Rathskeller set to close

[francofan]

I tended bar there in the summer of 83!

I always liked Zeno's. The Skeller, Zeno's, and the Phyrst were my favorite bars in State College. They all have a great history and tradition. I hope that the Skellar continues to exist going forward; but in light of recent developments, that probably will not happen.

 

[LionDeNittany]

The issue is the rent - not the upkeep, right? Even if the building was properly maintained, if the tenants weren’t paying market value the new owners would have forced them out anyway, right?

The building was not properly maintained.
I do not know what would have happened based on your scenario.
Buying a building then having to put a lot of money into it makes it harder to keep a business at below market rates. That's all I would be able to say about out your scenario.

LdN

 

[CF LION]

I tended bar there in the summer of 83!

Then you served me. I graduated in August of 83.

 

[4rosco]

What's wrong with planning to tear it down when you buy a POS from an owner who did not maintain the building?

This was all part of the plan. The previous owner left his longtime tenant and a PSU staple out to dry.

They collected rent for years. Did no upkeep and walked away with 5mm.

LdN

The previous owner could have also protected his long time tenant by having lease in place which new owner would have to accept.

 

[demlion]

The previous owner could have also protected his long time tenant by having lease in place which new owner would have to accept.

So, the new owner waits until the end of the lease and then shuts the Skeller. Not much difference. It's okay though. this University, which used to be for the sons and daughters of the working class of PA, is now only for the rich.

At that, the 9 dollar beers in the New Skeller might be more popular than I think.

 

[LionDeNittany]

So, the new owner waits until the end of the lease and then shuts the Skeller. Not much difference. It's okay though. this University, which used to be for the sons and daughters of the working class of PA, is now only for the rich.

At that, the 9 dollar beers in the New Skeller might be more popular than I think.

Skellar is not part of the University.
Why don't you get a group of people together... buy the building for $6mm and keep the skellar alive?

Or better, how about just providing your credit card every night so students can get cheap beers?

LdN

 

[4rosco]

So, the new owner waits until the end of the lease and then shuts the Skeller. Not much difference. It's okay though. this University, which used to be for the sons and daughters of the working class of PA, is now only for the rich.

At that, the 9 dollar beers in the New Skeller might be more popular than I think.

Running a business on basically a month to month lease for 6 years is not a smart way to run a business.

So should the owners of the Skeller be entitled to stay in the building as long as they want and under their terms?
It's like any other business they could pay the market rate for the spot or someone else will. They had an opportunity to buy the building as well but didn't.

 

[PeetzPoolBoy]

I'd much rather blame the party who is actually kicking the Skeller out - the current owners - than the party who did not kick the Skeller out. The Herlochers had (and still has) the opportunity to not kick the Skeller out, but chose to do so anyway because they believed they would make more money with a different tenant. That was a choice, and they're learning that such a choice has consequences. I believe those consequences are richly deserved, and it seems like most have also seen right through their smarmy "we're actually the good guys!" PR spin.

Can I borrow $5 million from you and pay you back at a rate of $5,000/month? $5,000 is a decent payment and should make you a happy investor

 

[LionDeNittany]

Running a business on basically a month to month lease for 6 years is not a smart way to run a business.

So should the owners of the Skeller be entitled to stay in the building as long as they want and under their terms?
It's like any other business they could pay the market rate for the spot or someone else will. They had an opportunity to buy the building as well but didn't.

I can't imagine how angry people were when the building owners kicked out a tenant to open the Skellar.

LdN

 

[Raffycorn]

Can I borrow $5 million from you and pay you back at a rate of $5,000/month? $5,000 is a decent payment and should make you a happy investor

When did the Skeller borrow $5M from the Herlochers?

 

[demlion]

Running a business on basically a month to month lease for 6 years is not a smart way to run a business.

So should the owners of the Skeller be entitled to stay in the building as long as they want and under their terms?
It's like any other business they could pay the market rate for the spot or someone else will. They had an opportunity to buy the building as well but didn't.

But the solution you proposed--having a lease in place--would simply delay the inevitable. The need to churn dough out of every scrap of Real Estate in SC has long been the primary driver in town. OK, so a little more of the magic of the place is gone. Like I said, for a long time poorer students have been getting priced out. This is just a more visible sign of the times.

 

[4rosco]

But the solution you proposed--having a lease in place--would simply delay the inevitable. The need to churn dough out of every scrap of Real Estate in SC has long been the primary driver in town. OK, so a little more of the magic of the place is gone. Like I said, for a long time poorer students have been getting priced out. This is just a more visible sign of the times.

