It was a quiet spring in Wayzata—eerily quiet. Cool, rainy weather kept day-trippers home, while its two largest, most prominent restaurant spaces were dark, reinventing themselves for a big summer splash.

This lakeside hamlet of 4,136, home to a fairly static array of dining and retail, was girding for change, as a major mixed-used development accepted its first tenants and the city prepared to upgrade and market itself to the entire metro area.

In the battle for discretionary spending, Wayzata has one huge natural asset: Lake Minnetonka. The small buildings of its downtown are splayed along the lake’s shore like charms on a bracelet.

Wayzata also has historically had one very big disadvantage, and it’s not the BNSF railroad that separates downtown from the lake, not limited boat slips or scarce auto parking.

It was that Wayzata was for Wayzatans. Its well-used, sort of preppy collection of shops and restaurants served locals and held limited visitor appeal, outside of a collection of summer weekends when day-trippers descend to be on the lake.

“Wayzata likes being small, sleepy, a place where you can park in front of anywhere you are going to,” says Terri Huml, owner of Gianni’s Steakhouse on Lake Street. “Wayzata caters to locals. We have two fine-dining restaurants, but you can still get cheap beer at the Legion and a $4 breakfast at Maggie’s.”

Excelsior, on the south shore of the lake, has the historic streetcar boats and populist lakeside eateries with plenty of dockage; a hotel is set to begin construction this year. Excelsior is open for business. In Wayzata, Huml continues, “there’s no pier, you can’t park your boat and there’s nothing really to do.”

Opportunity at Sunsets

Dean Vlahos finally punched his ticket to a lakeside Minnetonka restaurant via a rather unexpected path. Vlahos had been taking meetings, looking for projects and partnerships post-BLVD, the Minnetonka restaurant he opened in 2010. Plans to open more BLVDs were stillborn. A venture at the West End development in St. Louis Park fell through. Then he got a call from Steve Wagenheim.

“I called Dean last summer. I was looking at buying some Champps franchises and wanted Dean’s input,” Wagenheim recalls. “Dean wasn’t interested, but we decided we worked well together when we were younger, we know the business better than we ever have . . . why don’t we do a new concept? We were looking for low cost of entry.”

Sunsets owner Paul Swenson well knew of Vlahos’ interest in his Wayzata restaurant. “Paul and I have been friends for years; he was a good customer at BLVD. Every time I saw him I told him I was interested in Wayzata,” Vlahos says. “He called me last fall. He owned the building where the Sunshine Factory in New Hope was located. His operator was leaving on short notice. He wanted me to take it over. He also wanted to sell Sunsets Woodbury, which was not making any real money.”

Vlahos asked about Wayzata, the real prize. “He said if I buy Sunsets Woodbury and take over Sunshine Factory, he’d revisit selling Wayzata in a year. I told him all three or nothing.” Vlahos would not disclose the purchase price.

Last fall Vlahos and Wagenheim formed Genuine Restaurant Group and converted Sunshine Factory to Pub 42. They renovated on the fly. The space was so unfamiliar to them that on day one “we didn’t know how to turn on the TVs,” Wagenheim recalls. (Sunsets Woodbury will reopen as Craft Kitchen & Bar in June. Wagenheim is managing both concepts.) GRG took over Sunsets Wayzata this winter and is racing to convert it to Cov before too much of the Lake Minnetonka season is past.

Wagenheim says GRG achieved low cost-of-entry by entering New Hope and Woodbury without buying the pre-existing restaurants, merely entering as a new tenant. Only in Wayzata did they purchase Sunsets as a going concern before shuttering it. (GRG does not own any of the three buildings, says Wagenheim.)

 

The redevelopment of the seedy Wayzata Bay shopping center—a relic of an era of suburbanization that turned its back on all of Wayzata’s natural assets in favor of acres of parking—got Wayzata thinking. “A significant project in a small downtown needs a catalyst,” explains city manager Heidi Nelson. “The city asked itself, ‘How do we reconfigure downtown to capture more discretionary dollars?’ ” Huml recalls.

The answer, more than anything else, seemed to be with restaurants.

The Battle Royale

If, as it’s now said, eating out is where America spends its entertainment dollars, then what will play out in Wayzata this summer should be very entertaining indeed. Two of the titans of the Twin Cities restaurant world will open multimillion-dollar eateries at Wayzata’s top restaurant sites, a third of a mile apart.

To the east, longtime Twin Cities restaurateur Dean Vlahos has redeveloped Sunsets, the place your parents went for brunch and cocktails, into Cov, a Newport-meets-Nantucket-meets-Santa-Monica hub of drinking and dining for the waterfront mogul and those who aspire.

