By Chris Mohney
Chris Shepherd is chef-owner at Underbelly Hospitality in Houston. The serial restaurateur has spent the past year making big changes among his existing venues and opening new ones. His first restaurant, Underbelly, had already been converted into Georgia James Steakhouse. The existing Hay Merchant, UB Preserv, and One Fifth all closed. Then Georgia James Steakhouse moved to a temporary location during the buildout of a new permanent home, while a spinoff called Georgia James Tavern opened. Then Underbelly Burger sprang up in the Houston Farmers Market. And the new Wild Oats just opened, to be followed by a new Italian restaurant, Pastore, sometime this spring.
We made a bunch of changes back in the middle of 2017. There was Underbelly restaurant, and Hay Merchant. What was going to be next? We got the lease down the street for what became One Fifth. It was an interesting five-year deal. So we started One Fifth as a five-year concept to try and understand what we were going to do in the future. I said that I would change the concept every year, just to try and figure out what I wanted to do when I grow up. We did One Fifth Steak, and we liked that a lot. And then we did One Fifth Romance. And then our city was devastated by Hurricane Harvey.
There was another location next door, but the whole project would have cost me about $6 million. And I was like, “I don’t really want to do that.” That motivated the decision to change Underbelly into Georgia James Steakhouse and for me to step out of the kitchen and have chefs at all the places.
We opened UB Preserv, which is across the street from One Fifth. It was a small 74-seat restaurant. We had Nick Wong, the chef from Momofuko Ssäm Bar in New York. So at that point, we had One Fifth, Georgia James, Hay Merchant, and UB Preserv. We started to see Georgia James grow, and every time I walked in I’d just see Underbelly. But that was fine.
And then the thought process was that at some point I wanted to do a Georgia James tavern—small, not as fancy. Going out is expensive. You can’t do that all the time. I wanted to have an everyday kind of place. We actually talked about redoing Hay Merchant into a tavern, so we would have the tavern and Georgia James connected in the same building. But that was $1 million to do. After this pandemic hit, that all changed.
Of all the things we’re doing now, the only one we really planned before the pandemic was maybe Underbelly Burger. My business partner Todd Mason and his group bought the Houston Farmer’s Market in 2017 and started to redevelop it in 2018 or 2019. One of our friends was putting a butcher shop in, so it just made sense to put a burger shop next door.
The burger stuff was planned because we buy our beef from a couple of small farmers around us. They’re not really all that small anymore, but I mean local Texas farmers. The way the cattle industry works, when 2020 came around—they quit harvesting. Not only did they quit harvesting, they quit inseminating. They quit breeding. Once that happened, they held onto the cattle that they didn’t harvest, and harvested slowly along the way. You’re going from harvesting 200 head a week to 100 head a month.
I would go to my 44 Farms guys and say, “Hey, I need to get some ribeyes.” He just snickered at me. He was like, “Dude, I don’t have them. I have grind.” When you start to look at how big a cow is, it’s a 28 or 30 percent grind. That was really the reason why the burger shop started. If burger shops could use small farmer’s beef, then we wouldn’t have a problem with getting ribeyes and strip steaks and all the cuts people want. So we only use 44 Farms and R-C Ranch Wagyu. One would do an Angus burger and one would do a Wagyu burger. That gives them the ability to run through grind and make it more sustainable to butcher or harvest more animals.
When the pandemic started going through, we were asked by a high-rise luxury apartment to come in and do the bottom-floor restaurant, which is now Georgia James Tavern. The economics had to be really, really right.
I learned with this that I want to be more of an amenity. You have to look at real estate way differently now. If you don’t own the property, you’ve got to work your deals to be financially better for you. Because what if this crisis all happens again? The high rents that we were all paying, you can’t do anymore. You saw that across the country. If it all goes to shit again, you work more on percentages. Some people don’t like percentage rent. They like to know exactly what they’re getting. You’ve got to have a base cap. If I make money, you make money. But if I don’t make money, you don’t make money.
We as an industry have to look at what’s better for us. It was something that I was saying pre-pandemic. A developer might come to us and be like, “Man, we’ve got this really beautiful spot.” I’d be like, “Who the hell are you going to put in there? Who’s going to go in at $95 a square foot? You want me to take 10,000 square feet? No! What are you even thinking? You’re crazy!”
