from Coral Springs to Clermont, Kingry said.

Kingry said he remains hopeful of finding an experienced restaurateur to take over the Wesley Chapel operation.

"The growth in Wesley Chapel is what we're looking for," he said.

Anyone who takes up Kingry's offer might want to reconsider what has become the usual business model, though, Muller said. He recommends looking to old mom-and-pop businesses for guidance, starting with simplifying finances and closing one day a week.

"Go back to the cigar-box model," Muller said. "Stop using credit. It's all about controlling your expenses."

Reporter Kevin Wiatrowski can be reached at (813) 948-4201.

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