12/24/2012 8:27:00 AM Setting record straight on VOCA’s Redstone Restaurant
By Dave Benore President VOCA Board of Directors
Recently the restaurant at VOCA, Redstone, has been a topic of conversation in the Village. Some comments are not far off the mark but others are way off the mark. So let’s set the record straight.
VOCA has had a restaurant for a very long time. In 1998 it was small; mostly a snack bar operation, but it did serve sandwiches as well as snacks. A golf course must offer food of some kind but a snack bar would do. As early as 2000-2001 the VOCA Board decided that VOCA should offer amenities to their members in addition to golf, as everyone did not play the game. The question was what to offer that most people would use? So what do all people do? They eat. Eating is most frequently a social pastime as well as a necessity. Dining out with friends and neighbors also promotes community and ever widening circles of friends.
The Board decided that in the general renovation of what was frequently called the “clubhouse," they would make it more of a true community center. The new “community center” would offer more meeting rooms for use by clubs of various kinds, and more events that had nothing to do with golf. A full service restaurant would be the biggest change. It would be open to all, not just VOCA members. It could be a catalyst for developing friendships throughout the entire Village of Oak Creek.
Accordingly, the very major renovation of VOCA’s “clubhouse” into a “community center” included a full service restaurant. The renovation was completed in 2004 and the restaurant was leased out to a private operator, who named it “Mulligans”. Mulligans operated from mid-2004 to June 1 of 2011. It was received pretty well by most users and was even patronized at times by people from Sedona.
By 2011, the kitchen was getting very old. It had not been renovated in 2004 and needed it badly. Also Mulligans’ lease was up for renewal June first. Mulligans and VOCA negotiated for several months but could not come to an agreement on a new lease. So Mulligans closed on May 31, 2011.
Meanwhile, as negotiations were breaking down, VOCA looked for another party who would be interested in leasing the restaurant. (The condition of the kitchen did not help in that regard.) Everyone on the Board agreed a full service restaurant was very desirable. But the VOCA Board could not find any parties interested in leasing the restaurant in the condition it was in, so we decided to operate it ourselves. We hired experienced professionals to guide the development of a new restaurant, including the necessary renovations and improvements to the existing facility, and to manage it. The Board was shown data that indicated that a good restaurant should be able to make money for the Association.
The restaurant layout was planned to offer a lower level patio area, both inside and out, for casual dining by everyone, and an upper level for quieter and less casual dining. This level, “Redstone Grill”, was designed to be seen as a very nice restaurant. The construction and renovation work of the patio area and the kitchen was completed about October, 2011, and the restaurant opened its patio area as “Redstone Patio” in mid-November of 2011. The upper grill opened in early May of 2012 after its renovation was completed.
For the first 6 months the response was good. While there were occasional service complaints, revenues increased by about $10,000 per month each month from January through May of 2012. The restaurant staff worked to improve service but we were not as effective as we had desired. The turnover of the staff was large during this period and training was always an issue. Restaurant expenses were also too high for the revenue we were receiving and the staff worked to reduce them.
In June, revenues dropped and dropped again in July. July was down 37% from May. August and September revenues were up but not enough to match May’s revenues. In the meantime expenses were stubbornly refusing to go down enough.
In July the Board set a goal to achieve breakeven status by the end of October. That would require major reductions in expenses, increases in revenue, or both. If that was not achieved, then the whole plan of self management was in serious jeopardy. In early November when the October financials became known, the restaurant had not achieved breakeven—not even close.
Bases on this data the Board decided to seek an experienced and successful outside operator to take over restaurant operations and end financial losses to VOCA.
In reviewing all that has taken place concerning the restaurant, my opinion is that the construction and renovation was necessary for any restaurant to function. The money spent in that endeavor was well spent.
The money spent in opening and operating the restaurant for the first 3 months was to be expected. New restaurants that open are not expected to achieve profitability until about 12-18 months of operation. Even so, operating expenses after 3 months was too high.
In hindsight, we lacked the management expertise to profitably operate the restaurant ourselves. Recognition of that is what led the Board to look for an experienced and successful outside operator. We all want the restaurant to be successful and be a place where all can come to dine and enjoy each others company.