To the west, in the star-crossed Wayzata Boat Works, again owned by Twin Cities tech entrepreneur Rick Born, longtime Manny’s Steakhouse general manager Randy Stanley and celebrated Twin Cities chef JP Samuelson have joined forces to create 6Smith, a softly edgy mix of dining rooms, patios, and rooftops, designed to bring some Gen-X and millennial buzz to Wayzata from the broader west metro.

The timing—both were slated to open by early July—is coincidental; the impact will not be. An estimated annual $10 million-plus in new dining trade will flow into Cov and 6Smith, not to mention thousands of patrons in search of what’s new and next. Whether Wayzata is quite ready for its rebirth is an open question (see “The Lake Effect” sidebar on the next page).

For two of the town’s most pedigreed restaurateurs, it is something of a rebirth as well.

Midas unleashed?

It is not hyperbole to say Dean Vlahos knows exactly what the upscale west metro resident wants from a restaurant. He snared them in their 20s and 30s when he created Champps (1983), a buzzy sports bar with good food that women were as eager to spend time in as men were. He followed it up with Plums in St. Paul (1984). Vlahos followed his baby boomer clientele as they matured, opening Redstone (1999) in Minnetonka and Eden Prairie (and Chicago, DC, Philadelphia and New Jersey)—the tony spot where every middle-aged man or woman on the make made their first stop of the night. Next came BLVD (2010) in Minnetonka, a brighter, more mature expression of Redstone’s assets without the meat-market vibe.

All remain at the top of their genre locally, but all have lost something since Vlahos moved on. He sold his last stake in Champps in 1999 after it went national (he was ill-suited to a CEO role, he says); was forced out of Redstone—due, he says, to perceptions surrounding his friendship and business relationship with convicted Ponzi scammer Tom Petters; and BLVD was a creation wholly owned by his partner, developer Gary Holmes—Vlahos merely concepted and managed the operation.

The Petters saga is relevant because though Vlahos was one of the biggest individual Petters investors, he eventually lost everything with Petters, declaring bankruptcy and spending years under the immobilizing scrutiny of Petters’ bankruptcy trustee. Finally free of it, Vlahos is set to create what he calls the ultimate expression of his hospitality vision.

“For many years I’ve wanted to be on the lake,” Vlahos says. “I’ve done business in Minnetonka for 30 years, I live in Wayzata. I passed up a chance to buy Maynard’s [on the shore in Excelsior] and always regretted it.”

Vlahos, 59, is partnering in the venture with Steve Wagenheim, the first president of Champps, who went on to create the Granite City chain, a $140 million company operating in 13 states, which was sold to private equity investors in 2010. Together they’ve created a company called Genuine Restaurant Group (see “Opportunity at Sunset” sidebar) and have three restaurant projects in the works, all connected to the Sunsets acquisition. Wagenheim provided seed capital for the venture, and there is a second silent investor Vlahos would not name.

Though Wagenheim and Vlahos cut ties during the Champps era over philosophical differences, he says rejoining forces was not a difficult decision. “Nobody works harder than Dean,” Wagenheim says. “He is a visionary and a master of small details. I saw how hard he worked at BLVD, with no skin in the game, and how humbled he was [post-Petters]. I was impressed.”

Vlahos is the only one at the tiller of the Wayzata project, with design assistance from Shea.

“I have two things going here,” Vlahos explains. “I have a vision and the A-1 location.” Sunsets, though not beloved among the foodie set, was a profitable business with a loyal clientele, largely due to its lakeside setting and central location, Vlahos believes. Despite that, Vlahos gutted the space to the studs and has changed the face of the building. “I had to,” he says. “It just didn’t look nice.”

His vision is a classy, nautical-themed restaurant, albeit not exclusively focused on seafood. Patios are being enlarged, and an oyster bar has been added, as has an open kitchen. Vlahos recruited a chef with culinary honors (Cory York of Deep Blu Seafood in Orlando, Fla.) rather than a kitchen manager charged with templating recipes.

“What I do when I concept a restaurant,” explains Vlahos, “is I take a bit of the best out there and put it together. I promise, you’ll have never seen anything like Cov in the Twin Cities. It’s Redstone meets Oceanaire with bits of Champps.” If that sounds strange, the smart money is nonetheless voting on Vlahos.

“Dean is formidable,” says Boat Works owner Rick Born. “I tried to get him to work with me.”

From a business standpoint, it’s a bit of a departure for Vlahos: “I’ve always built [restaurants] with an eye toward making chains. This is a one-off. But we do believe we will get interest from people who own waterfront properties and seaside restaurants, and there may be opportunities there.”

Though the partners will not discuss finances or what they paid for the Sunsets portfolio, GRG is thought to be spending between $1 million and $2 million renovating the Cov space. Vlahos says Cov will “do every bit of the $6 million [annual revenue] we were doing at BLVD.” Vlahos expects to open in early July.


Like what you just read? To receive business news directly in your inbox each Tuesday and Thursday, sign up for our free e-newsletter, Briefcase, and be sure to join the conversation by commenting below.