Noticed a spike in Fort Collins restaurant closures? So did we. Here's what it could mean

When the economic impacts of COVID-19 first hit Feisty Spirits, co-owners Jamie Gulden and Joan Eurich found themselves in good company.

Like many other bars and restaurants, the homegrown craft distillery — Fort Collins’ first — muddled through the distancing requirements and capacity limits placed on their cozy Lincoln Avenue tasting room in the pandemic’s early days.

When those eased, the distillery struggled to hire as the Colorado hospitality industry faced widespread pandemic-related staffing shortages. Soon, barrels and bottles became hard to come by as breakdowns in the already struggling global supply chain started to hit close to home.

“It was all these costs, right? Employee costs went up … if you could find someone to hire. Rent costs went up. Ingredient costs went up,” Gulden said late last month.

Despite surges in customer support, consumer behaviors never really returned to their stable, pre-pandemic levels. Feisty Spirits’ tasting room — which had become so busy in 2019 that Eurich said they were hoping to expand its hours the following year — was seeing far less foot traffic.

Worse yet for Gulden and Eurich, the distillery's shaky footing led Feisty Spirits to focus on producing only its best-selling spirits. It moved away from experimenting with new grains and flavors, which was what drew the two into craft distilling in the first place.

“It just stopped being fun,” Eurich said.

The distillery ultimately chose to shutter its tasting room in July, becoming one of an estimated 25 casualties on the Fort Collins food and drink scene in 2023.

Its closure came with two silver linings.

First, Feisty Spirits' lease was quickly taken over by Gnebriated Gnome — a Greeley-born distillery that opened its own operation in the Lincoln Avenue space while also allowing Gulden and Eurich to retain ownership of the Feisty brand and keep its stockpile of products at Gnebriated Gnome.

Second, Gulden and Eurich found themselves with a lot of free time after three years in survival mode.

“We kind of made the commitment to try and support other small businesses because before (closing Feisty Spirits), we never went out hardly,” Gulden said.

“So now that we had the opportunity to go out, we really started to focus on those small, locally owned businesses,” he added. “Then a lot of them started closing.”

Even in its closure, Feisty Spirits appeared to once again be in good company.

Fort Collins is seeing a spike in restaurant closures: Myth or fact?

By the Coloradoan's count, Fort Collins lost 25 food and drink establishments in 2023 — up from 14 in 2022, 12 in 2021, 15 in 2020 and 22 in 2019. At the same time, Fort Collins has consistently added more food and drink establishments to its ranks than it has lost in the past five years.

Since 2019, the city has seen an average net increase of roughly 14 new restaurants, bars, breweries, distilleries, bakeries, dessert and coffee shops per year.

In Larimer County, the number of restaurants, fast-food establishments, lounges, coffee and ice cream shops, and bakeries doing business within its bounds is also largely holding strong.

As of 2023, 843 of those establishments were doing business in Larimer County — a total increase of 74 since 2019, according to data kept by the county assessor's office. In the past five years, the county saw one net decrease in food and drink establishments when it lost 16 from 2019 to 2020.

While these figures show Northern Colorado's ranks of restaurants largely holding strong, a recent spike in closures may be a harbinger for what's to come on the Fort Collins food and drink scene, according to Jake Hallauer, the president of Northern Colorado commercial real estate agency NAI Affinity.

"Statistics are statistics and data is data, but I think you're going to see a number of coming (restaurant) closures," Hallauer said.

While federal loan programs like the Paycheck Protection Program and the COVID-19 Economic Injury Disaster Loan helped buoy struggling restaurants mid-pandemic, that assistance is in their rearview mirror while increases in food, staffing costs, rent and other expenses are expected to continue.

In his 16 years working in commercial real estate in Northern Colorado, Hallauer estimated that triple net expenses — which encompass property taxes, building insurance and maintenance — have increased up to threefold for some Fort Collins tenants. While some restaurant owners were able to renegotiate their leases for below-market rent at the beginning of COVID-19, many are now facing higher rent after more recent lease renewals, Hallauer also acknowledged.

