New life breathed into old center

Turn into the ‘wrong street’ of the old center and what you find is not a pretty sight. Constant bickering between the City Hall and the construction company in charge of revamping the area led to a protracted delay in the works, which started more than three years ago. Though it may seem a mammoth task, in fact there were only about 14 streets to renovate. However, those which are finished have already been invaded with all sorts of cafes, pubs, restaurants and music clubs. Business Review talked to a couple of investors who have opened businesses in the area.

Otilia Haraga

The old center is starting to live up to expectations and show very good potential for investors keen to open a Horeca business in the area. A myriad of restaurants, clubs, cafes and pubs have appeared like mushrooms after the rain. Many of them have already established terraces and put their tables and chairs right on the street, Paris-style. It’s a good thing the area has been pedestrianized, as being hooted at by a car while having a coffee wouldn’t be anybody’s idea of fun. But little things like this – having a coffee or meal in a historical area, unbothered by anything – will most likely make customers return. As the rest of the streets are finished, new such locations are expected to spread, which will inject new life into the old city center.

“Initially, our decision to open a business in the historic center was nowhere near definite. We had in mind several spaces in various areas of Bucharest. It seems, however, that the space on 14 Gabroveni Street chose us. The history of the building, the interior design, the utilities etc, everything suggested a live music club and completed an image that we, the owners, had built a while back,” says Mihai Paveliu, one of the three owners of Mojo Club. He also cites the change that has taken place in the historical center, which was an important factor in opening Mojo Club there. The club was officially opened to much fanfare last October, with a live show by Romanian band Vita de Vie, who have since launched their newest album, Fetish, at the club.

Read more about

RetuRO opens its 5th counting and sorting center in Bacău County

read more

The space is structured on three levels which cover a surface of 600 sqm. There is the basement, also called the Brit Room, where live concerts take place, which can accommodate 400 people at once. The ground floor is a quieter area, for non-smokers. The mezzanine, called the Acoustic Lounge, was conceived to host live events, stand-up, improvisation or theater shows. Last but not least, karaoke parties with an MC are also held here, with Mojo being the only club in Bucharest that organizes karaoke every day of the week.

The club has around 2,000 customers a week. Mojo’s clients are thirty-somethings, mostly with higher education and medium-to-high incomes. There are some foreign customers but most are Romanian. “I can say that most of our clients enjoy equally old rock, pop, 80s music, disco and the latest releases,” says Paveliu.

Mojo also features Mojo Radio, the club’s online radio channel, which airs non-stop. “Sadly, we noticed that in Romania there are some extremely talented artists who are neglected by labels. Our intention is to promote them too through Mojo Radio,” says Paveliu.

The club owner says the rent for the location is not too high. “I think the price we pay is in line with the area. In fact, I think the owners of the space cut us a very good deal,” he says, without specifying either the price of the rent or the initial investment, which he describes as “pretty high.”

The three investors are already planning to expand the concept to another city. “At the moment, we are pondering the idea of opening a Mojo Cluj, Mojo Brasov or Mojo Galati…” says Paveliu.

Another location that has appeared in the old center is Grand Café Van Gogh (9 Smardan Street) which was opened with the involvement of two equal investors. One of them is Jerry Van Schaik who also manages the building and the cafe. “The other partner wishes to remain silent,” he says.

Van Schaik was one of the initial investors in Amsterdam Grand Café on Covaci Street which he managed for five years. He is also the sole owner of the Rembrandt Hotel, which first opened five years ago. In 2009, the hotel’s turnover amounted to EUR 450.000. “I do not manage it on a day-to-day basis, but I do get involved in the bigger decisions,” he says. The investment that had gone into the location by the end of 2009 was EUR 150,000.

“We are not planning further investments at this time. We would like to renovate the attic as well but we are taking a break from development and concentrating on growing the business,” said Van Schaik. “We expect a full recovery of the initial investment in three years.”

The two investors anticipate a turnover for the cafe of EUR 600,000 at the end of 2010. “Since we opened in October 2009 we’ve had time to test some things and make final adjustments. We started 2010 at full speed,” he says.

The premises total 140 sqm including dependencies. There are 95 seats, including those at the bar. “It’s interesting, Romanians are not very fond of sitting at the bar. That’s an interesting cultural difference I’ve noticed for some time. We created our bar to be just as comfortable as any other place in the cafe – with a bonus of a huge mirror that shows bar-sitters everything that’s going on behind them,” says Van Schaik.

Van Gogh Café is part of a building, the Van Gogh Spaces, which has a total area of 700 sqm. “We chose the name Spaces because it represents the whole building. We wanted to convey that fact that there is no predefined function for any of the rooms in the building – they are all open for whatever purpose the client has for them. The term ‘spaces’ is neutral in terms of function – it is for that neutrality that we chose it,” says Van Schaik.