Twenty-two years ago, restaurateur Frank Bonanno opened Mizuna near the corner of 7th and Grant in Cap Hill. Since then, he’s added three more restaurants next to it.
All the while, he talked to his landlord about the possibility of buying the real estate.
“We’ve made offers every couple of years, probably every time we renewed a lease,” Bonanno said.
“He certainly asked more than half a dozen times, but it was always the same answer: that ownership has no plans of selling,” said Hal Naiman, president of the Sherman Agency, which was part of the ownership group.
But that changed recently. On Sept. 16, the owner of Bonanno Concepts purchased the three adjacent buildings that house Mizuna, Luca, Lou’s Food Bar and Vesper Lounge. He paid $8.6 million for the property, which also includes a half-acre parking lot to the north, according to public records.
Naiman said he’d received an offer from a developer, and gave Bonanno the chance to essentially match it.
“They had a number in mind,” Bonanno said. “They weren’t going to budge, and we were able to meet their number. There was very little negotiating.”
The Naiman family and partners have owned the properties for 60 years, according to Naiman.
In February last year, the group applied to the city for a certificate of demolition eligibility, which would have made it easy to demolish the structures on the property within a five-year window. Notices of the application were posted in Bonanno’s restaurant windows, prompting neighbors to consider a push for preservation. Naiman ultimately withdrew the request in April 2021.
“We were told that if we were going to sell it, most any developer was going to need to go through that process and it was recommended we go through it,” Naiman said. “But we started going through it and kind of got black eyes through it, not knowing the process.”
Bonanno’s restaurants are in an area of Cap Hill known as Governor’s Park, where apartment developers have recently been buying property for large complexes. One is under construction a block away, where Racines restaurant used to be. Another is planned for the block occupied by TV station Denver7, which is plotting a relocation to RiNo.
Bonanno said he’s relieved that the property didn’t sell to a developer and wipe his restaurants away.
“We feel a sense of relief knowing they aren’t going to be knocked down and we have to start from scratch,” he said. “We’ve already had developers come and talk to us about buying the properties since we purchased them. The hardest part would be to rebuild those restaurants because even if they are brand new, there is a flat line of how much more revenue we’d get and whether or not that would justify rebuilding a new restaurant.”
Bonanno added, “It would probably cost $1.8 million to reopen Mizuna and take up to five years to get that money back. So, we’d rather just have our restaurants pay higher rent and be our own landlords”
Bonanno and his wife Jacqueline got a loan from FirstBank to make the purchase. He said his mortgage is higher than what his rent had been.
“The only reason we chose him was because of the relationship we had,” Naiman said. “All things being equal, the other developer was going to meet everything we needed, and actually they were a stronger buyer because they didn’t require getting a loan, where Frank did. So in a way, we took a risk to help him accomplish that.”
After the sale, the Naiman ownership group paid $3.6 million for retail buildings a half mile away at the corner of 9th and Lincoln, records show.
“From a seller’s standpoint, we didn’t want to just pay capital gain,” Naiman said. “We wanted to do 1031 Exchange, so it took us three quarters of a year to find properties to invest into and a rental return that made sense.”
Bonanno previously owned the real estate for Lou’s original location in Sunnyside, which he sold in 2017 to open Milk Market downtown.
Now that the Bonannos are their own landlords once again, Bonanno said he plans to add a patio to Luca, replace Luca and Vesper’s swamp coolers with air conditioning and try to get full-time street closure for the block. He also plans to monetize the parking lot and has contracted SpotHero to manage it.
“Nothing is going to happen overnight,” he said. “We have a three-to-five-year plan, but we just feel lucky that we get to continue to carry on.”