Should Maine’s downtowns become links in the restaurant chain business?

Five Guys Burgers and Fries is the latest chain to open in the Old Port, a Portland retail icon that is still largely dominated by locally owned businesses.
Matt Wickenheiser | BDN
Five Guys Burgers and Fries is the latest chain to open in the Old Port, a Portland retail icon that is still largely dominated by locally owned businesses.
Posted April 22, 2011, at 11:53 a.m.
Last modified April 22, 2011, at 3 p.m.
A Dunkin Donuts franchise opened in the heart of the Old Port several years ago, tucked in amidst cobblestone streets and old buildings. Around the state, communities try to strike a balance between maintaining local character in downtowns and allowing in franchise operations.
Matt Wickenheiser | BDN
A Dunkin Donuts franchise opened in the heart of the Old Port several years ago, tucked in amidst cobblestone streets and old buildings. Around the state, communities try to strike a balance between maintaining local character in downtowns and allowing in franchise operations.

PORTLAND, Maine —The burger joint is busy during a weekday lunch hour with steady business inside.

It’s one of many places to eat in the city and, more specifically, in the iconic Old Port. Five Guys Burgers and Fries recently joined a plethora of restaurants in the immediate area, from comfortable pubs like Gritty McDuff’s and the Old Port Tavern to high-end restaurants like the Salt Exchange and Fore Street.

But in an important way, Five Guys is also a rarity, representing a continuing evolution that has been taking place in the Old Port for the last decade-plus. In a quirky, cobblestoned and character-filled retail district, Five Guys is a national chain franchise surrounded by local boutiques, art galleries, coffee shops and tourist traps.

The recent grand opening of Five Guys is a long way from the foray fellow chain business Starbucks made into the Old Port in 1999, an entry that was unwelcome to many and resulted in rocks thrown through multiple windows at the coffee shop. Local resistance to chains slipped a bit in the middle of the last decade, when Dunkin Donuts opened a shop on Fore Street, a few blocks from where Five Guys is today.

Several years ago, Portland debated a “formula business” ordinance that was largely in response to a developer’s interest in bringing a Hooters franchise downtown. The ordinance never passed, and the City Council decided instead to put support behind a “buy local” effort rather than actively work to block chain businesses.

“I think people, once we went through the process, realized that not all chains are bad,” said City Councilor Cheryl Leeman. “Amato’s would have fallen into that category of chain stores.”

The tension between economic development, allowing business people to practice free enterprise by developing franchises and preserving the unique nature of Maine’s downtowns is not unique to Portland.

One of the first examples was the fight to get a McDonald’s into Freeport in the early 1980s. Faced with vehement opposition, developers scrapped plans to tear down a historic house to create space for a new restaurant and instead put the McD’s in the house. The result was a fast-food chain that looks nothing like its contemporaries in other communities and instead fits into Freeport.

More recently, in 2009, the idea of a Dunkin Donuts in downtown Camden drew the wrath of residents, and while developers agreed to make their shop fit into the local landscape, they decided to pull their plans in the face of opposition, just before a six-month moratorium on chain stores was put into place.

Today, there is no ordinance in place that would prohibit any kind of fast food restaurant, said Brian Hodges, Camden’s development director. As is often the case in downtowns, there are ordinances aimed at protecting the local flavor that might be unpalatable to many franchisees. The number of seats for businesses can’t exceed 20, and there are no drive-thrus allowed in Camden’s downtown.

One way franchises prosper is by shared use of building layout plans, signage and other business expenses. When local ordinances strip away some of those advantages, it can have the effect of keeping chains out.

Hodges, who until recently worked for the state’s Department of Economic and Community Development, said Camden has one of the more vibrant downtowns in the state.

“I think a lot of that has to do with the uniqueness of the businesses that are here,” said Hodges. “But again, that uniqueness doesn’t mean nonformula.”

Communities should be careful they are not sacrificing possible business opportunities through their ordinances or attitudes, said Hodges.

“There’s certainly ways a community can be receptive to business and encourage business development and attraction — by having a dialogue, by communicating with them,” said Hodges.

Bangor doesn’t have any national chains in the downtown, but that’s not because of any ordinance or attitude, said Shirar Patterson, business and economic development officer. The city would work with any business interested in the downtown, she said.

“We want to make sure it’s the right fit for them as well as for the community,” said Patterson. “We don’t want them to make an investment that isn’t successful.”

