Why you should care
Because restaurants — sometimes more than big businesses — truly drive growth.
OZY and JPMorgan Chase & Co. have partnered to bring you an inside look at how entrepreneurs are coming up with innovative methods to help the communities around them. Enjoy the rest of our special series here.
When Kirsten Ussery and Erika Boyd told people they were planning to open a restaurant in Detroit’s West Village, the common response was “Why?”
Not only was it right around the time the Motor City filed for bankruptcy, but the area, a ways off from downtown, had long been forgotten in the midst of all the atrophy. “There was nowhere to get a cup of coffee, much less a meal,” Ussery remembers. “People would say, ‘Why don’t you open in downtown or midtown?’ ” But the pair — who are life partners as well as business partners — lived in the area and knew they’d be filling a need. Plus, their restaurant would serve the community in more ways than one: With a menu of vegan soul food, they hoped to break a cycle of diet-related diseases among Detroit’s African-American population, such as diabetes and high cholesterol.
Four years later, a buzzing commercial corridor has sprung in this once-neglected neighborhood, with Detroit Vegan Soul at its heart. As people started discovering West Village — a historic area defined by a jumble of Queen Anne, Tudor Revival and Colonial Revival houses — they overwhelmingly found they liked it; new homes are now being built to cope with demand, and there is everything from wildly popular bakehouses (Sister Pie) and coffee shops (The Red Hook) to an incoming wine bar (Brix Wine & Charcuterie Boutique) and a fancy bistro, Craft Work. Businesses are coming together to make this new buzz work for everyone; Ussery says she’s been in talks with local eateries about sharing staff so they can give workers the hours they need.
A restaurant can jump-start the economy of a neighborhood.
Kirsten Ussery, Detroit Vegan Soul
This extraordinary success, Ussery notes, was helped by the fact you don’t get vegan soul food just anywhere: “This is a tucked-away area; if you’re not intentionally coming here, you might never find it. But we get people from as far away as Toronto arriving in search of this special cuisine.” It has, she says, proven that “a restaurant can jump-start the economy of a neighborhood.”
It’s true. Now more than ever, you can gauge a city’s vitality by its restaurant scene. As customers increasingly go online to shop or procure services, it’s largely restaurants that draw people to specific areas, create local jobs that stay local and gather together communities. And according to research by the JPMorgan Chase Institute, spending on restaurants is growing more rapidly in American cities than spending on goods or services. In a survey of 15 major metro areas, all saw restaurant spending surge 3.6 percent in the first quarter of 2017. Head of the table? Detroit, which showed year-over-year growth of 8.5 percent in the first quarter of 2017, mirroring the well-documented revitalization of the city.
Also showing growth in the JPMorgan Chase study was Houston, where homey Mexican restaurant Irma’s is widely credited with rejuvenating the Warehouse District. Hands-on owner Irma Galvan, who opened the business in 1989 after the furniture warehouse she worked at shut down, says her eatery soon began drawing local media attention for being “a diamond in the rough.” Serving home-cooked Mexican dishes in an inviting room of mismatched furniture and tchotchkes plucked from her own home, Irma’s was an anomaly in a rundown area better known for shuttered industry and seedy characters. Since then, Irma’s has won a James Beard America’s Classics Award and the district has become a hive of trendy lofts and art studios.
Small-business owners like Galvan, however, couldn’t succeed without access to capital — particularly crucial in distressed communities, where the need for jobs is greatest, and conventional small-business loans are often harder to get. And seeing as their enterprises can have such outsize impacts on local — and, in turn, national — economies, it’s in everyone’s interest that help be there for them to get started.
One example of how this is being done is the Entrepreneurs of Color Fund, which was launched by the Detroit Development Fund with a $3.5 million grant from JPMorgan Chase and a $3.5 million investment from the Kellogg Foundation.
Galvan has also received critical funding from JPMorgan Chase, allowing her to expand the restaurant and add dinner service. “They made it possible for me to keep on going,” she says.
Some restaurants don’t only grow alongside a city; they become synonymous with it. Geoff Schmidt, a fourth-generation owner of the Schmidt’s German sausage brand in Columbus, Ohio, explains the city’s German Village was known for riots and violent crime when the family meat packing business pivoted into a restaurant there in 1967. Today, Schmidt’s is such a mainstay that its signature spicy sausage, the “Bahama Mama,” has been voted the official dish of Columbus. The German Village is now a pretty, historically preserved area popular with tourists. And as Schmidt’s has prospered, so too has Columbus: While a downtown building boom looks to accommodate the young techie types flowing into the newly cool state capital, Schmidt’s has unleashed a fleet of food trucks to cater to their on-trend tastes. “We’re in a really lucky situation because Columbus is just coming on leaps and bounds,” Schmidt says.
As the regeneration of Columbus continues apace, the next generation of Schmidts, Geoff’s son and nephew, are preparing to take on and expand the family business. Like J. C. Penney himself once said, “Growth is never by mere chance; it is the result of forces working together.”