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Liquor License Transfer Approved for New Downtown State College Restaurant

by on July 16, 2019 8:49 AM

State College Borough Council on Monday approved a liquor license transfer for a new restaurant at the former location of Spats Cafe and Speakeasy.

After a public hearing on July 1 and discussion at a work session last week, council voted 4-1 to approve the transfer to AKE Enterprise's Queenstown New Zealand restaurant without any restriction on the ratio of food to alcohol sales. Council members Jesse Barlow and Catherine Dauler were absent. 

The restaurant will be located in Spats' former space in the Foster/Gentzel Building at 142 E. College Ave., as well as the adjoining space at 138 E. College Ave., where The Clothesline apparel outlet was located and which is moving to the former Apple Tree storefront next door. It also will include 114 S. Pugh St., above Sadie's Waffles in the connected Homerella Building.

Queenstown will be open seven days a week and will serve breakfast, lunch and dinner. Proprietor and Centre County resident Martin Gillespie, who is opening the restaurant with his wife, Deanna, said ideally he would like to open in October but that it is dependent on renovations and code approvals, so may take longer.

A focal point of the previous discussions had been concern about adding another liquor license in the borough. The restaurant liquor license is being transferred from Moerschbacher Enterprises, which had held it at the former Celebration Hall in College Township. 

Intermunicipal license transfers first require the receiving municipality's approval when it has more than one liquor license per 3,000 population. State College has 48 retail establishments that sell alcohol, including 26 bars and restaurants operating under 19 restaurant liquor licenses, according to Tom King, assistant borough manager. Under the one per 3,000 quota, the borough would have 14 restaurant liquor licenses.

King suggested that the license be approved but with several restrictions, including a ratio of 65 percent food sales to 35 percent alcohol, which would make it more difficult to change the restaurant into a bar in the future.

Gillespie said the restaurant will be upscale and not a bar. He asked that no restriction be placed on the food-alcohol ratio because he wants to be able to offer high-end wine, champagne and liquor, but the ratio would be quickly skewed when someone bought a $200 bottle of champagne with a $50 meal.

"I’m 56. I don’t want to deal with the headaches or the liability of a bar," Gillespie said in a recent interview with "I certainly understand they don’t want to have a lot of people come in, say they’re going to be a restaurant and then flip it into a bar. There’s a ton of bars here, and I don’t want to compete with them.

"I’d just hate to get into a situation where you’re worried about calculating numbers instead of worrying about operating."

Gillespie and two business partners operate five Queenstown restaurants in San Diego, Calif., and he said none of them have become primarily drinking establishments, even though it would be more profitable to do so. He also noted that Spats had operated with an unrestricted license, which is now being held in safekeeping by Spats' and Rathskeller's former owner Duke Gastiger.

Council approved the liquor license transfer with no ratio restriction, but several other conditions: It cannot be transferred to another entity in the borough without council approval; it is limited to the three street addresses of the restaurant with the possible exception of expanding in the future to 118 S. Pugh St. where Sadie's is now located; alcohol sales are not permitted when food is not available; and the facility cannot be rented out to a third party.

Councilwoman Theresa Lafer was the sole vote against.

"I think you have a lovely idea for a restaurant and I would be perfectly happy if that restaurant also included a percentage that made it realistic that you would remain a restaurant and not turn rapidly into a tavern or bar," Lafer said.

Gillespie said his goal is to help lift up the downtown dining scene while making the Foster Building an iconic location similar to the Hotel State College building on Allen Street and College Avenue.

A retired orthopedic surgeon, Gillespie spent much of his youth in State College before leaving during high school when his father's job with Piper Aircraft took them out of the area. Deanna Gillespie was also born and raised in State College and both graduated from Penn State, where Martin was a gymnast and Deanna a champion equestrian.

Martin Gillespie said his ties to local dining businesses started in his youth, when he worked for Dante's Italian restaurant and for the Cocolin family at The Arena, now the site of Primanti's, and when his mother was a quality control specialist for that The Arena and the Cocolins Kentucky Fried Chicken franchise.

"I grew up in the industry. It’s something I always liked and always will like," he said. "Great food and a great place is a great thing."

