Why some Denver restaurant owners are looking to expand business elsewhere: “It’s challenging”

While many Denver restaurants have closed their doors over the past year, some restaurant owners are taking their businesses elsewhere or expanding outside the city limits.

Due to a multitude of concerns, the owner of Benny Blanco’s Slice of the Bronx made the decision to relocate his business to Arvada.

Other challenges led the owner of 10 restaurants in Denver, including Guard and Grace and Tag Burger Bar, to expand his business to Houston.

Benny Blanco’s is tucked away along E. 13th Avenue in the Capitol Hill neighborhood. Mike Martinez opened the restaurant 24 years ago.

“I just love being a part of my community. I love feeding people,” said Martinez. “Overall, it’s been great. It’s the neighborhood I’ve called home for over half my life.”

But he says that since the pandemic, there has been a decline in business. He cited a rise in homelessness and drug use in the nearby alleys and difficulty parking in the area.

“It’s challenging to own a business anywhere, but in downtown Denver, Cap Hill, yes, it is especially challenging,” said Martinez.

Martinez said that while the restaurant did make it through the pandemic, challenges persisted.

However, it was a disagreement during the restaurant’s lease renewal conversations and a violent assault from a customer that was the last straw for Martinez.

“It’s sad. Sometimes you’re forced to do better things. We still love Cap Hill, we love our community, we love our customers. We just can’t do it here anymore.”

This led him to the tough decision to relocate his restaurant just northwest of the city, to Arvada.

“Arvada also makes it a little easier for small businesses, whereas here in Denver, I feel like they kind of make it tough for small businesses to operate,” said Martinez.

Concerns are also shared among top Denver chefs like Troy Guard, who owns ten restaurants in Denver, including Hashtag and Los Chingones.

“It’s just been the last year or so, it’s been really challenging with the city,” said Guard.

“Before COVID, if I sent my drawings into the city, they always said, ‘We’ll get back to you in 90 days.’ Now, there’s no getting back. It could be 90 days. It could be a year,” said Guard. “That cost me time and money, because materials go up, labor goes up, taxes go up, and so that’s the frustrating part.”

Guard said rising operating, utilities, and food costs have also made it a challenge to expand his business in Denver.

“Even if Denver was great, I’d still be expanding outside of Colorado, but with it being more difficult, it just gave me more push.”

“I’ve had a lot more opportunities in Colorado. Still, people are calling me up, ‘Hey, would you like to go here?’ No, no, no, I’m not even looking,” Guard added.

Guard went on to mention that mortgage rates are higher and the cost of doing business is pricier. Plus, eight of his restaurants in Denver are down in profits.

“I’m not trying to sugarcoat anything, and that’s just a real bummer,” said Guard. “It’s not friendly right now.”

Guard opened his first restaurant in Houston about five years ago, which is up in profits.

While emphasizing his love for Denver, he wants people to understand business owners’ stories and their reasons for deciding to expand elsewhere.

“We love what we do. We just need some help in fixing some of these problems, and that’s really the main focus that I have,” said Guard.

To help recruit and retain businesses, the Denver Metro Chamber of Commerce introduced a recruitment program over the last two years to target 11 key industries that want to expand in Colorado.

“We have 60 active prospects in our pipeline, totaling at least 13,000 new jobs,” said Raymond Gonzalez, the executive vice president of the Denver Metro Chamber, which serves 11 counties beyond Denver.

Gonzalez is also the president of the Metro Denver Economic Development Corporation. He added that the chamber and city are working to retain businesses while recruiting companies from other cities.

“The city and county of Denver has done a phenomenal job of really providing some assistance for small business owners, whether it’s facade improvement programs or rental assistance to help them retain their businesses in the city,” said Gonzalez.

Gonzalez said many companies across sectors like aerospace, finance, and energy are relocating from areas like California and Chicago.

The organization also examines economic indicators that play a role in decision-making to relocate a business or company.

“We look at 36 different economic indicators, including housing, public safety, transportation, quality of life, cost of living, just to name a few. And all of those play a key role in the decision-making process for a company to relocate,” said Gonzalez.

As for the two long-time business owners, they’re already finding success outside of Denver.

“In Houston, commodities are less here, labor is less here, rent is less. So there are a lot of great things,” said Guard. “We just think there are some opportunities to be had down here, and why not come down here and try them out and take advantage?”

“It’s almost like we’re still home; we’re just in a different location, but we’re seeing a lot of the same people, which is great,” said Martinez at Benny Blanco’s.

Martinez opened the Arvada location of Benny Blanco’s in June, which he said has already garnered a lot of support in a short amount of time.

Colin Larson, the Colorado Restaurant Association’s director of government affairs, said that while restaurants continue to open in Denver, they are outpaced by those closing. From July 2023 to July 2024, 183 restaurants left Denver. That’s a little more than 4%.

Larson said that on average, 100 to 200 restaurants close for every 200 that open per year. The last time the city saw this many closures was in 2021, in the middle of the pandemic.

Larson added that most operators are not making even small profit margins, which is making it unsustainable.