"Unfortunately, in the coming years, you’re going to see more restaurant failures than you’ve seen in the past few," Hallauer said, noting that the local food scene will likely continue to see a lot of turnover as restaurants close and new ones move in to backfill their space.

Nationally, 2023 was marked by elevated costs, shallow labor pools and uneven customer traffic levels throughout the restaurant industry, according to the National Restaurant Association's recently released 2024 industry report and forecast.

Per the association's research, average food costs in 2023 were up more than 20% and average wages were up more than 30% compared to 2019. At the same time, 77% of operators surveyed said they experienced supply delays or shortages in 2023 and 43% reported that they were carrying debt accumulated during the pandemic into 2024.

Four years after the COVID-19 pandemic began, Jeff Brown — co-owner of The Still Whiskey Steaks and chair for the NoCo Hospitality Sector Partnership — said many Northern Colorado restaurants are still trying to figure out how to combat rising costs and do business in this new normal for the restaurant industry.

"It's everything," Brown said of the increases his restaurant and others have faced in the past four years. "Everybody knows in every industry things are more expensive — we just seem to take it on the nose a little bit more.”

At The Still Whiskey Steaks, the cost of rib-eye steaks — the restaurant's most popular menu item — has gone from $9 a pound to $14 in the years since COVID-19 hit, Brown said. In 2020, their wages for non-tipped kitchen employees ranged from $15 to $21 per hour. Today, they start at $18 and cap around $28.

“It’s a new frontier for restaurants, which is maybe a good thing," Brown said, noting that the COVID-19 pandemic came with a reckoning for many restaurants and forced several to take better care of their staff. "It’s definitely been a lot of adapting and pivoting and trying to find new things that work to kind of combat ... whether it’s labor and staffing or the price of commodities or changing guest expectations."

"The great thing about our industry is we’re resilient and we’re creative. We don’t really see problems, we see opportunities, and I think the last few years have showed a lot of us what we’re capable of," Brown added.

Still, Brown acknowledged the perceived spike in recent restaurant closures in Fort Collins.

"Part of it is there are places that have always been around like Jay’s (Bistro), The Fox and (The) Crow, Blind Pig (Pub)," Brown added, referring to a trio of popular Fort Collins eateries that shuttered at the end of 2023 and beginning of 2024. "You’ve just been used to seeing them and, from the outside looking in, they look like a popular restaurant and must be doing fine."

Departures on the Fort Collins food and drink scene picked up in the final months of 2023 and beginning of 2024 — punctuated by the aforementioned closures of Midtown's Fox and the Crow cheese bistro, Blind Pig Pub and Old Town fixture Jay's Bistro. More recently, City Park mainstay Lupita's Mexican Restaurant and south Fort Collins' Envy Brewing announced they would both close by the end of February.

With closure news surging, Eurich, who was still posting from Feisty Spirits' Facebook page after its tasting room's July closure, took notice.

Amid her "Feisty Out and About" posts where she showcases local restaurants, bars and breweries to try, Eurich peppered the distillery's social media feed with the rash of closure announcements she'd been seeing.

In November, she documented one of her last meals at The Fox and the Crow before its end-of-year closure. A few weeks later, she re-shared the news that Avuncular Bob's Beerhouse's was officially closing up shop at the end of 2023.

In late December, she linked to The Coloradoan's story about Blind Pig Pub's planned closure. A couple of hours later, she posted again — this time re-sharing Crooked Stave's announcement that it, too, would be shuttering its Old Town tasting room after five years.

Last month, Eurich re-shared Jay's Bistro's announcement that it would be ending its more-than-30-year run in Old Town.

"Losing another great one," she wrote.

In early January, one announcement broke Eurich's growing pattern of restaurant closure posts.

Choice City, a 20-year-old fixture on Old Town's Olive Street, wasn't closing, the restaurant penned in a Facebook post that Eurich ultimately re-shared.

Instead — and against all odds — it was staying open.

After bumpy ride, one Fort Collins restaurant makes eleventh-hour call

In January 2020, Russ and Anyssa Robinson went on a vacation.