There are several historic districts in the downtown area that would require facade requirements and local and even state approval, she noted. While those requirements may be challenging to a franchise, they are critical to maintaining the image of the downtown, she said.

“We’re really proud of it. It’s part of who we are,” said Patterson. “The people who are down here are passionate about what they do.”

And while there may be some local resistance to a chain, “Bangor’s a pretty welcoming community, when it gets down to it,” Patterson said.

She noted that Mexicali Blues, which just opened downtown, is part of a chain, albeit a Maine chain. The Bangor location is Mexicali Blues’ fifth in Maine, and the chain is headquartered in Newcastle.

“Mexicali Blues looked at this community as one that was a right fit for them, they saw the potential for them,” said Patterson.

In Portland, other chains — including McDonald’s, Burger King and T.G.I. Friday’s — have tried to make a go in the downtown but have closed shop. Buildings in the Old Port aren’t exactly conducive to chains; the businesses tend to want a certain amount of footage in easy to use, box-type dimensions. Old Port buildings are normally cramped with non-standard dimensions, angles, etc.

The opening of Dunkin Donuts was sort of a sea change for many developers, landlords and businesses, said James Cloutier, a former city councilor and current Cumberland County commissioner.

“They saw that as sort of a violation of 20-year understanding that chain stores would not be welcome,” said Cloutier.

Cloutier was involved in the effort to establish a formula business ordinance in the wake of Hooters’ interest in the downtown. The goal was to create more local retail, said Cloutier.

“If you can create local retail, then that local retail reinvests somewhere around 70 percent of all of its revenues in the local economy,” said Cloutier.

They tend to use local lawyers, accountants, insurance agents, and revenues stay in the area rather than get exported, he said. The least valuable, in terms of recycling money into the local economy, is the large national retailers, such as Target, Walmart, etc.

“It is absolutely appropriate to favor local businesses in ways that are not confiscatory or prohibitive just because there is a definable community benefit from the reinvestment proceeds you get from local businesses,” said Cloutier. “That having been said, it wouldn’t be fair, it wouldn’t be proper to tell people they can’t run whatever business they want to run, as long as they meet basic health and safety codes.”

Cloutier said he was concerned that as chain stores become more common in the downtown, they’ll force out the local businesses that have given the Old Port its cachet.

“What’s going to happen to Gritty’s, to Three Dollar Deweys? Will those spaces over time transition to upscale franchises?” asked Cloutier. “Frankly, if you can find landlords who no longer care whether you’re a local business or the franchisee of a chain, then I think the pressure will inevitably be to go to more of a chain existence.”

There’s rumors in the business community that another national chain, Firehouse Subs, is eyeing the Old Port. Firehouse Director of Franchise Development Greg Delks confirmed the company is looking to expand into Maine and is targeting a restaurant in Portland by year-end — though he wouldn’t say exactly where in the city.

Steve Baumann, a commercial broker with Cardente Real Estate, said he’s currently working with a boutique national realtor that is interested in the Old Port. Chains that fit in the Old Port’s character — such as Anthropologie and Urban Outfitters — are more original than other franchises and would work in the neighborhood, he suggested.

“I think the attitude is still very strongly for buy local — I don’t think that has changed,” said Bauman. “But I think there is room for a few of the nationals, which is only going to bring more of a draw to the Old Port.”

That balance, said Portland City Councilor David Marshall, is maintained by local market forces.

“We’ve seen a number of chains that have tried to make it in downtown Portland and have been unsuccessful,” said Marshall, who opposed the formula business ordinance. “The locals really determine which businesses are going to survive the winter and which ones won’t.”

He said he wasn’t concerned about Five Guys’ impact on other area businesses, which he said are thriving, well-organized and deep into the buy-local campaign.

Richard Pfeffer, co-founder of Gritty’s, said he’s not really concerned about his new neighbor. Most people who travel down to the Old Port aren’t looking for a chain, but are instead looking for pubs or high-end eateries, he suggested. Gritty’s has been in the Old Port for 22 years, Pfeffer said. He said he didn’t really see the Old Port populace as becoming more welcome to chains or any less. The move was likely based on current economic conditions, he said.

“In an economy like this you have to be pretty pragmatic — you can’t fault a landlord for finding a tenant,” said Pfeffer. “If they have a pulse, he’s going to want them in there.”

The Old Port, said Pfeffer, was one of the crown jewels of Maine’s tourism and retail sector. Bringing in a competing chain forces Gritty’s to rise to the occasion, he said.

“If they’re doing a good job, that just forces me to do a better job.”

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