Where I Stand

RESTAURANT ANALYSIS AND CONCLUSION ( $300.000) Annual Loss is OK? By Robert Stern SCA resident In January 2020 SCA produced a Restaurant Business Plan for a self-managed restaurant and that evolved into Yorktown Grille via a contract with Western Hospitality. The original plan did not include any market research as to measure how many residents would utilize it and to what extent because it didn't matter. The board had already made up its mind. The plan states " The restaurant will be an amenity. As with other amenities, it will not be expected to make a profit." The only statistic to theoretically justify the decision is a survey of residents that included 3600 responses and 2304 favorable. The board concluded," A self-managed restaurant, however, can be successful." What we have here is a pre-ordained conclusion based on a philosophy that includes a restaurant as an amenity." The plan speculates that worst case a $300,000 loss annually or $42 per household is acceptable. And that spending $500,000+ from reserves and operating budgets beginning in 2020 for startup costs is no problem. FOLKS, ELECTIONS HAVE CONSEQUENCES! Not that it matters but here is a little financial analysis from that original plan and some of their assumptions used. Understand that with inflation alone the numbers for costs and prices will likely change. Sales are divided into 3 categories: Restaurant, Bar and Catering. 1. Catering is listed at $210,000 per year operating at a 33% gross margin 2. Bar expands based on a meals per day marker which is the basis for the spread sheet. 70% gross margin. 3. Restaurant spreads from 70 meals per day to 160 meals per day at a 60% gross margin. All labor is separate Only Lunch and Dinner are budgeted. No breakfast. Lunches are budgeted for sales at $12-$14 per meal and dinner $14-16 excluding tax and tip and alcohol at dinner raises dinner to $20. The plan may have changed. If the 70 meals a day model is used that will generate a ($300,000) annual loss. A ($26.700) annual loss at 140 meals. We do not know the mix of couples and singles in the 2304 residents that responded favorably but let's look at how many times a year these 2304 (assuming they are our population as we have no other number) will visit and spend as per plan. At 140 meals a day these 2304 homeowners would need to visit 22 times per year to lose the $26,700. If they, (2304) only visited 11 times a year the loss would be the ($300,000). And with lots of variables the downside could be worse. It could also be better. Pickleball courts. swimming pools and fitness equipment are pretty easy to predict and control costs. A restaurant isn't your typical amenity. I could go on and on but let's remember your board of directors stated in January 2020: " The restaurant will be an amenity. As with other amenities it will not be expected to make a profit" And that's the bottom line. Do you support that premise? For me I have been very vocal in my opposition to this very bad idea and financial irresponsibility. We cannot recover the money already spent. It's an unnecessary and very costly amenity. The best vote is to boycott the restaurant, so it fails quickly and put an end to it. Otherwise, it will bleed us for a couple years and then fail maximizing our loss. Elections have consequences. I'll vote for candidates that will stop the bleeding. You decide.