City Bar owner Brandon Hargrave incurred two debts in 2009 after purchasing the building that houses his downtown watering hole.

One was a typical bank mortgage for the $750,000 purchase of the building. The second note for more than $220,000 was payable directly to the sellers, for the privilege of taking over the bar permit attached to the building.

The Lafayette city-parish government had imposed a moratorium on downtown bars six years prior, but pre-existing bars were allowed to continue operating. Among a variety of unintended consequences were inflated lease rates and real estate prices in buildings that possessed the coveted bar permits. For Hargrave, this meant paying a 30 percent premium to complete the purchase of the building, which he said was difficult to appraise for a lack of comparable sales.

“The building was worth X, but it had this special liquor license attached that made it more valuable,” said Hargrave, who is hoping to reopen City Bar this spring after closing for renovations. “You could go anywhere else in Lafayette and get a liquor license, so you didn’t have anything to compare it to.”

The City-Parish Council is scheduled to vote Jan. 9 on replacing the moratorium with a new protocol designed to increase competition, albeit in a controlled fashion. The idea is to allow new bars on a case-by-case basis through conditional-use permits, that require obtaining separate approvals from the Zoning Commission and City-Parish Council.

These bodies would consider permit applications that include hours of operation, estimated capacity, parking plans and projected revenue, along with public input ahead of votes. Two major noise violations within a six-month period would result in automatic revocation.

“Right now, we don’t have those options," said Councilman Bruce Conque, a vocal proponent of the proposed ordinance. 

The ordinance is meant to give officials — and the public — more say over the types of bars that can operate while also affording that right to more people, Conque said. The longer-term goal is to enliven a downtown that is suffering from a depressed local economy, he said. 

That won't happen without better security, including stronger enforcement of noise regulations, say business owners, realtors and city-parish officials. At present, night patrols along downtown's bustling Jefferson Street require overtime shifts, drawing from nearby precincts.

Noise enforcement is done circumstantially, and typically involves a conversation between a police officer and and bar manager, a volume adjustment and no further action. 

Lafayette Police Chief Toby Aguillard says changes are afoot that will focus more attention on problems that arise with the downtown bar scene.

The department is hiring 10 new officers for a new "entertainment precinct" to cover downtown, along with the Simcoe and McKinley Street areas. The new officers will receive special training to deal with panhandling, drug use, proactive noise enforcement and other issues specific to downtown, Aguillard said. 

The new precinct should be up and running by late summer, the police chief said. 

"It's going to have a significant impact on downtown," Aguillard said. 

Unintended consequences

The bar moratorium was enacted to freeze in place a downtown entertainment scene at the time that was generally considered vibrant, but also at risk of attracting illicit activity, sleazy proprietors and overwhelming crowds. Bourbon Street, or the reputation of it, was often cited as the example of what local leaders did not want to see on Jefferson Street.

But in some ways, the moratorium precipitated what it was meant to prevent, and officials could do little about it.

Bar owners wanting to open downtown had two choices: pay the premium rates in a permitted building or open a restaurant and verify to government inspectors that more than half of sales come from food.

“An honest businessman wants to build a business based on a pro forma, return on cost, investment risk,” said Ryan Pecot, a Stirling Properties executive who compiles Lafayette commercial real estate data. “Not how much is somebody going to hold me hostage to get their license because I can’t get one on the open market.”

The most likely candidates to move into permitted bar spaces turned out to be fly-by-night operators who cashed in on a few nighttime hours of operation per week, said Geoff Dyer, chief executive of the Downtown Development Authority. The nightclubs remained closed most of the time, and other downtown businesses, including long-established, locally owned bars, suffered as regular foot traffic scattered elsewhere, Dyer said.

“It’s almost like a cartel of the haves, the bars that have a license,” he said. “Bad operators could get away with a lot more, just because there is no competition.”

Today, there are approximately 10 permitted downtown bar spaces, some of which are occupied by stable operators. Others have been revolving doors for nightclubs with permissive attitudes toward criminal activity and failed concepts.

The City-Parish Council has been handcuffed along the way, Conque said. Existing bar operators, shady or not, are inherently entitled to run their businesses, so long as they maintain their right to sell alcohol.

Alcoholic beverage licenses are separate from zoning laws that regulate commercial property uses, including bars. Generally, repeated criminal citations on premises or noise violations are the only ways to strip alcoholic beverage licenses.

