When Rick Klein bought the run-down Modesto office complex at 11th and I streets, he saw it as a diamond in the rough. Renovations and modernization, he thought, would polish it into a viable real estate gem.
That was 3 years and $6 million ago. Since then, Courthouse Plaza has sat nearly empty.
That's about to change.
The first business is moving in upstairs and a two-story restaurant is about to open on the building's anchor corner. Leasing negotiations also are under way with a second restaurant, and Klein continues to be optimistic about finding other tenants.
"It's really a great spot. We're right in the heart of Modesto," said Klein of the former L.C. Black Building across from the Stanislaus County Courthouse.
He's been scrambling to find businesses willing to lease space in the renovated 1920s-era building for $1.65 to $2 per square foot per month. "It's been hard. ... But you just have to get out there and try different things."
Sharon LaPachet and Tammy Utz also are trying something new. The two real estate agents co-own Firkin & Fox, the new pub-style restaurant that will open later this month in the building's premier space.
The two women used their homes as collateral for business loans and invested $770,000 to create the pub. They've hired more than 30 employees, purchased new furnishings and equipment, and signed a lease committing them to pay about $2 per square foot per month for the 4,700-square-foot restaurant.
"If you don't take a risk, there's no reward," said LaPachet, 50, who grew up in Modesto and describes herself as "a hometown girl." She said she "always wanted to own a pub, something that's not too formal but not a dive either."
Because neither of them have restaurant experience, they opted to affiliate with the Canadian-based Firkin franchise. They'll pay about 6 percent of their gross sales to the company.
Despite paying more to be in Courthouse Plaza than what's charged for most other downtown locations, the women are confident it will be worth it to be so close to the courthouse and kitty-corner from the Gallo Center for the Arts.
"There are 10,000 people who work within one square mile of here," LaPachet said. "Lunchtime business should be awesome for us."
That corner, in fact, has been home to restaurants for decades. Until it moved last summer, Dewz Restaurant was there for 10 years. Before that, Paradise Cafe called the space home.
Klein had expected Dewz to remain after Courthouse Plaza was remodeled, but disputes over lease rates and other issues convinced Dewz to move elsewhere downtown.
Firkin & Fox had planned to locate a few doors down from Dewz on Courthouse Plaza's opposite corner, but it switched spots once Dewz left.
"One thing we've learned is that taking over an existing restaurant's space is much easier," LaPachet said. That's because the cost of converting older commercial space into a kitchen can be costly. In their original space at Courthouse Plaza, for example, she said the venting system alone was going to cost $70,000.
Moving into the Dewz spot delayed the Firkin & Fox opening, which initially was scheduled for last summer.
Delays also bumped up the restaurant's furnishing costs because the franchise required all the tables and seating to be purchased from Canada. The value of the U.S. dollar has been falling compared to the value of the Canadian dollar, so those furnishings for the 138-seat pub were more expensive than planned.
Government regulations also posed unexpected problems for the new restaurateurs.
"There are so many fees in this business it's absolutely insane," said Utz, 39. That surprised her, but Utz said she knew running a restaurant was going to be time-consuming. In the 1950s, her grandmother owned The Orange Mill restaurant in Delhi, where she worked 10 to 15 hours per day. "So I got a lot of flak from my family about opening a restaurant."
While the women are doing what's needed to get the pub started, they're going to leave its day-to-day management to experienced restaurant professionals. Tony Arnebeck, former owner of Sidelines restaurant in Modesto, will be the general manager. Jason Gardener will manage the kitchen.
"We don't plan to take salary or profits out" until Firkin & Fox is well-established in Modesto, Utz said.
After its late April opening, Firkin & Fox will operate 11 a.m. to 2 a.m daily, serving food from 11 a.m. to 1 a.m. The owners said the pub's hours are set by the franchise, so they won't change.
The menu also is franchise-driven, with many of the entrees priced about $9 to $10, such as fish and chips, shepherd's pie and bangers. The pub will have 16 beers on tap and 15 in bottles, with prices starting at $4.
Beer will be a key attraction, Utz said, as evidenced by the pub's name: "Firkin is a measurement of alcohol. It's equal to nine gallons."
Whether the beer selection will attract more tenants for 37,315-square-foot Courthouse Plaza isn't known.
Klein said a financial services company is moving into a third-floor interior suite, and it will open May 1. The name of that company, however, was not released.
Neither was the name of the local restaurant negotiating for the plaza's other downstairs space.
Klein thinks adding another eatery there will be good for Firkin & Fox: "There's a synergy that comes from being close to another restaurant because people coming there know that if one is full they can go to another one nearby."
Attracting new businesses to old, refurbished places has been Klein's specialty. In 2003, he bought the nine-acre downtown Modesto site where the defunct Tillie Lewis Foods Cannery used to be. He fixed the place up, investing about $5.5 million.
"We sold it last December for close to $10 million," Klein said.
He thinks his $6 million Courthouse Plaza investment eventually will pay off, too.
"I'm firmly optimistic about the future of Modesto," said Klein, who spends about three days a week in the city. "All communities go through booms and busts. This is just a temporary (real estate) bust we're in."
Bee staff writer J.N. Sbranti can be reached at firstname.lastname@example.org or 578-2196.