It sucks (financially) to own a bar on Lower Greenville

After nearly six years of watching - and walking - Lower Greenville, BD has always wondered; How do the scumbars make a profit on just six hours of heavy business a weekend. Most of these places are only open Thursday, Friday and Saturday.

For a few years, BD would pull Texas sales tax reports and calculate Mixed Beverage sales (the hard stuff) for area bars as compared to other businesses in ZIP Code 75206. That got kind of tedious after a few years.

But recently BD asked the state for a database showing sales tax reports from January 2000 through August 2006. This kind of data would help show long-terms trends for the area.

BD does not pretend to be an Excel wizard but after showing our numbers to people who are, there are three conclusions we all agree on

It sucks (financially) to own a bar.

It REALLY sucks to own a bar on Lower Greenville, and

You gotta wonder how these guys can stay in business so long without making any money

I created two charts from this data: Sales for this narrow target group 2000 - 2006, and 2005-2006. Click on the graphics for larger images.

I included a sample of bars outside the area as a comparable - Cuba Libre, Kismet, Regal Beagle, Barley House

The sales tax figures do not include beer/wine, which are high profit - and confidential. Over the spread of five years, the missing numbers are not impacting the overall trends.

My untrained eye notes that sales are at or near the same levels for the long time operators even over five years, except for a few bumps (like post 9-11 or holidays like St Patricks day or New Years).

But when you consider constantly rising monthly expenses like utilities, insurance, costs of liquor, you realize you are looking at a downwards trend that is accelerating very fast.

The bars are losing money like a sieve. That is why the bars will take any and all customers - even the gangbangers, though they claim they don't (Lower Greenville bar owners recently met en masse and decided to impose a street-wide dress code for all patrons).

That is why we have dance hall and noise violations every weekend - pay the ticket out of the high profits.

My final unprofessional conclusions and suggestions for preventing the madness from coming back -

  • Lower Greenville bars are in a death throe - albeit in slow motion.
  • There are nearly 50 TABC permits in a half-mile stretch of Lower Greenville. That is called super-saturation and eventually the weaker ones will fall off the map (which has already happened over the past five years - anyone remember Medusa or Dirty Dave's??)
  • If they are not making money on Mixed Bev sales, how much beer / wine are they selling at a higher profit? Those records need to be made public by the state.
  • If they are not making money selling alcohol, just what else is generating income? T-shirts, cover charges, etc.
  • Do you actually believe that a bar owner is going to report everything properly? BD has long suspected that a few bars are under-reporting their sales, while putting pressure on others to do the same.
  • The City must take advantage of this stagnation by increasing the penalties for dance hall and noise violations before new operators take over.
  • We need a three-strike rule for illegal dancing without a permit, and the same for noise violations
  • The City needs the authority (and cajones) to shut a business down when it is in not operating according to its Certificate of Occupancy (eg a restaurant that becomes a bar and somehow manages to lose the kitchen.)
  • The City must revise existing code to require parking spaces be provided for rooftop patio seating, even when a business changes ownership
  • And we need to bring in No Parking or Resident Only Parking to this area at the city's expense, not the residents.

A BD reader sent an interesting comment to this story -

The money is not kept in the bar at the end of the day. Follow the owners home one evening - see what kind houses they live in, what neighborhoods they live in, and what kind of lifestyle they lead after-hours. None of the bar owners I know live less than two miles away from this area.

Then look at the property owners - none of them live close enough to Lower Greenville to hear the noise or find drunks whizzing on their doorsteps. They don't feel your pain because they can afford to live away from the problems.

Another BD reader said -

When 40% of your trade is cash over the bar against something that is easy to claim, you are actually pouring more per drink, and you can nearly double "profits" when taxes are rolled into the equation.

Just like the IRS does with waitresses under reporting their tip income - TABC needs to do some of that "Secret Shopper" monitoring to get a true picture of their real volume of business and fine them up to well over the difference which they have been skimming all along. And, a perp walk would be nice, too.

You have a phone - call them. Maybe they will give you a percentage for ratting them out.

BD does not pretend to be an database expert. But if you are, here are the links to the raw data. Download them and take a look, then send BD your opinions. The best ones will be posted online.

  • The state's data for all bars in 75206, 2005 through 2006 - click here
  • BD's spreadsheet for businesses at the same Lower Greenville address more than 36 months -
    click here
By Avi S. Adelman under Neighborhoods , Lower Greenville