Kelley Brothers Brewing Co. was the toast of downtown when it opened 12 years ago.
The conversion of the burned out shell of the El Rey Theatre that stood as a scar on the city’s heart for 24 years was hailed as the marquee investment for a new downtown.
It was where 1,000 tickets sold virtually overnight for the Party of the Century as Manteca celebrated the dawn of the 21st century just as the economy was starting to go into overdrive. Storefront vacancies in downtown - and elsewhere in Manteca - were rare finds.
Today it is a different story. Kelley Brothers – like other restaurants and businesses – has been hammered by the Great Recession. There is a liberal sprinkling of empty storefronts around town. Kelley Brothers’ Joe Kelley and Mark Abram have struggled to keep going.
Now they fear the writing is on the wall. Unless they see a modest rebound between now and Dec. 31, the new year may usher in a towering vacancy on the downtown landscape as Kelley Brothers may shut their doors.
“We’re not looking for a ‘Wonderful Life’ type of miracle,” Kelley said. “We’re just hoping that people who haven’t stopped by in a while will do so and hopefully we’ll get a 10 percent increase in business.”
They have a plan “B” that involves selling their businesses launched in 1999 with a $2.1 million investment for $300,000.
Selling - if they can’t generate enough revenue to justify continuing as Kelley Brothers- is their preferred alternative.
Kelley noted if they close their doors the equipment would all be liquidated meaning the building – designed specifically for a brewery and restaurant inside of the former shell of the El Rey – would likely sit vacant again for years.
The prospect of Kelley Brothers closing wasn’t viewed as good news by neighboring businesses whose owners view the brewery as an attraction that brings potential customers downtown.
“Losing Kelley Brothers would be a big bit,” noted Manteca Chamber of Commerce Chief Executive Officer Debby Moorhead who also serves on the City Council.
She described it as a “backwards step” for downtown.
Moorhead noted the chamber often will suggest Kelley Brothers and other independent restaurants in Manteca when they get inquiries from out-of-town visitors who want to try a non-chain restaurant. The latest was just a few weeks ago from a couple from Texas on their way to Yosemite.
Manteca’s biggest restaurant
At more than 350 seats, Kelley Brothers is Manteca’s biggest restaurant. They had 50 employees at one point. They are now down to 22.
Kelley noted they have relatively strong weekends thanks to Big League Dreams tournaments.
“We’re the only place in town that can really hold big groups,” he said.
Their dinner service is decent although it is down just like weekends. The big killer though is the lunch trade. Once in awhile it is strong but there are days when it is virtually non-existent.
“We’re no different than a lot of other restaurants when it comes to lunch trade during the week,” Kelley said.
Kelley said the first two quarters are always the strongest from January through June. Summer is typically the weakest and the fourth quarter picks up.
They did a lot of juggling to make it through the last three months. They have 75 percent of their capacity for holiday parties booked.
If they don’t see an upward trend over the next three months, given their particular finances, they doubt that they’d be able to gamble on just how strong the start of the year will be for them.
In essence, they have calculated just how far they can push the financial envelope. And whether they hold or fold depends on October, November, and December sales.
Reaching five years is considered rare in the restaurant business. Kelley Brothers has gone for 12 years so far.
“It may take the Great Recession to bring us down,” Kelley said.
Kelley Brothers eliminated an albatross for downtown when it opened. The city back in 1991 was told by a consulting firm that it would cost $500,000 to buy and level the property and have nothing to show for it except a vacant lot.
The city toyed with a number of ideas including using redevelopment agency funds to finance an office building on the cite given that it was just yards away from the physical and psychological heart of the city – Yosemite Avenue and Main Street.
El Rey Theatre first opened 74 years ago
When Joe and his original partner and brother Shon Kelley came up with the brewery plan, they were able to cobble together most of the $2.1 million except $250,000.
The redevelopment agency made a 10-year loan on the property that has been paid off with interest ahead of schedule. They also met sales tax targets and employment levels that the city imposed to avoid paying even higher interest. Just months after the loan was paid off the Great Recession hit.
The El Rey opened 74 years ago with great fanfare on April 15, 1937 at the height of the Great Depression at a cost of $110,000.
The 900-seat, air-conditioned theater dubbed “The House of Courtesy” was complete with bathroom tiled floors and art on the walls with ceilings accented with gold leaf. Its marquee was crowded with big name, first-run movies.
The El Rey Theatre had a 48-year run as Manteca’s major source of commercial entertainment until it was gutted by fire on Aug. 6, 1975 after the screening of “The Towering Inferno.”