The couple had previously discussed the abstract idea of selling Choice City, their airy Old Town restaurant and butcher shop that had become known for its sandwiches, burgers and expansive beer list. But it wasn't until that early 2020 trip that they finally decided to do it.

After running Choice City for a while — by then Russ had been at its helm for 16 years and Anyssa for 11 — they felt it was a great time to pass the baton. The shop had a strong local following, steady sales and more or less ran itself, with Russ and Anyssa only coming in for light staff support.

"Someone’s going to love this ... this is a successful thriving business," Russ said he recalled thinking before they put it on the market.

"But then March happened," Anyssa said.

After weathering the initial COVID-related dine-in closures that started in March 2020, Choice City reopened its doors for in-person dining that April. The heavy foot traffic Choice City had previously enjoyed was virtually gone, Anyssa said.

"When we reopened, it was nothing," she said. "It wasn't coming back."

That same month, the couple started seeing their food and equipment costs increasing. All told, Anyssa estimated that their product costs have largely gone up between 30% to 50% since COVID-19 began, with prices for things like degreaser increasing 53% and plastic forks going up 67% since 2020. Compared to pre-pandemic prices, the cost of eggs has gone up nearly 300% at the restaurant, Russ said.

Due to the increased food costs, they stopped offering full butcher meats in 2022. They dropped the "Butcher" from their name and got rid of Choice City's butcher case. Today, they only bring in a few raw meat products by special request.

The Robinsons also started working longer hours to try to make up for Choice City's dwindling sales, which Anyssa said saw an estimated 70% dip throughout 2020, 2021 and 2022 before rebounding to about 40% of its pre-pandemic figure last year.

"... You have to figure different ways to make your margins up and the only really controllable costs we have are labor cost," Russ said. "She and I are here open to close.”

Choice City's Paycheck Protection Program loans, which were ultimately forgiven, helped pay staff toward the beginning of the pandemic, Anyssa said. Later, they took a loan out from the Small Business Administration's Economic Injury Disaster Loan program, which helped keep them afloat. Repayments for the program came due in late 2022 and now make up a "major part" of their monthly expenses, Russ said, though he didn't specify the total amount.

“For us, making that payment every month is destroying us financially," Anyssa said.

“And it lasts for 30 years,” Russ added.

Throughout the past four years, Russ and Anyssa said they've been taking things day by day with plans to close Choice City when its lease ended.

“We were counting down the months," Russ said.

When that month finally came, however, the couple had a change of heart.

In early January, Russ and Anyssa made an eleventh-hour decision to re-sign their lease for another five years and try to build Choice City back up. They announced the choice on the restaurant's Facebook page, where they issued a plea to support them and other local businesses.

"For me, this is my life. I’ve been doing this for 20 years. This is the only thing I know. It’s the only thing I love to do, and the thought of just stopping it is just so heartbreaking. I really wanted to keep on going," Russ said.

The decision to keep Choice City open has reenergized the couple, even if that excitement was slightly tempered by news of their Old Town neighbor, Jay's Bistro, shuttering last month.

"I've been really struggling with that because Jay’s has been here longer than us," Anyssa said. "I know that place is run like a tight ship. We know those people … and Jay’s is closing. That’s scary to me."

"... but we're going to keep trying," she later added.

Since deciding to stay open, Anyssa said she and Russ have started marketing Choice City more on its Facebook page — from reminders about their weekly specials and happy hour deals to plans for their 20th anniversary party that was held Feb. 13.

For the occasion, the couple unveiled a pair of 20th anniversary beers brewed by Odell Brewing Co. and Verboten Brewing. Anyssa's anniversary beer — a barleywine aged in NoCo Distillery rye whiskey barrels — is called Hope.

Russ's, a stout, is appropriately named Roller Coaster.

“Like all good roller coasters, you don’t want to get off. You want to take another ride," he said. "Our last ride was a little bumpy, but we didn’t want to end it that way.”

This article originally appeared on Fort Collins Coloradoan: Fort Collins restaurant closures spike: What's in store for 2024?