Mackay Restaurants

When you think fine dining, several restaurants that come to mind have something in common. They're part of Mackay restaurants, owners of El Gaucho, Waterfront Seafood Grill, Sea Grill, Troiani and Inn at El Gaucho. Mackay is a family-owned operation that has been expanding over the past few years and is planning more. In October of 2005, Chad Mackay took the reins as president and COO, concentrating on day-to-day matters, while his father, founder Paul Mackay, acts as chairman and focuses on expansion of the El Gaucho concept.

Chad worked in the restaurant business from a fairly young age, learning various jobs such as busser, server, prep cook and chef. Before coming into the Mackay fold this time, he worked as a business and technology consultant for nine years. Prior to becoming president and COO of Mackay, he was their vice president of business operations.

Chad Mackay, courtesy of Mackay Restaurants

Because family is so important, Chad and Paul didn't take working together lightly. "We're both complete optimists, which is why we're in the restaurant business," laughs Chad. "But we made sure we were prepared for failure. If everything went wrong, we had to make sure we were still happy to be with each other for holidays and family get togethers. That was the most important thing." They used a business coach, Howard Lieberman, to help them see each person's point of view. "Having different viewpoints actually gives you power, as long as you can communicate," says Chad. "Both my wife Jennifer, and dad's wife, Gail, are very involved. They have great taste and tastebuds and are able to give us more of an ‘outside' view since they're not at the restaurants every day. When I became COO, the most unexpected thing was how little changed. We were already working at that level with each other. My dad and I have a great partnership."

El Gaucho was brought back by Paul who had worked at the original as a dining room manager in the 70s (the restaurant was open from 1953 to 1985). He loved the idea of treating each guest as a VIP and offering tableside service. "What dad brought back was the memory of El Gaucho," says Chad. "Its old-school service, tuxes and the charcoal grill. It isn't a pretentious place or stuffy—it's fine dining and fun." Because it was one of the few places that was open late, it had a diverse customer base. "There were bikers and fishermen and movie stars," recalls Chad. "They'd look at each other and say ‘hey, what are you doing in my place?' Back then, bank presidents weren't out at 11 at night."

Paul brought El Gaucho to Belltown when Belltown still had quite a scruffy side. By offering valet service, guests didn't have to park and walk through iffy areas; they simply got out of their cars and walked in the front door. With no windows, the restaurant offers an enclosed club-like world of fine dining and relaxation. It became a hot spot quickly. Paul went on to open El Gaucho Portland in 2000 and El Gaucho Tacoma in 2002.

El Gaucho tableside service, courtesy of Mackay Restaurants

They now have plans for a Bellevue El Gaucho, but don't get overly excited just yet. Construction should begin in 2008 and they hope to be open in early 2009. It will be part of Washington Square and they will basically have a freestanding building surrounded by a hotel, residence towers and an office tower. "In the last nine months," says Chad, "Bellevue happened. There are 10,000 counts a week that didn't exist a year ago. That's a huge loss in restaurant revenue for Seattle."

"We're looking up and down the coast for logical places for El Gaucho," explains Chad. "We look for an urban focus and in areas that are ready for urban renewal. Seattle was like that and Portland was like that. We're looking at Vancouver, B.C. and in Los Angeles near the Staples arena. You have to get a decent lease to make it work and if we can find the right area that is almost ready to start the renewal, that can work for us."

Tacoma is the same way. After opening El Gaucho there, they opened Sea Grill in 2005. "We're a little early in Tacoma but feel the civic leaders and politicians there are making decisions to create a more livable downtown Tacoma. We wanted to be part of that."

They've had less stellar early successes with Troiani and Waterfront Seafood Grill and eventually closed Rippe's (formerly Chez Gus) on the waterfront in downtown Seattle. "Our big lesson with Chez Gus/Rippe's was that we do high end," explains Chad. "We don't really know how to do a lower price point, it's not in our DNA. We want to offer the best and don't know how to slash quality to hit a certain price point. We've also learned that people want to be treated in a special way and they're not afraid to pay for it. If we were just selling a piece of meat, we couldn't charge what we do. We're also charging for the experience. That means a high staff/guest ratio and increased labor costs. But a vast portion of the population wants that treatment and as long as they feel they get value, they're happy. It does mean that their expectations are high and there is little room for error on our part." The former Rippe's is now private event dining and overflow for Waterfront Seafood Grill.

With Waterfront and Troiani, they've had to search for the style of service and food that works for those locations. "When Waterfront opened, it had a food bent toward a smaller place," explains Chad. "We couldn't produce that food in a large room. We also had service issues that we had to work on. Four years later, it's a very profitable and successful restaurant, well-known to high end travelers as the ultimate seafood experience." Chef Peter Levine was hired at Troiani in late March and his new menu debuted May 1.

The Inn at El Gaucho (above the Seattle El Gaucho) is not really a new direction into the future for Mackay. Always looking for the best lease agreements for the restaurants, this opportunity presented itself in the form of a master lease on the entire building. The previous inn has been abandoned for about a year. By taking on the entire building, it secured El Gaucho's future at a reasonable rate. "We originally were thinking that it was time for the next generation of private clubs to begin here," says Chad. "People love to have a place to be outside of their homes, but most clubs are built around an old mindset on dress and expectations. Today you can be a billionaire and wear jeans. As it turned out, the economics didn't work here, so we decided the Inn was the way to go."

The Inn is like "an adult Disneyland, as oasis in the city, a place to have fun" according to Chad. Guests get the full Gaucho treatment. "We don't charge 50 cents for the paper each day or $8 because a guest wants to open a bottle of water that's on the table. We really built it for our restaurant patrons. They can have a private dinner with clients here with a high level of hospitality. They can have room service from the restaurant." Despite being built for their local patrons, they have a lot of clients out of Los Angeles and New York. And they sell quite a few of the El Gaucho robes. "But we have the best robes around," laughs Chad. "And the logo is very subtle."

Inn at El Gaucho, courtesy of Mackay Restaurants

They also use the Inn for training purposes. When they hire someone for the restaurants, it's not for a job, it's for a career. There is a lot of training involved and it's very handy to have staff stay at the Inn while working downstairs.

The Mackays have been doing a lot of research on service, ambiance and food as they plan further expansion. "We can get very insular in the Northwest," explains Chad. "We want to be a major player, nationally and internationally, in terms of quality and service. So we study what others are doing, not only in big cities, but also in places like Scottsdale and Palm Desert/Palm Springs where there is a lot of money."

In the next five years, they want to hit the ten-restaurant mark. "We've had a new restaurant every 18 months," says Chad. "This is the first year we've gone without opening something new. We're concentrating right now on our execution—increasing profits, service concepts, building company infrastructure and using the Inn in Seattle as a prototype for staff training. The three El Gauchos have had their differences. We've watched how that's played out and are now pulling together the lessons and making them consistent. That will help as we move forward."

The Mackays are proud of the value they bring to their communities. Not only do they provide employment (375 employees at this time), but they provide 401k's, health benefits and real careers. "We certainly like the challenge of growing as a company," says Chad, "but we also feel it gives our employees an opportunity for growth. We feel that we're here to serve others—our guests, employees and investors." As with most restaurants, Mackay gives an incredible amount back to the community through charitable donations (money, time, food for events, etc.). "If you forget that service to others is where the value comes from, you lose your way."

This doesn't seem likely for the Mackays. They have a plan, they're executing it well and enjoying every minute along the way.

Connie Adams/May 2006