Wins, losses in Atlanta restaurant biz

2/24/2011 - NBA Zaza Pachulia Atlanta Hawks + more

Whenever an athlete opens a restaurant it seems that their fans rejoice -- and the athlete's accountants and financial planners cringe. While the restaurant business doesn't guarantee monetary gain, it does offer the kind of competitive environment in which so many athletes thrive. Zaza Pachulia went against the advice of friends and industry contacts to be a part of it.

The Atlanta Hawks center and native of the country Georgia, currently in his eighth NBA season, is co-owner of Buckhead Bottle Bar in the Buckhead neighborhood of Atlanta. Yet it's his experience with a failed restaurant venture in another part of the the ATL that has enlightened him to the cutthroat realities of the restaurant industry.

A 2007 study by the U.S. Bureau of Labor Statistics estimated that 60 percent of restaurants close within their first year. Pachulia likely had a cushion even after his first investment, considering he had earned roughly $15 million in the NBA by the time he opened his first venture. (Pachulia will have earned approximately $26 million in his career when his $4.2 million salary this season is included.)

For Pachulia, 27, the allure of owning a restaurant wasn't just to engage his competitiveness. He wanted an eatery where he could relax and enjoy the surroundings, much like in his experiences at Spanish cafes, French bistros and other gastronomic establishments throughout his European travels. Friends in the restaurant business advised him to think twice about investing his money, but Pachulia forged ahead with his plan by buying the Mediterranean-influenced ENO in late 2009.

"I still wanted it," Pachulia said. "I believed in myself and I believed in this project."

A name change to ENO by Zaza didn't help resuscitate the lagging restaurant, which was located on famous Peachtree Street in midtown Atlanta. High rent, kitchen labor and food and beverage inventory were cited by Pachulia as notable factors in the restaurant's struggles.

Business still wasn't satisfactory by the summer of 2010, when Pachulia and his partners -- Atlanta restaurateur A.D. Allushi and chef Ian Winslade -- decided to reconstruct the restaurant's concept. The fine dining experience of ENO by Zaza gave way to a bistro called Fifth Street Cafe. (The venue still had a Peachtree Street address.)

This change came in concert with Pachulia, Allushi and Winslade opening a second establishment in June -- Buckhead Bottle Bar. Buckhead, home to the Governor's Mansion, is one of Atlanta's most prestigious neighborhoods. Forbes named it the ninth-wealthiest U.S. zip code in 2004.

Yet the neighborhood didn't have many dining or retail options. In the mid-2000s, Atlanta developer Ben Carter planned a $1.5 billion project called Streets of Buckhead that would turn the nightclub-ensconced area into a high-end retail and cultural destination.

"It's going to be a small version of Rodeo Drive," Pachulia said, referring to the luxurious street in Los Angeles. "Bottle Bar is right next to it." Carter's plans have since been stymied because of the struggling U.S. real estate market; Pachulia said Bottle Bar is still going strong.

Pachulia and Allushi, 32, wanted Bottle Bar to represent an atmosphere distinct to Atlanta. "We wanted to do something different than in Miami, New York or L.A. … where music and dining are connected to each other," Pachulia explained.

Allushi, who became friends with Pachulia in 2006 after they hung out in the same social scene in Atlanta and Miami, had been eyeing Bottle Bar's location for three years. When he finally agreed to a lease with the landlord, he and Pachulia implemented their concept for Bottle Bar.

The restaurant quickly took off, as its 2 a.m. closing time appealed to Atlantans conditioned to calling it a night early. "Everything closes at 10 p.m., except a few places," Pachulia dryly noted.

The front windows contain panels with frosted bottles lit up by LED bulbs. The interior features green leather padding on the walls and a wooden panel ceiling inspired by the ceiling inside New York City's Gramercy Tavern. The atmosphere is trendy and energetic.

The menu offers an upscale take on bar food combined with dishes such as bacon-wrapped brook trout and grilled steaks. An extensive wine menu, featured cocktails and a vast beer selection entice customers to stop by for a weeknight dinner or a weekend party. The 14 TVs throughout the two levels make it a desired sports bar on the weekend.

Allushi said two- to three-hour waits for a table are common Thursday through Saturday. Roughly 1,000 people venture through the doors from 4 p.m. to 2 a.m. on those nights, 200 to 300 of whom have dinner reservations, Allushi said. There are about 80 to 100 dinner reservations per night Monday through Wednesday, he said.

Even with its current success, Bottle Bar's opening was a struggle. Buckhead's lack of restaurants, bars and retail shops made people wary of traveling there. The restaurant's name was even met with confusion.

"People couldn't understand the simplicity of calling a place 'Bottle Bar,' " said Allushi, whose previous restaurant operations experience included working for restaurateur Jean Georges.

Yet Bottle Bar had something that Fifth Street Cafe had lacked: accessible parking. Allushi said much like in Los Angeles and Houston, people in Atlanta rely on their vehicles to commute. "Parking is everything," he said. "People drive everywhere."

That's one of many lessons Pachulia said he learned after Fifth Street Cafe closed in October, more than two months after its facelift. Pachulia and Allushi decided it was no longer feasible to lose money on the bistro, choosing instead to focus all their attention on Bottle Bar.

"You have to be more careful before you make a decision," Pachulia said. "You have to go through all the details."

He acknowledges he could have been more judicious in his decision-making, citing location as the No. 1 facet to a restaurant's success. Other factors, such as ordering food from distributors or monitoring the staff's work efficiency, can't be understated. Pachulia doesn't take part in those day-to-day tasks, given his travel schedule with the Hawks.

But he said he has an understanding now of what it takes to evaluate the potential of a location, to assess how local demographics will affect a business and how to better manage overhead costs, namely rent, labor and inventory. He visits Bottle Bar at least once per week, and he and Allushi talk nearly every day. They declined to reveal the value of their investments in both restaurants, but they expressed confidence that Bottle Bar will fare well whether or not the Streets of Buckhead development continues.

A second restaurant isn't on Pachulia's radar -- at least not yet. He claimed that if Bottle Bar continues to perform well, he could envision opening a second franchise in Atlanta or in another city. Even with success at one venue, the desire to take on a new challenge in the restaurant business isn't likely to escape Pachulia.

Kyle Stack is a freelance writer in New York City who also contributes to ESPN The Magazine.