McMenamins seeks outside investors for expansions, including at Tacoma Elks property
McMenamins always has had big plans for improvements and/or expansions at different sites among its hotels, brewpubs and entertainment venues in Washington and Oregon.
Then came the coronavirus and the current pandemic and the shutdowns of its sites, except for a bottle shop in Portland and its digital store.
“It’s been really, really hard,” Mike McMenamin, one of the founders of the family business, told The News Tribune in a phone interview Wednesday.
Given all that, the family is still trying to find ways to keep their future projects alive and on track.
To that end, the business is seeking outside investors, a tactic it has turned to in the past to help raise capital for development of specific sites such as the Elks Temple in Tacoma and Anderson School in Bothell.
Now, though, the strategy will apply to the entire two-state operation that spans from Mill Creek, Washington to Roseburg, Oregon.
The $20 million preferred stock offering is the first time the company has opened direct investment in McMenamins, Inc., to those outside the family, according to its news release on the program.
“A lot is just to stabilize and get the short term debt incurred paid down,” Mike McMenamin explained.
McMenamins did qualify for the Paycheck Protection Program under the CARES Act.
“We would’ve been in dire straits without that. It meant we could bring back a lot of people early, back to February levels in June in terms of employment,” he added. “It’s not a perfect fit for every business, but it worked for us, and it really helped us get back in the saddle to last until we open for real.”
A few weeks ago, takeout business was started at its sites, including the Elks Temple. Last week, lodging returned for a partial reopen.
McMenamin said there are about 40 people working at the Elks now, with another 40 set to come back “in the next couple of weeks.”
Beyond that, “We have years of projects to build out,” he said.
But first, loans need to be repaid, and investors are needed now.
The investment program is seeking “minimum investments of $100,000 or more from 150 to 200 accredited investors to shift the company’s capital structure toward a greater reliance on equity,” according to the release.
Investors will purchase “a non-voting shareholder interest in the company.”
“Monies raised will be used to bring the company back to pre-COVID-19 levels and to add lodging, meeting facilities, a bottle shop (and perhaps a secret bar) at Cornelius Pass Roadhouse in Hillsboro, Ore., transform ‘The Jail’ into a hotel at Edgefield in Troutdale, Ore.,” and other projects.
Among those “other” projects, is an expansion of the Elks, with “a combination parking and meeting facilities and more lodging,” Mike McMenamin told The News Tribune.
“It’s really desperately needed there, and of course other things like a soaking pool and more gardens, but the main thrust would be hotel rooms, meeting facilities and parking.”
“We fell in love with that building years ago,” he added, “and we threw everything we had at it and wanted to make it great for Tacoma, and we and want to add to it on the north side. It works great now, and it’s very busy and very fun, but this would complete the picture.”
Qualifying investors would be those “with $1 million or more in net worth, excluding the value of the individual’s primary residence, or more than $200,000 in annual income, more than $300,000 with their spouse, in the past two years. Certain institutions may also qualify as accredited investors,” according to the release.
“This is a private placement of securities, and units will not be publicly traded. Investors are expected to earn an annual 3 percent cumulative dividend and up to a 6.5 percent overall return over a time frame of five, eight or 10 years.”
For more information, go to http://invest.mcmenamins.com/ or email invest@mcmenamins.com.
This story was originally published May 21, 2020 at 5:05 AM.
