State Street is traditionally known for its Halloween celebrations, student crowd and of course, its wide array of restaurants. But behind the late night specials and unique menus, State Street also poses many challenges to restaurants hoping to profit from one of Madison's busiest and most competitive areas.
Within the last six months, State Street area dining has experienced significant turnover, namely with the closing of Fuddruckers and Real Chili, as well as the opening of several new restaurants on the 500 to 600 block.
It's simply the reality of the size of this marketplace to have business turnover on a regular basis,"" said Mary Carbine, the executive director of Business Improvement in the Central District.
According to Carbine, who took part in a September market analysis study of the downtown business sector, maintaining a vacancy level between 6 and 10 percent leaves room for growth and competition. ""Though we still don't know exactly why Fuddruckers and Real Chili closed, we expect their spots to be filled soon just because of the nature of the market,"" Carbine said.
When describing State Street, Carbine frequently emphasized its demographic variety. ""There's tremendous market potential because you have a huge number of students, a large downtown workforce and many community members,"" she said.
However, City Council President Mike Verveer explained that despite the heavy pedestrian traffic, businesses on State Street still must deal with the cost of rent.
""Rents here are notoriously high, and if you don't have enough cash flow to pay it and sustain your business, you'll probably go under,"" he said.
Currently, the majority of State Street businesses rent from local owners. In addition, all leases signed in the area contain ""Triple Net Rents,"" in which businesses must pay for both rent and property taxes.
Amy's Café owner Thomas Paras said since he opened 29 years ago off of Gilman Street and State Street, the price of rent has ""grown astronomically."" However, he said the real challenge of owning and operating a successful business near State Street is catering to the large student market.
""You're dealing with the students and you need to offer them good food that isn't expensive,"" Paras said. ""Every time someone opens up, they may always lose customers just because the market is so big, but if the food is well-priced for students, people will come back.""
For Dimitri Syrkin-Nikolau, co-general manager of Ian's Pizza, location and customer service have made his business a staple of Madison nightlife. With two locations, one on State Street and another on the corner of Frances Street and University Avenue, Syrkin-Nikolau said it is important to implement different strategies for each restaurant.
The State Street store tailors to the Capitol lunch market while the Frances Street store, with later weekend hours, focuses more on the student population.
""We're always looking to expand and grow our business, but we don't want to do it at the expense of our product and genuine service to the customers,"" he said.
Charles Haug, the general manager of Potbelly's, said that beside featuring local musicians and donating to fundraiser events, employing student workers is an important step to ensure restaurant success in the community. Between the summer and school year, Potbelly's nearly triples in staff size.
""Allowing our associates to connect with customers really helps us stay alive,"" Haug said. ""Running a restaurant on State Street is all about having a good time with employees and customers, because honestly, State Street really is all about fun and food.""