And what is you solution let them stay there forever based on the rental rate from 2011?

 

[LafayetteBear]

I was told this last month by another interested party who was looking to pay in the 4 million range. The apartments upstairs are apparently crap as well, haven’t been updated in 40 years.

Well, if the rest of this building is as dilapidated as the basement (i.e., the Skeller premises), and the rents are reflective of that (i.e., WAY below market), I suppose it is possible that no rent roll was provided. The notion would be that the buyer is gonna gut the place, completely update and remodel it, and re-rent it at current market rents that bear no relation to the existing rents, so who cares about the old rents?

The only problem with that is the fact that the buyer takes the building subject to any preexisting leases, and some of them may have several years left to run. So the duration of those leases (and the rent payable thereunder) would still be highly relevant information for a prospective buyer.

 

[demlion]

And what is you solution let them stay there forever based on the rental rate from 2011?

Not my place to have a solution. I can think this is horsecrap without having a better plan that will work. Things can suck without my having to fix them. It is just a sign of the erosion of the values that once made psu somewhat different.

OTOH I never claimed that a lease would have fixed this, like you did. Obviously, the low priced Skeller wont work in a high rent district. So, adios, i guess.

 

[PeetzPoolBoy]

When did the Skeller borrow $5M from the Herlochers?

My point being that if someone invests or loans $5,000,000 they are going to reasonably expect a decent return on their invested capital. Having tenants paying below-market rates isn't going to generate such a return on investment.

Why aren't any of the other tenants in this same building (Clothesline, Apple Tree, Olde Main Frame Shop, Sadies) crying about the change of ownership?

 

[gogolion]

At that, the 9 dollar beers in the New Skeller might be more popular than I think.

State College is still a very affordable town, at least when it comes to alcohol prices. My son goes to Mizzou and I figured visiting Columbia would entail cheap pitchers of beer and mixed drinks. No sir. It was no cheaper than your average bar where I live in the suburbs of Chicago. So I figured the days of cheap beer in college towns was over. But then I visited State College and was treated to $5 pitchers and $7 32 oz. Captain and Cokes! And this was on a game weekend when drink specials were not in effect!

 

[4rosco]

Not my place to have a solution. I can think this is horsecrap without having a better plan that will work. Things can suck without my having to fix them. It is just a sign of the erosion of the values that once made psu somewhat different.

OTOH I never claimed that a lease would have fixed this, like you did. Obviously, the low priced Skeller wont work in a high rent district. So, adios, i guess.

And it is not the new owners place to find a solution for students to have a cheap place to drink. They are running a business to make money,

I see they owners of the skeller are opening up a new restaurant in Bellefonte. I wonder if they are going to be paying below market rates for rent there?

 

[heckmans]

What's wrong with planning to tear it down when you buy a POS from an owner who did not maintain the building?

This was all part of the plan. The previous owner left his longtime tenant and a PSU staple out to dry.

They collected rent for years. Did no upkeep and walked away with 5mm.

LdN

To be clear, the bldg is not being torn down. Herlochers have poured a ton of money into improvements. It was other potential buyers that were looking to tear it down. The herlochers, by nature of buying it, saved it from being toen down.

 

[LionDeNittany]

To be clear, the bldg is not being torn down. Herlochers have poured a ton of money into improvements. It was other potential buyers that were looking to tear it down. The herlochers, by nature of buying it, saved it from being toen down.

I understand that. My point is more general but thank you for the clarification.

In Jacksonville there's a new steakhouse. It's called the Cowford.

The owner bought the building with the agreement of keeping it as a historic landmark. The steakhouse was expected to open summer 2016.

Fall 2017 the steakhouse opened. Cost about $10mm due to many factors (About 6mm over budget) and 18 months over time budget. That restaurant will take about 30 years to turn a profit now... if ever.

The new Skellar owners took a lot of risk by not knocking it down and should be commended

 

[Raffycorn]

And it is not the new owners place to find a solution for students to have a cheap place to drink. They are running a business to make money,

I see they owners of the skeller are opening up a new restaurant in Bellefonte. I wonder if they are going to be paying below market rates for rent there?

Great. And it isn't the public's place to help them continue to make money either on this investment or in their current business. The free market is speaking with a whole bunch of angry customers and community members vocalizing exactly how they feel about the actions of the company and the people who run it.

They made the choice to buy this building, they're making the choice to evict the Skellar, and they assumed the completely foreseeable risk of the backlash that would result. I sincerely hope that the market rates they'll collect going forward will have been worth all the trouble.