“We have very little oversight of what’s going on downtown,” Conque said.

The downtown retail economy, meanwhile, hit rock bottom one year ago by a variety of measures.

Taxable sales tanked while commercial vacancies spiked, both to their worst levels in recent memory, according to data compiled by Lafayette Public Schools, which is the parish tax collector, and Stirling Properties.

 

Commercial lease rates, which typically rise year to year, if only slightly in a tight economy, declined sharply below the previous year as 2017 began. More than 10 empty storefronts lined a three-block stretch of Jefferson Street on Dec. 16.

Lafayette’s metropolitan economy shrank at the third-fastest rate in 2016, according to the Bureau of Economic Analysis. The oil-price crash that began in 2014 undoubtedly drove the overall collapse in the metropolitan economy, but the bar moratorium has contributed to empty storefronts along Jefferson Street, said Ryan Pecot, a Stirling Properties executive who compiles Lafayette commercial real estate data.

Building owners with coveted bar permits “felt they had this value no one else had, so they wanted to run a tough bargain,” Pecot said.

“Either they put a crappy tenant in that was month to month and ran a shoddy shop, or they said this is so important, it costs this, and you ended up with a boarded-up storefront because nobody was going to pay,” Pecot said. “When you take away the open market, those kinds of things happen.”

Downtown at a crossroads

The economic signs downtown are precarious, but there is also promise.

The depressing headlines and data did not stop the near-simultaneous expansions of two large, well-known New Orleans establishments to either end of Jefferson Street.

Dat Dog, a hot dog eatery with three locations in trendy parts of New Orleans, opened a 15,000-square-foot restaurant at 201 Jefferson St. last fall with a deluxe performance space in back. Rock n’ Bowl, which, as the name suggests, blends bowling with live music, bought the old Whitney Bank building one year ago and expects to open in March, said CEO Johnny Blancher. Rock n’ Bowl’s total investment will top $3 million, he said.

Other businesses want to come to downtown Lafayette but are waiting to see how the new anchors fare, said Mark Van Eaton, a Beau Box Commercial Real Estate realtor who is marketing the vacant space at 209 Jefferson St., across from Dat Dog.

That was formerly the b.e.d. nightclub, which lost its alcoholic beverage license in October 2015 after three marijuana violations over two years. Beau Box bought the building seven months later as an investment property but is not interested in hosting another club, Van Eaton said. Among the prospects is a well-known New Orleans restaurant that has been looking at downtown Lafayette for three years, he said.

“They just can’t pull the trigger yet,” Van Eaton said. “We’ve had a number of other New Orlans-based restaurants that have looked at it. We’ve come close. Everyone is waiting to see what happens with Dat Dog. They are kind of the test product.”

Asked if Dat Dog is meeting its revenue targets in Lafayette, Bill DiPaola, the chief operating officer, said it is “thriving and successful.”

“We are definitely happy that we chose Lafayette; that is the best way I can say it,” DiPaola said.

Dat Dog founder and owner Constantine Georges is the brother of John Georges, the owner of The Advocate. 

The Dat Dog and Rock n’ Bowl expansions to Lafayette come at different times in their trajectories. Dat Dog is blitzing across Louisiana and Texas, with new locations planned in Baton Rouge, Houston and College Station. The Rock n’ Bowl on Jefferson Street, on the other hand, will be the only one outside New Orleans, at least for the foreseeable future.

Blancher was nonplussed when asked if he paused at the state of Lafayette’s economy, as well as the downtown conditions.

Lafayette, and downtown in particular, filled subjective requirements that aren’t measured in gross domestic product or employment stats. For one thing, Blancher said, “there is more in common with the psyche of New Orleans and Lafayette” than other cities in Louisiana.

For another, he said, the downtown in Lafayette is one of the few that can accommodate Rock n’ Bowl’s parking and square footage needs, at least in close proximity to home base. The alternative, suburban-style strip malls, aren’t an option, Blancher said.

“We didn’t want to be in an anywhere-America strip mall. It’s just not who we are, it’s not part of our identity,” he said. “Downtown Lafayette, I’m sure, has gone through ups and downs for decades upon decades, but it’s still here.”

Follow Ben Myers on Twitter, @blevimyers.