About six weeks ago, Eric Brown and his wife, Sharon, finally decided to make the lifestyle change they have been talking about, on and off, for the past three years. Brown, the former founder of Artisan Homes in Arizona, had been at loose ends ever since he left that business—and its owner, Engle Homes—in 2006. Subsequent stints with Robert Charles Lesser & Co. and the Development Planning and Finance Group convinced Brown that consulting wasn’t for him. “I was liquidating a home builder in Denver for a bank and basically told myself, ‘This is not what you want to be doing.'”
And at 49, Brown didn’t see himself starting a new construction business, especially at a time when the housing industry in general and Arizona’s market in particular remained shaky.
Since leaving Artisan, Brown has been fantasizing about owning a restaurant in some far-away place, like Australia or New Zealand. He and his wife, though, decided to stay a little closer to the United States when they chose the Caribbean island of St. Maarten to look for a venue to purchase. Brown explains that St. Maarten, with its French- and Dutch-speaking quarters, would be a good fit for his children, ages 7, 4 and 3, who attend the International School of Arizona.
Brown says he looked at restaurants with price tags ranging from $185,000 to $1 million. The most attractive spot was Peg Leg Pub & Steakhouse, a surf-and-turf bar and grill which happened to be owned by two emigres from Phoenix, Linda and Jack Parker, who had bought the restaurant as part of their retirement plan several years earlier. Brown expects to close this deal by the end of November.
Peg Leg Pub had a number of things going for it, says Brown. For one thing, it’s an established business that is generating anywhere from $900,000 to $1.2 million in annual revenue. “I didn’t want to start anything again,” says Brown. (The Parkers are staying on for a while as employees.) Second, in 2008 the Parkers relocated the restaurant to a larger building that’s part of the Princess Port de Plaisance Resort and Casino near Simpson Bay on the Dutch side of the island. The hotel there is about to open a new spa, where Brown hopes his wife might find a job teaching yoga.
Brown laughs that his experience as a restaurateur begins and ends with a job at a Tastee Freez when he was in high school. However, he sees food service as being not all that different from home building. “Your cooks are your subs, and your waiters are your salespeople.”
He can only hope that running a restaurant is a bit more profitable than building and selling homes in the United States have been lately. That he’s making a clean break from his past is evinced by the haircut he’s willing to take on his house in Phoenix, on which he put a 30% down payment and spent another $350,000 in renovations. “We’ll be lucky if we get $100,000 back of our $600,000 investment,” he laments.
Brown says he’s lost confidence in the housing sector because it’s too unpredictable and doesn’t foresee the industry getting back on its feet, in a substantive way, for years to come. He also thinks national builders aggressively buying land again are getting ahead of themselves. He points to two big builders that recently paid $43,500 per finished lot in Gilbert, Ariz., where they plan to build 1,600- to 2,000-square-foot homes that would sell for around $100 per square foot. “How can you run a business when you don’t know what your absorptions will be?” he asks.
Not that he’s risk-averse himself. Even as he moves onto his latest venture, Brown continues to mull possible new business opportunities, like setting up a kiosk at the airport in St. Maarten where he would sell T-shirts from his restaurant and the island’s other tourist-oriented businesses to outgoing travelers who at the last minute might want to take a reminder of their trip with them.
John Caulfield is senior editor at BUILDER magazine.
Learn more about markets featured in this article: Phoenix, AZ.