 

[heckmans]

No one held a gun to his head to buy the building. The notion he "saved" the building frpm the wrecking ball is pure PR BS. Glad you're his buddy and he has you to promote that narrative but people who are not his pals can see right through that garbage.

Chris, seriously, you don't know what you are talking about. Other interested buyers planned to tear the bldg down. Herlocher's offer was accepted in part because they planned to preserve the bldg. You are making assumptions that the skellar acted in good faith and Herlocher did not. You have no way of knowing that, just as I do not.
You have no idea what the skellar was paying in rent since their lease ran out in 2011 and you have no idea what Herlochers looked for during negotiations, just as I do not. Glad you can "see through it" though.
And frankly, the notion that the Herlochers are some big bad corporation and the Skellar/spats are helpless small business owners is comical. Herlochers have a small, family-owned LLC. They make mustard and own some real estate. They've been a part of the State College community for 40 years.

 

[heckmans]

I lived in one of those apartments 28 years ago and they were average, at best, at the time. If they haven't been updated since then they must be total dumps.

They weren't touched. They were gross when my friends lived in one from 94-99 and they haven't been touched since then either. Its estimated that is been 40-50 years since any renovations have been done.

 

[4rosco]

They made the choice to buy this building, they're making the choice to evict the Skellar, and they assumed the completely foreseeable risk of the backlash that would result. I sincerely hope that the market rates they'll collect going forward will have been worth all the trouble.

Yes they made the choice and invested the money into buying the building. Its their building now and they can decide what they want to do with it. If you and others decide not to be patrons of the new businesses that open there that is your choice,
It is also their choice on who they want to be tenants of the building not your's or anyone else.

 

[anon_xdc8rmuek44eq]

Great. And it isn't the public's place to help them continue to make money either on this investment or in their current business. The free market is speaking with a whole bunch of angry customers and community members vocalizing exactly how they feel about the actions of the company and the people who run it.

They made the choice to buy this building, they're making the choice to evict the Skellar, and they assumed the completely foreseeable risk of the backlash that would result. I sincerely hope that the market rates they'll collect going forward will have been worth all the trouble.

Might I suggest...

 

[bkmtnittany1]

Then you served me. I graduated in August of 83.

Yup! I remember when Zeno's got a table in the bar. The Collegian actually printed an article about it!!! I loved my interview prior to getting the job, the mgr knew I had experience but said to me, "Do ya know how to pour beer?" I said, "Well yes I do."(Like no duh!) "Do you know how to pour shots of whiskey?" "Well, yeah I do." "Good, be here Fri at 3." "But sir, what if someone wants a Mai-Tai or a Manhattan?" "Tell 'em to go to the effin Corner Room!"

 

[kts136]

Great. And it isn't the public's place to help them continue to make money either on this investment or in their current business. The free market is speaking with a whole bunch of angry customers and community members vocalizing exactly how they feel about the actions of the company and the people who run it.

They made the choice to buy this building, they're making the choice to evict the Skellar, and they assumed the completely foreseeable risk of the backlash that would result. I sincerely hope that the market rates they'll collect going forward will have been worth all the trouble.

The free market already spoke did it not? Building went up for sale, someone bought it, a discussion was had regarding rents and the Skeller, as a result of either turning down the proposed rent or being unable to afford it, will no longer be there.

How many of these people in the community that are so outraged actually frequent the Skeller on a regular basis? I can count on one hand the amount of times I actually entered the Skeller as a student, place was a hole then and I'm sure it is even worse now, and the 8 or so weekends a year that the Alumni return to relive their glory days are not nearly enough to keep a bar open.

I understand people being upset that such a historic old site with many fond memories will be going away, but unfortunately that's how it works. The Skeller will be replaced(or maybe even renovated and reopened with the same name by someone new, who knows!) and the constantly changing free market of the current students, who have no heartfelt attachment to the Skeller, will determine if the new place is worthy of staying open. Heck, it may even be clean, fun and make enough profit to afford the rent!

 

[NitNE73]

I went to Penn State from 1974-1978. I can personally attest that Zeno's was in operation during the mid 1970s.

Yep..74-78 is the mid 1970s, n'est pas?

 

[Sharkies]

The free market already spoke did it not?

To play devil's advocate, wouldn't the free market also state that if one is upset with it, we can leave negative reviews and boycott buying their products? Not saying I did so (I did not, actually), just that is also part of the free market. Negative backlash has an economic cost.

 

[demlion]

To play devil's advocate, wouldn't the free market also state that if one is upset with it, we can leave negative reviews and boycott buying their products? Not saying I did so (I did not, actually), just that is also part of the free market. Negative backlash has an economic cost.

