Restaurants along U.S. 30 in Lake County hurt by ailing economy

MERRILLVILLE -- Leslie Kotvasz, owner of Ursuline's Kitchen a few blocks north of U.S. 30, is feeling the squeeze and so, she suspects, are her customers.

The owner of the Cajun-themed restaurant, which is named for an order of nuns and opened less than two years ago, is offering soup and salad specials and better wine prices to entice diners.

"Everybody is feeling the pinch," she said, adding people can't afford to get out to eat like they used to.

Corridor of change

Along the U.S. 30 corridor, other restaurants are feeling the pinch, too, moving and leaving empty storefronts or shutting down completely, though Kotvasz said she is holding her own so far.

Town officials wonder whether the area got too built up, with more restaurants than the corridor could sustain, and what factor the economy may be playing in the shake-up.

Very rough period

"It's not an anomaly," said John Livengood, president and CEO of the Restaurant and Hospitality Association of Indiana, adding he has also fielded calls from the media in Muncie and Indianapolis, asking why restaurants were shutting their doors.

"The industry is going through a very rough period right now, and it is taking a toll on restaurants, both independents and chains," Livengood said.

Overbuilt areas wouldn't be a problem, Livengood said, until an economic slowdown hit. He said a "perfect storm" of factors is contributing to the challenges restaurant owners face.

Increasing costs

Energy costs are soaring, driving up utility bills. Food costs are rising as well, in part from increased delivery costs and also from the diversion of corn to make ethanol.

Labor costs are on the way up, too.

"You put those three things together, along with the downturn in the economy, and it's not such a good thing," Livengood said, also noting consumer anxiety over the housing market. "The concern I have is that none of these things is going away soon."

Market pressure will force restaurant owners to operate more efficiently in the face of rising costs if they want to survive, Livengood said.

Empty buildings

Among Merrillville's casualties are Smokey Bones, Brown's Chicken and Lone Star. Arby's moved to another location along U.S. 30 and BW3 moved to Hobart; both left empty buildings behind.

"The economy had to be a factor in some of the businesses that may not be able to compete on a larger scale," said Hyon Kwak, chairman of the board of the Merrillville Chamber of Commerce.

Playing the blame game

Town councilman Joe Shudick, whose Ward 5 encompasses part of the U.S. 30 corridor, puts part of the blame on the chain restaurants that allow their franchises to saturate an area, so a fast-food chain, for example, may have several locations within only a few miles.

And it's not just fast-food places.

He noted that the popularity of Mexican food has spawned five or six restaurants within a mile.

"It's a really popular fad right now. Not all are going to survive," Shudick said.

Shawn Pettit, a member of the Merrillville Economic Redevelopment Commission and a town councilman representing Ward 6, which also includes a portion of U.S. 30, said he has noticed "a lot of redevelopment of restaurants in the past three years."

He wondered why national chains chose to close one location and leave another open, and noted other spots in town where restaurants have come and gone.

"It's kind of hit or miss," Pettit said.