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Dr. Dremo’s Seeking Investors for New Location

by ARLnow.com June 17, 2011 at 11:37 am 4,621 44 Comments

The former owner of Dr. Dremo’s is once again seeking investors to help secure a possible new location for the late, lamented dive bar.

The Washington Business Journal first reported that Andrew Stewart is eying a 6,000 square foot space somewhere in Clarendon. The exact location has not been revealed.

Stewart has come close securing a new location for Dremo’s several times, but to no avail. In an email to potential investors, Stewart says he hopes this time will be different.

Dr Dremo’s is trying to raise $350K to open a new spot in Clarendon. Investment opportunities are available… For more info, please contact: [email protected] Financial statements and documentation available upon request.

It has been almost 2 years since we last tried to round up investors. We have looked at many places, spoken to many real estate agents, and actually came close a handful of times. It is only now that we are close enough to having a deal, that it is again time to round up investors and try to raise the funds.

The old Dremo’s location in Courthouse was razed shortly after it closed in January 2008. The development that was supposed to take its place has been delayed since then, although construction is reportedly set to begin soon.

  • BerryBerryCold

    What could possibly go wrong with this investment.

  • WestoverAndOver

    I still shed a tear when I pass the old location.

    • b0rk

      Me too, and consistently lament the good old days to friends.

  • G

    Too bad the ski chalet location didn’t work out for them. I’m curious to see what ends up going there.

  • Really?

    What?! No PIke love. Booooo….

  • SoCo Resident

    Ok, Dr. Dremo lovers: cough up some dough!

  • TooEasy

    what could 5k do?

  • BerryBerryCold

    I’m curious as to why they can’t secure lending from a more traditional source such as a bank. Isn’t this the purpose of SBA-backed loans?

    • crunCH

      Government aid for businesses is socialism.

      • DSS10

        Unless your a bank…

    • charlie

      this is standard operating procedure for restaurants around here. You do a private limited offering. stays under Wall Street Regulations. Carpool, Clarendon Grill — all did the same thing.

    • novanglus

      With interest rates stuck near 0, banks can’t do much debt financing. Everything’s equity now.

  • Really?

    pubilc privat partnership between apah, county, & dr. dremos?

  • Cas

    Shirlington needs a nice bar like Dremos. Make it a little less uppity

    • WestoverAndOver

      Bungalow is kind of like that with its 1995-era decor and condition.

  • karzai

    Is this a joke? He has to solicit individual investors to raise 350K?? That’s the average purchase price of a typical 1 bedroom condo in Clarendon? He can’t get a traditional construction loan from a bank for that (relatively small) amount of funds?

    I suspect, as before, that he is again trying to tantalize Dremo fans with the idea that he is returning to the Orange Line corridor. I very much doubt this is ever going to happen.

    Ridiculous.

  • doodly

    Perhaps the private investment is in addition to, not in place of, his own funds and borrowed funds.

    • karzai

      Doodly: If he is borrowing funds or has his own funds, it is a very easy proposition to just borrow or utilize an extra 350K. 350K is nothing, when it comes to capitalizing a business like this. If you have to solicit average Arlingtonians to raise 350K, you’ve got a problem – no other way to slice it.

      If Stewart has a compelling idea, which he does, and a compelling product, which he does, then he should not need to do an “e-mailing” to average citizens to raise 350K.

      There has to be more to this story….

      • CW

        karzai – why is this really so difficult to swallow? A couple thoughts:

        1) If Mad Rose managed to really spend their much-bragged-about figure of $1 mil on the (not particularly amazing) interior of that place, then this dude’s going to need a lot more than $350k in total.

        2) Credit is tight. I don’t know what he’s been doing in his spare time since old Dremo’s closed, but everyone has a limit to how much they can personally leverage. This is a former dive bar owner, not The Donald, we’re talking about here.

        3) More sinister – depending on how he words it, he can straight up lose private investors’ money and walk away, unlike a bank.

        4) More optimistic – it’s a friggin dive bar. Dive bars work on word of mouth, on community feel. What better way to self-promote than to give members of the community a vested (or maybe not vested until a certain point in time) interest in driving business there? “Hey, wanna go to dremo’s tonight?” I ask my friends; little do they know I have $10k in the place…

        • JamesE

          It will be a dive bar for about 2 days before it is overrun by the typical Clarendon scene sadly.