After attending medical school at Georgetown on an Army ROTC scholarship, he spent four years treating military personnel in Texas then was chief of sports medicine at the University of Texas-San Antonio. Eventually his career brought him back to the east coast and Pennsylvania.

When his friend Matt Baker took a trip to New Zealand and returned with the idea for a New Zealand restaurant, Gillespie joined as a limited partner with his brother, P.J. Lamont, and Baker as operating partners.

That led to five successful restaurants in San Diego, all of which have variations in design and menu. But Gillespie said he always wanted to bring one to State College. He said he looked at spaces in some of the new buildings in town but none felt right. When the Herlocher family purchased the Foster Building and the space became available, he knew it was the right fit.

He began negotiating the lease in December and said the Herlochers have been accommodating in allowing the Gillespies to make improvements to the building to fit their vision.

"We’re putting a lot of money into an old building that’s a historic building downtown," he said. "When this became available, I was very happy about it... You have a landlord that’s a willing participant in helping facilitate getting things done. We have a restaurant concept that’s great. New Zealand food is great.  You’re going to find a meal that you’re comfortable with but not feel like ‘Oh it’s so eclectic…’"

The Herlochers, he said, liked the Queenstown concept -- in terms of menu and design -- because it is unlike anything else in town.

"That’s what they wanted," he said. "They wanted something unique down here."

Queenstown will be most closely modeled on the Queenstown Public House restaurant in San Diego, which Gillespie described as "subtle and warm" and "clean and comfortable." While southern California offers more opportunity for outdoor seating, renovations for the new restaurant are intended to make it feel like part of the downtown and inviting to passersby.

Most of the seating will have outdoor views and the ability to see inside from the street, with large windows along College Avenue and Pugh Street. Expanding into the neighboring space and moving the staircase to the upstairs apartments will give the restaurant an open feel. Above Doggie's Pub, plans for deck seating would overlook Doggie's entrance patio and the new outdoor garden. That will connect to the space above Sadie's, which can be used as a private event room, additional seating on busy nights or a gathering space, Gillespie said.

That room is also serviced by an elevator which goes down to Calder Way just across from the Pugh Street garage. A new handicap entrance is also in the works. Gillespie, who broke both of his ankles in an accident and spent time in a wheelchair, said he knows the importance of ensuring the restaurant is accessible and inviting to all.

The menu, meanwhile, will draw on other Queenstown restaurants, but like those also will have its own unique selections. The restaurant will offer a variety of price points for meals ranging from burgers and salads to fish and steaks. Gillespie said food will be locally-sourced as much as possible.

"We have five restaurants with five different menus," he said. "If we have one thing not working at one, we have options to change it out fairly easily and quickly without recreating the wheel. We have a core base for about a quarter of the menu but we haven’t different things at different places. We can change it up and keep it fresh."

The restaurant will employ at least 50 people, and Gillespie said it will offer much flexibility for staff, from full-time employees to those who only work a few hours a week.

"You have to invest in your building and you have to invest in your employees, because they will invest back," he said.

While Queenstown may be a competitor with other local restaurants, Gillespie said he sees them all as teammates in a joint effort to draw more of the community downtown. Each of their successes, he said, will benefit the others.

"I grew up here. I love the Allen Street Grille. I love the Tavern," he said. "We want to try to get the community more involved in downtown. We used to have a lot more options...but we have a lot of population that don’t come here because they don’t feel they have the options. If all the sudden they feel 'Hey we have an option,' then we walk to the next one."

Gillespie said he has already spoken with Doggie's owner Tom Trosko about providing food service to the bar. He added that he hopes the improvements to the building and new restaurant concept will be a landmark for the corner and the downtown.

"It’s about re-establishing the corner," he said. "I want it to be an icon, just like the Hotel State College and the Corner Room. There’s no reason it can’t, and it should be. I wanted to maintain it. I didn’t want to go into a big box and try to make it cool with decorations.

"I’m doing this because it was my dream to have one back here and I have a great opportunity with a great landlord. It’s something I can leave to my kids and that can be iconic."

Geoff Rushton is managing editor for Contact him at [email protected] or find him on Twitter at @geoffrushton.
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