Some pubs age like fine wine
The Pegasus Group is building an empire of mature, historic bars for boomers
JULY 22, 2003
TORONTO -- When baby boomers were young, they wanted loud, in-your-face music, with flashy bars and clubs to enjoy it in. But as they aged, their tastes refined and mellowed. Now, the boomer generation is looking for a different kind of bar -- something quiet, classy and mature.
It's a phenomenon that's given rise to a host of English-style pubs and bars, and one that tends to work in cycles, according to a veteran realestate-industry analyst. As the boomers grew older, they began looking for something quieter, which -- in the late 1970s and the early 1980s -- led to the first wave of English-style pubs, such as the Duke Pubs and the Elephant & Castle chain. The cycle will repeat itself with the baby boomers' children and grandchildren, says Stuart Smith, senior sales associate with CB Richard Ellis in Toronto, which should ensure the
success of such bars.
A new generation of pub conglomerates, such as the Fox and Fiddle and the Firkin Group of Pubs, is spotting the landscape and filling that niche, Mr. Smith says. Instead of a flashy environment, pub goers are seeking a quieter, neighbourhood scene. "The reason these chains are successful is because they appeal to a calm, quiet, mature, sophisticated, older audience," he says. "Their future looks great. It's their market to blow."
Pegasus Group Inc., headed by president and chief executive officer Terry Tsianos, runs the Fox and Fiddle chain and is now expanding across Canada. The company is also sprucing up historical buildings in Toronto and making them pub-style favourites.
First, it was the fabled Wheat Sheaf Tavern in Toronto at Bathurst and King Streets -- first opened in 1849 -- which Mr. Tsianos and his partners purchased in 1995 for $780,000 in a power-of-sale transaction after the bar was shut down. Next, there was the Cabbagetown icon Winchester Hotel, which Pegasus bought for $2.2-million. And then came the antiquated but revered Brunswick House in the Annex, which the group purchased for a song -- $400,000 to be exact.
"I'm a bottom feeder," he says. "I love buying property that is cheap."
A year ago, Mr. Tsianos and his partners closed the century-old, worn-out, craggy Brunswick House for two months for $500,000 in renovations. The new-look "Brunny" makes for a vibrant part of the Annex on Bloor Street, where restaurants abound.
His most recent venture may be his most prized, although he doesn't actually own the building: the boarded-up Jolly Miller Tavern on Yonge Street. He recently acquired the rights to the 147-year-old property for 20 years, with another 20 years available on a renewable option. Mr. Tsianos is planning a $2-million renovation, with an opening set for this fall.
"We'll likely still call it the Miller, but I don't know about the Jolly," Mr. Tsianos says. "It's a big project for us. It was a rundown bar and we'll turn it into a steakhouse."
The Jolly Miller and its one-acre car park has laid dormant for years, but it and the Wheat Sheaf have been designated historical sites by Toronto's culture department.
"The Jolly Miller evokes the 19th-century Georgian buildings in Ontario," says Victoria Pappas, a valuator-negotiator in the city's facilities and real estate department. "It has historical and architectural significance . . . It's the only 19th-century commercial building still standing on its original site in North York."
Pegasus has put about $200,000 worth of renovations in to the Winchester and more than $600,000 into fixing up the Wheat Sheaf. Plans to convert the third floor of the Wheat Sheaf into apartments from 21 rented-out rooms have been abandoned, and it will now instead become a new lounge, Mr. Tsianos says. But the old bars are only a part of Mr. Tsianos's empire -- four Fox and Fiddle outlets and three O'Grady's restaurants take up most of his time. He purchased the Fox and Fiddle outlets in May, 1999, along with rights to the name and the company
logo, which depicts a fox playing a fiddle. Now the chain, including new franchises, encompasses 18 properties. All have a unifying "reclaimed red-brick" appearance, and two are in historical buildings.
The Fox and Fiddle chain recently expanded west from its home base in Southern Ontario. There is one outlet on the Langley Bypass in British Columbia and another, which opened on May 20, on the main floor of the Vancouver Public Library in Library Square. It is downtown in a federal-government district where thousands of people are employed.
"We loved the Library Square site because it attracts tourists from around the world," says Mark TenEycke, Pegasus' s director of operations.
"It's built like a Roman coliseum and you can see it from miles away.""It's built like a Roman coliseum and you can see it from miles away."