Though Galatoire’s Bistro announced late Friday it was abruptly shutting its doors to make way for a new restaurant tenant that will take over its space in the Acadian Village Shopping Center, Galatoire’s owner John Georges had been looking for someone to take over the space for more than a year, according to multiple sources familiar with the situation.
At least three restaurant groups entertained talks with Georges, some more seriously than others. One included a powerhouse trio of local restaurateurs—Ruffino’s owner Ruffin Rodrigue, Raising Cane’s founder and CEO Todd Graves and Walk-On’s co-owner Brandon Landry, who briefly toyed with the idea of developing a steakhouse concept in the space, according to Rodrigue, who says the talks were only preliminary.
“We all had too much going on to pursue it seriously,” Rodrigue says.
The group loved the location and the ample parking, he says. But at nearly 6,000 square feet, the Galatoire’s space is large for a fine dining establishment.
“The thing about that area–if you’re white tablecloth you better have a small joint,” he says. “People like to go out in sandals and tennis shoes.”
In a statement Friday, Galatoire’s says it has “sold its lease options” to a new group that is planning an “upscale casual restaurant and bar.”
Terms of the deal were not disclosed, and it is not clear that the new group will operate under the same lease terms as did Galatoire’s, which has a 20-year lease through 2031.
But those terms are pricey compared to what other restaurants in the area pay in rent and relative to what the restaurant was doing in sales.
According to a proprietary offering memorandum of Acadian Village obtained by Daily Report in 2014, when the shopping center was being listed for sale, Galatoire’s had an initial base rent of $24.43 per square foot, which was scheduled to increase to $25.04 per square foot, or roughly $150,000 per year, in November 2016.
Additionally, the restaurant was required to pay $89,700 per year, or an additional $15 per square foot, through 2025 as part of an amortized reimbursement to cover the $945,000 cost of the restaurant’s build out.
That totals $239,700 per year, or $40 per square foot.
By comparison, most restaurants along Perkins Road pay between $25 and $30 per square foot in rent, says Wesley Moore, an appraiser with Cook, Moore, Davenport and Associates.
What’s more, according to the 2014 offering memorandum,
Galatoire’s was required to pay an additional rent of 5% of gross sales in excess of $3 million. In 2013, the restaurant reported gross sales of $3.4 million, which would have upped the lease rate by an additional $4 per square foot.
“Based on these numbers, their sales would have had to have been much higher to justify paying that much rent,” Moore says.
Though Acadian Village has been sold twice since that offering memorandum was prepared, most recently in April for $38 million, Moore says it is unlikely the lease terms would have been renegotiated.
Calls to the leasing company representing Acadian Village’s owners were not returned. Georges is out of the country and unavailable for comment.