Sometimes the free market can continue to speak, especially when the real estate investors are also selling mustard at retail and hyping Penn State while at the same time cutting away experiences that lots of PennStaters remember with fondness.

 

[Sharkies]

Sometimes the free market can continue to speak, especially when the real estate investors are also selling mustard at retail and hyping Penn State while at the same time cutting away experiences that lots of PennStaters remember with fondness.

I would say, exactly. As the facts appear, the Skeller was paying below market rent and were unwilling to go higher or enter into a lease agreement. That's fine! But there is a cost to the new Landlord for being unable to come to an agreement with them (in this case, it's negative reviews, etc). There also would have been a cost for a different owner to buy the bldg and demolish it completely. But I assume the Herlochers did an economic analysis that said our inability to reach an agreement here is outweighed by our ability to continue to sell mustard and get a new tenant. The free market at work...

 

[dbsteel]

No. I've gotta admit that it struck me as a firetrap. But they could have sprinklered it, or taken other measures to improve the fire safety there. It just seems like a huge waste to shut it down an institution that HAD to be making decent money. If they put it some kind of brand spankin' new bar, it will be a disaster in every way, and they surely know it.

Whatever. In the end, its just an old bar. I can't tell you how many times I was in the far back of that place, totally packed, thinking what would happen if it caught on fire. I probably frequented other places more (and I did a lot of frequenting) because that place was just too crowded and hot and not really all that nice.

The new owners bought it legally..... they can do whatever they want. I'm sure people can find another fun and cheap place to drink. They have no obligation to keep it as is due to our "memories". Half the people that are pissed will never step foot in that place again.

 

[demlion]

Whatever. In the end, its just an old bar. I can't tell you how many times I was in the far back of that place, totally packed, thinking what would happen if it caught on fire. I probably frequented other places more (and I did a lot of frequenting) because that place was just too crowded and hot and not really all that nice.

The new owners bought it legally..... they can do whatever they want. I'm sure people can find another fun and cheap place to drink. They have no obligation to keep it as is due to our "memories". Half the people that are pissed will never step foot in that place again.

And for some of them it will be on purpose, because they will not forgive those who insisted that it go away so they could have one more fabulous bar for middle aged people.

 

[LemonEars]

My favorite Penn State bar in the 1967-70 time frame was the Futura on Beaver Avenue. What ever became of that place? It was dingy and dull but had the cheapest beer in town and was nice and close to my apartment on Pugh Street.

 

[4rosco]

And for some of them it will be on purpose, because they will not forgive those who insisted that it go away so they could have one more fabulous bar for middle aged people.

I don't think a middle age is the type of client they are concerned with. They want to cater to the students who go to school there and not someone who comes a few weekends a year during football season

 

[demlion]

I don't think a middle age is the type of client they are concerned with. They want to cater to the students who go to school there and not someone who comes a few weekends a year during football season

I guess we shall see.

 

[dbsteel]

And for some of them it will be on purpose, because they will not forgive those who insisted that it go away so they could have one more fabulous bar for middle aged people.

What I probably should have said was 90% of the people that are pissed haven't stepped foot in that place in 20 years and had no plans to do so ever again.

 

[BBrown]

I can't imagine how angry people were when the building owners kicked out a tenant to open the Skellar.

LdN

Depends on if they were for Prohibition or against it.

 

[Tom McAndrew]

My favorite Penn State bar in the 1967-70 time frame was the Futura on Beaver Avenue. What ever became of that place? It was dingy and dull but had the cheapest beer in town and was nice and close to my apartment on Pugh Street.

I'm pretty sure that became the Brewery @ 1973

 

[BBrown]

What I probably should have said was 90% of the people that are pissed haven't stepped foot in that place in 20 years and had no plans to do so ever again.

Thats probably true and from what I hear from others the students didnt' even go to it much.
I graduated in '85 and would go to it occasionally but our hangouts were Nellos, Stoney's Post House, Train Station/Whistle Stop/Yard, Brick house, Zeno's and The Brewery.
Yea we did a lot of drinking my sr. year. LOL.

 

[NittanyChris]

My point being that if someone invests or loans $5,000,000 they are going to reasonably expect a decent return on their invested capital. Having tenants paying below-market rates isn't going to generate such a return on investment.

Why aren't any of the other tenants in this same building (Clothesline, Apple Tree, Olde Main Frame Shop, Sadies) crying about the change of ownership?

And who, exactly, forced them to invest $5 million?

The answer is, no one. They should have never bought the property knowing they would shut down an iconic institution of SC. Of course, they really didn't care about that at all did they? Just The almighty buck.