DENVER — Many Denver restaurants are going belly up or moving to the suburbs.
According to Denver's Department of Excise and Licenses (EXL), records show a drop of about 24% in overall food licenses associated with restaurants since 2023. To better understand the trends, Denver7 is taking a 360 look at the struggling industry and what owners are doing to stay afloat.
It's the lunch rush at Blue Agave Grill, and Brenda Lucio is in her happy place.
"We're pouring our heart into it when we're making it," Lucio said.
Lucio and her husband opened their southwestern scratch kitchen along the 16th Street Mall nearly a decade ago. They've watched storefronts around the mall shutter, but the Lucios have held on while the pedestrian mall has been under construction.
"You’re not seeing what’s happening the other six days. You’re not visiting that restaurant," Lucio said.
Restaurants continue to face challenges beyond the COVID-19 pandemic.
"Rising costs in utilities, insurance, rent, cost of food," she Lucio.
The owner of The Lobby, Christian Batizy, is facing similar challenges.
"We have reduced two positions and over $100,000 in salaries to try to overcome kitchen raises and front-of-house raises," Batizy said.
But Batizy doesn't plan to stop serving brunch any time soon.
"I'm kind of the other direction. Whereas most people are running from downtown, I actually purchased my space in August. So, we're no longer tenants," Batizy said.
Despite the trends, he's locked down a permanent spot in Denver's Ballpark District.
"I've never seen a year like we did in 2024, where the math really did catch up with us," Lucio said.
Denver7 sat down with Sonia Riggs, president and CEO of Colorado's Restaurant Association, to better understand the reasons behind the closures. Riggs points to consumer behavior as a major factor.
"Fifty-one percent of people in 2024 ate out less at restaurants," Riggs explained.
She also said some are finding it easier to operate in Denver's suburbs because of the city's rising minimum wage for tipped workers, which has gone up to $15.79 an hour.
"Denver's minimum wage is higher than that of New York City," Riggs said.
The Colorado Restaurant Association also cites Denver's lengthy and costly licensing process as a reason for restaurants fleeing out of the city. More than 90% of businesses that have applied for a retail food license have an active or pending application.
However, a spokesman for Denver's EXL, Eric Escudero, argues that the process has only gotten easier since it was shifted online in 2023.
"The vast majority of restaurants either saw no increase to their licensing fees or saw actually a reduction," Escudero said.
Data from his office shows food licenses associated with restaurants cost $256 a year. Escudero said 86% of renewals are approved within a week.
"We see no reason that licensing is a burden for restaurants to leave," he said.
But Lucio and others are feeling the heat. She owns six other restaurants in northern Colorado where the minimum wage is $4 less an hour.
"It's a little bit different in the north. Denver, with the labor costs that we've got here, with mandated minimum wage being $18.81 (for non-tipped workers), that's a lot different than the other restaurants," Lucio said.
Batizy said rising costs force restaurants like his to get creative. That's why he's turning to his private event business, catering more weddings and corporate meetings than ever before.
With every plate served, these owners remind customers why they're still holding on when times get tough and why they need help at the end of the day.
"I'm a pretty firm believer that restaurants are like a cornerstone of what makes the city, right like we are part of every celebratory function that you have," Batizy said.
Lucio echoed Batizy's sentiment.
"You go there for comfort. You go there because they take care of you, they recognize you, they appreciate you. Don't let them go," she said.
Business
Wage-related bill hopes to bring relief to struggling Colorado restaurant owners
State lawmakers are proposing legislation to reduce operational costs for businesses in cities like Denver, though it may result in decreased pay for tipped employees.
Introduced by Democratic Representatives Steven Woodrow and Alex Valdez, House Bill 1206 seeks to ease financial pressures on restaurant owners like Baity.
Known in the industry as the Restaurant Relief Act, the bill would increase the share of hourly wages that restaurants are not obligated to cover in municipalities where the minimum wage surpasses Colorado's minimum wage for tipped workers.
Riggs said this would save businesses money or allow them to allocate it elsewhere.
“It'll allow restaurant owners to be able to give more of their money to the back-of-the-house workers, which continually get left behind every time we see a minimum wage increase,” Riggs said.
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