          • Lou

            Yep. And it will be new. It will be a “dive” bar like Rainforest Cafe is the Amazon.

          • CW

            I know – hundreds of Dbags buying $5 miller lites like they’re going out of business.

            Maybe “sadly” for people looking for a dive bar…personally, I’m drooling and reaching for my checkbook as we speak…let me see those terms and conditions!!

        • karzai

          CW: Your points 3) and 4) crystallize where I am on this question. I see his solicitation as way of gauging how much support he has in Clarendon for re-opening Dremo. If he gets many investors, then he figures Dremo Clarendon will do well. If he gets a tepid response, then he figures it will not do that well and he can blame lack of community support for the decision not to open it.

          I also totally agree that his plan basically puts all the entrepreneurial risk on us, not him. I disagree that he cannot get a loan – he does have something to secure the loan – he has the Dremo name, which was successful once and which even he says himself he can capitalize at some point. So I disagree that he has no options other than this private offering.

          My fundamental point is that if he is having trouble raising 350K, which is not a lot of money in this day and age, and certainly not in Clarendon, then we are dealing with a guy who just simply does not have the financial resources to be opening a large business in Clarendon. With his contacts, he should be able to put together some type of partnership who have deep pockets – and not have to hit us condo dwelling government types in our personal pocketbooks.

          I will give him my money when he opens, in the form of patronizing his business. Not before then.

          • CW

            Gotcha. I’m still not sure though how much capitalization value the Dremo’s name has. Maybe he really does need the extra 350 above and beyond what the name is worth. Was the name worth much in $ value, or just in emotional ties and loyalty? I arrived right after its demise. People clearly loved the place (hell, I even love the sound of it having never gotten the chance to go) but that doesn’t mean it was a cash cow.

            Maybe he really is just trying to make it a community venture? Maybe he’s trying to stick it to “the man”, i.e. big lending entities and the traditional sort of deep-pocketed, hard-bargain-driving private investors. Seems like the kind of thing a dive owner would do.

          • karzai

            Right, we really do not know for sure his numbers and his situation, agreed. My point is that, having observed Stewart’s past comments and his activities, I see him as risk-averse and gun-shy. I do not see him as a risk-taking entrepreneur. Thus, with this solicitation, he again seeks to pawn all the risk on other people (us) because he lacks the guts to take on the risk himself.

            As I’ve said on this board a few months ago, my view is that he has/will have a very very large customer base that likes his concept and his product. If he can’t figure out a way to monetize that somehow, then he’s just simply not a very good businessman. He should have enough faith in himself and his product to move forward without passing the hat around to us.

          • jon

            350k isn’t a lot of dough? You sound like a real snob, bro.

      • doodly

        Maybe he already borrowed that “extra” 350k but he needs 350k more.

        The point is that we don’t really know his numbers.

  • Frank Alfred

    It seems that noone here has read anything about the current state of small business lending –

    It’s much easier to get a $350,000 loan on a building because the bank has collateral. Ask a bank to give you $350,000 or even $100,000 for your new or existing business, you need to have collateral; and leasing a restaurant space doesn’t give you any. There is a chance that some banks will capitalize any major equipment purchases, but for operating income, good luck.

    So, unless his house has enough equity in it; or he has enough cash assets (they won’t use retirement funds for collateral); then he’s not getting a loan. And, if he had enough cash assets, he wouldn’t need a loan.

    The SBA doesn’t do anything other than guarantee whatever small portion of a business loan that a bank will not underwrite. You still need collateral, and you have to start at a bank and meet their underwriting criteria first. On top of that, SBA loans typically carry a higher interest rate than do traditional loans.

  • Lou

    If you look at $350K against 6000 sf, it’s about $58/sf. That’s not an unreasonable build-out number. You can build your standard DC office space for that number, as long as you don’t go nuts with fancy wood finishes or interior waterfalls.

    I thought I read somewhere that he had the old Dremo’s bar equipment stored somewhere, so maybe his equipment costs are not very much.

