Coffee house closures brew up opportunity for survivors

The closure of some independent coffee houses in the Truckee Meadows created opportunities for others who purchase equipment and furnishings for new locations at greatly reduced prices.

Dreamers Coffee House last week shut its doors after an eight-year run as a Riverwalk anchor tenant, with owner Jonathan Bascom citing high rent as the reason for folding.

And last month popular South Meadows cafe Moxie Java shut down. Owner Debbie Cox says the shop was the victim of lofty rental rates set during the construction boom and big franchise fees from Moxie Java's corporate office in Boise.

But other coffee house owners have secured additional locations based on the availability of cheap equipment hitting the market and their strong negotiating position with high retail vacancies.

Cosmic Coffee last week opened its second location, opening its doors in the Iron Horse Shopping Center at Prater Way and McCarran Boulevard. The 1,424 square-foot space formerly was occupied by It's a Grind.

Cosmic Coffee owner Heather Crow also operates a drive-through kiosk at Kietzke and Moana lanes.

Crow, 34, purchased several pieces of equipment and furnishings from Moxie Java's Cox. She says if she'd opened a similar store five years ago the cost would be tripled. Crow and her husband self-funded the expansion.

"The reason I am able to have a bigger place and second location is because of the bad economy," she says. "I opened my first coffee shop, and six months later the economy crashed. I only know how to run my business in a bad economy.

"You can take a really nice spot and get it for half the price and fill it with equipment from other business owners that need to sell their equipment."

Java Jungle's Matt Polley recently added a small space at West Street Market, as well as kiosks at Reno City Hall and Washoe County Courthouse. Polley took over the coffee house located on First Street near the Truckee River eight years ago.

Polley says that Java Jungle and Dreamers enjoyed the best locations in downtown Reno. Both featured patio areas featuring the sights and sounds of the river. And many of Java Jungle's patrons place high value on supporting downtown businesses, he says.

"In other areas people are real big on Starbucks, and you just can't get past that. They are real big competitor," he says.

Polley says the difference makers in the coffee house business are managing labor and cost of goods, and providing an excel-lent product.

"You must take your coffee very seriously and provide the best product possible," he says. "If people are spending five bucks on a latte, it had better be best latte they have ever had."

Cosmic Coffee's Crow agrees that focusing on top-notch coffee and customer service are two steps a coffee house can take to keep its clientele. "Those things don't cost anything," she says.

Not all expansions work out, either. Polley also knows first-hand about growing too big. Several years ago he opened a bookstore and coffee shop in Truckee that struggled, and after two years he sold the business.

"It's kind of a curse we entrepreneurs have," he says. "We are really big into building our businesses and we take our eyes off the prize and that is focusing in on what we do well."

"Truckee is a tough gig," Polley adds. "It is really best to be a local."

Java Jungle employs just over 20 part time employees, mostly college students.

Cox, former owner of Moxie Java, says she tried unsuccessfully for five months to sell Moxie Java after the corporate office asked her to pony up a $35,000 franchise fee. With a no-compete clause in effect, she decided to just close the business for good.

"Nobody had the cash," she says. "I wasn't asking much, but it just wasn't working."

Cox, who recently started CHAOS, a professional organization and personal assistant service, says independent coffee houses should fare better than franchises; she was paying big bucks to have her coffee shipped from Idaho rather than finding a local vendor.

Despite the recession some Reno-based coffee wholesalers have seen a rise in business.

Tim Curry, owner of Wood-Fire Roasted Coffee Co., says business has increased slightly due to the expansions from his core client base. Wood-Fire does about 80 percent of its business wholesale, Curry says.