You saw it happen right before the pandemic. A lot of places sat empty because nobody’s going to pay that. Nobody can, unless they’re a big company. Developers wanted the small, local, fancy, fun, city-driven places. But we can’t afford that right now. Now we’re trying to buy local. We’re trying to support our economy, our local systems. You can’t do that with those kinds of rents.
Our new place, Wild Oats, is doing a deep dive of Houston and Texas food. It’s historically thought-out, redone, re-envisioned food. And that’s at the Houston Farmer’s Market right next to the burger shop. So we’ve got Underbelly Burger next to the R-C Ranch butcher shop. Right across the walkway is Wild Oats. My business partner owns the property, so he’s my landlord. He’s actually his own landlord. That just makes more sense, right? He’s in it to win it. He understands how the restaurant model really works.
Before the pandemic, we looked at a spot around the corner from the restaurants in this new complex that’s going up. It’s probably the biggest development that Houston’s seen in a long time. It’s residential, it’s commercial. It’s a prime, prime spot. I had this vision of doing a live-fire restaurant with 14 feet of fire table, and blah, blah, blah, blah. It was going to be my dream place. But finding somebody to run that other than myself was a little interesting.
They had two other restaurants on-site, and their economics for that deal were really, really good. They told me, “We’re going to make it work.” But I’d been that told pre-pandemic. When the pandemic hit, my landlords came back and said, “Guess what? All that stuff we made work? We need to get repaid on it.” That’s their thing. That’s their priority. Whatever.
But as I looked at this space, I was like, man, this place isn’t big enough for what I need it to be, but it’s perfect for Pastore, which is the last One Fifth concept that we did. It’s American Italian, the stuff that I grew up having as a kid. Lasagnas and things like that, just delicious food. We walked next door, and it’s this massive building. I was like, “Oh my God, this thing is like an aircraft carrier!” I was like, just get me out of it. I said, “I gotta go.” They’re like, “We’ll split it up for you!” I was like, “I gotta go!”
We had our conversation with our landlord at Georgia James. It made sense in my mind that this is the last big rent I’m paying. My 10-year lease is up. You have to do a lot more renovations in here. And yes, we flipped it from Underbelly to Georgia James. I told my business partners, “I know we’re just paying it all off. We’re literally in the clear now. But let’s go.” You have to think about the future. If something like the pandemic happens again, you still have that massive rent.
I didn’t have another spot in mind for Georgia James until I walked that giant aircraft carrier. I was like, “Todd, see what the economics on that look like.” He was like, “Man, it’s basically the same, if not better, than what we have on the place next door for Pastore.” I was like, “It’s time to go.”
Both of these places are literally shells, and we are building them out exactly how we want. So at this point, we have closed Hay Merchant and Georgia James. We moved Georgia James down to One Fifth. We closed UB Preserv and moved that team to Georgian James Tavern. Now we’ve got Underbelly Burger, open and we are taking the One Fifth team to Wild Oats. For the next three to six months, every single restaurant and employee we have is in a brand-new facility.
We did three new restaurants in six months before, and we did that right. People are like, “You’re opening so much new stuff.” I’m like, “We’re not really. We’re just moving the concept to a new building.” The steakhouse has been done. Pastore has been done.
These days, I’m more hands-on with design. Before, I was more in the kitchen. I’d walk out and be like, “Oh, that’s what we’re doing? Those walls look great. That art looks great.” But now I’ve got chefs and culinary directors that are running everything. I have a team around me that can help me make decisions. And these things are turning out beautifully.
My wife Lindsey already made me promise this is it for awhile. She said, “You’re not doing anything else for two years.” People said, “The word is that you’re trying to expand your empire.” I’m like, “What empire? I’m not doing that. That’s colonial, or even before that. That’s Roman times.” I’m trying to make things work for our staff. I’m trying to make sure that all of our staff has brand-new beautiful homes.
We’re actually losing one restaurant in total. So it’s more of the focus on how to get it done perfectly. I say I won’t do it ever again. At some point we’ve got to figure out how to enjoy what we’ve done. I turn 50 this year. I don’t want to do this until I’m 70. I want to stand in front at Walmart with the black socks and sandals and shorts and greet people. “Hey, man! Come on in! Lawn equipment’s on aisle 42!”