    But $350K will definitely get you more than half-way to building a reasonable space. Not including the costs of your architects, permitting, etc.

    Anyway, if you read the last line in today’s WBJ article, it’s very telling. He’s looking to sell the name. So he needs to get something built and running, and then cash out on Dremo’s.

    • CW

      Just to be clear, Lou, before people jump on this, your number is BUILD-OUT cost. The guy still has to somehow get and pay for the space.

      Just don’t want people to think you’re claiming you can get 6000sf for 350k.

      • Lou

        Yes, that was just talking about hard construction costs, just ballparking the hard costs to show that it’s not too small of a number to build something.

        You’re right, he still needs to figure his leasing costs. But he’ll probably get some TI money thrown in from the landlord. Say he gets $18/sf with the lease, then he can use that to offset operations as he gets started.

        That’s where it becomes important to know where he’s looking, as in who is the leasing company.

  • SoCo Resident

    3 – -about 6,000 sq. ft. spaces– will be available in the new Lee Center on Pershing Dr. Although new, it could be made to look divy, “unfinished”.

    • karzai

      Stewart told the Wash Business Journal that he is negotiating a location between Jay’s Saloon and Galaxy Hut. The new center on Pershing Drive is not between Jay’s and Galaxy Hut.

  • NoVapologist

    This thing is going to be a complete flop. People have moved on.

    • dave

      and if they haven’t they should. it was a just bar. get a life. why is this even being reported on? this is news? i guess in arlington it qualifies.

      • doodly

        Did you ever go to Bardo or Dremo, Dave? Doesn’t sound like it.

  • Stew Magnuson

    I got an old sofa I am trying to sell. He should take some of his investment money and buy it from me. And this one doesn’t look like it came from an alleyway.
    Dr. Dremos spend $350,000 on its decor? It wouldn’t be Dr. Dremos then, would it.

    • karzai

      Exactly – the whole point of Dremo’s was that it was decidely downscale and not just another of these ultra modern, yuppy, trendy places with high prices.

      With the new pink paint exterior on Mexicali Blues, and then if Dremo’s opens and paints its exterior the same bright blue color it had, we can almost start to replicate Key West right here in Clarendon. Then we can all get rich on our property values…

  • b0rk

    They’d have to get the steel tube back from behind Galaxy Hut too, that thing was awesome in Dremo’s.

  • South Arlington

    I still contend that Dr. Dremo’s being installed into any location on the Orange Line corridor will not be the same old Dremos. With real estate how it is, you just can’t create the divey, cheaper bar environment that Dremo’s used to be. You can’t devote 2-3,000 square feet to just low revenue producing amenities like pool tables, shuffleboard and a movie viewing area like the old Dremos had on the Orange Line and have a successful business.

    I think that an Orange Line location will either be a completely different Dremo’s experience than we all remember and have longed for, or it will just never get financing. Stewart needs to think outside the box if he is going to recapture the Dremo’s magic we wish for. The Ski Chalet would have been the ideal, low rent, big outdoor patio space location in a relatively dense area that could recapture the magic.

    • Brandon C

      Actually the Ski Chalet location would’ve been just as bad in the long term.

      I just came back from the Blues Festival on Walter Reed where all the new apartment buildings that are now on the Pike were hawking their floorplans. $1500 for a freakin’ Studio and $2200 for just a 1-bedroom is going to invite the exact same problems as a Clarendon location I know this sounds like “Well-off = douches” but it’s a matter of demographics and viability.

      The old Dremo’s is dead. At this point, I’ve resigned to hanging out on H Street NE until that too gets completely co-opted by douchebags in sandals.

  • SamsontheCat

    $350,000? They can raise that with a savy fundraising campaign.

    The Dr. Dremo’s Community Imporvement Plan:

    Step 1: Build a dive bar
    Step 2: People who like an eclectic dive bar move to Arlington
    Step 3: People in brown flip-flops get frightened by the people in Step 2 and move away.
    Step 4-6: Property values drop, 99 of the 100 burger/pizza/cupcake places close, more dive bars take their place.

  • I would bet money on the fact that Dremo’s is eyeing Jay’s…

    • ha

      I’ll take that bet….

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