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Mill Avenue sees high number of businesses shutter

Caused by pandemic, high rent

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Mill Avenue has long been a nightlife mecca for Arizona State University students and Tempe locals in need of a night out in their neighborhood, but the bars and restaurants that dot the street are seeing serious turnover.

Iconic, long-standing bars like Rula Bula have shuttered in recent months, along with Americana Burgers & Beer, La Bocca Wine Bar & Urban Kitchen, and the Tempe locations of El Hefe and Dierks Bentley’s Whiskey Row. Nearby bars like C.A.S.A Tempe, Low Key Piano Bar, Cue Club and more have remained untouched over the years.

In fact, about 24 businesses have closed along Mill Avenue in the past year, according to Kate Borders, president and executive director of the Downtown Tempe Authority, though she said 17 new businesses joined the street’s ranks during first-quarter 2021.

“I would say that our turnover rate is very typical,” said Borders, whose nonprofit organization works closely with the city to boost Mill Avenue’s value. “We saw more closures during 2020 due to the pandemic, but those circumstances are beyond normal. Businesses close for a variety of reasons: changes in the business, negotiation of lease rates, owners moving or retiring, etc...”

Tempe’s status as a college town makes its business landscape unique, as students tend to leave the area in droves during summer. That season is already a difficult time of year for Valley businesses contending with high heat and low tourism, but Borders said sales they rack up during busier months of the year typically help to offset slower months.

Some shuttered businesses say COVID-19 was the main cause of their demise.

“COVID-19 state-mandated closures had a devastating impact on the restaurant industry,” said Lissa Druss, spokesperson for Riot Hospitality Group, which owns both Whiskey Row and El Hefe. “The Tempe locations of El Hefe and Whiskey Row closures were a direct result of COVID-19.”

Both bars maintain locations in nearby Old Town Scottsdale; Whiskey Row also has a location in Gilbert. Both also have locations outside of Arizona that remain open.

In addition to closing the Tempe location, La Bocca also shuttered its High Street location of the popular pizzeria in northeast Phoenix. A third location in Chandler previously closed in 2018, meaning La Bocca no longer has any restaurants in Arizona.

Not every closure can be blamed on the pandemic. Rula Bula’s owner, who had run the custom-built Irish pub on Mill Avenue for close to 20 years, said a landlord dispute pushed him off the street.

In 2019, Wexler Developments, a Canadian-based real estate development and management company, bought Rula Bula’s building, along with a few other buildings on Mill, including Centerpoint on Mill, which previously housed Whiskey Row and El Hefe.

Rula Bula owner Steve Goumas previously told the Independent when Wexler bought the building, it lined up with the end of the pub’s lease and the new landlord informed him that Rula Bula’s space had been leased out. Goumas said the landlord was charging above market value for the space. Goumas last said he would be searching for a new location for his iconic Irish pub, but there have been no updates since Rula Bula closed its doors on Mill for good this summer.

Goumas did not immediately respond to a request for comment and neither did Wexler Developments.

High rent could be responsible for some turnover along Mill Avenue.

A listing for a 3,943-square-foot retail space on the street is asking for $30 per square foot, according to LoopNet, a commercial property website. Another 9,265-squarefoot space on the street is asking for $33 per square foot. Centerpoint on Mill currently has two vacant spaces, according to a LoopNet listing.

All in all, Borders said adding new retail opportunities alongside old haunts can make Mill Avenue a more exciting destination in downtown Tempe. Every location that closed in 2020 has either been leased already or is in negotiations, she said.

“The cycle of a downtown is very dynamic,” said Borders. “New businesses can offer a fresh concept to our downtown and at the same time older businesses can offer some history and the feeling of establishment. It is ideal to have both within the downtown.”

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