GLOUCESTER — The backers of a new $10 million entertainment venue in downtown Gloucester are hoping the venture contributes to an expansion of the annual visiting period in the city with a seasonal reputation.
The Cut, which officially opened Nov. 20, is designed for several uses with a bar, sit-down restaurant, casual pub grub, live music performances and recording facilities. All in a sprawling Main Street location that’s been extensively refurbished to host local and national touring acts.
It’s an ambitious venture backed by seasoned investors. But can they make a go of it in a city that loses half its population during the winter and quiets down significantly when tourists and beachgoers travel elsewhere?
For The Cut, the looming question is: Can it recoup the investment despite the annual January-through-March mute button? This year’s Edward Hopper art exhibit at the Cape Ann Museum may have provided a clue.
The special exhibition presented in collaboration with the Whitney Museum of American Art featured the paintings and drawings of Edward Hopper and from July through October, attracting 36,538 visitors during its 12 weeks, part of it well beyond Labor Day.
Notably, many of the visitors traveled from well beyond the Boston area to view the exhibit. When it was over, it was like someone turned off the retailing spigot.
With more than 50 years of retail experience in Gloucester, reaction to the Hopper exhibit provided a valuable lesson for the city, Gloucester Merchant Association President Joe Ciolino said.
“That, to me, was the biggest draw of the season,” he said. “The arts is a big thing in Gloucester, so they (The Cut) have a lot to gain from that.”
‘Community hub’
An estimated 18,000 restaurants operate in Massachusetts, and one in three restaurants that open nationally don’t survive their first year, Massachusetts Restaurant Association spokesperson Christine Johnson said.
As a result, it’s always a challenge for such business owners, especially in a city that experiences a large drop off in traffic during the dreary winter months.
The Cut was developed in a 22,000-square-foot vacant former CVS Pharmacy building at 177 Main St. The downtown building underwent a complete rehab, inside and out. It’s owner is Granite Cove Equities LLC, a Gloucester company established in March 2022, according to a filing with the Massachusetts Secretary of State.
The filing lists Thomas L. O’Grady as the real estate investment company’s manager. O’Grady is also the CEO of Waltham-based Pro-Teck Services Ltd., a 30-year-old property valuation company, according to his online profile.
Sarah O’Grady lists on her online profile a title of managing partner of Granite Cover Equities.
In late 2020, a division of Stewart Information Services Corp., a Houston-based company posted $3 billion in annual revenue, announced acquiring Pro-Teck Services for an undisclosed amount. Last January, it merged Pro-Teck with Stewart Valuation Intelligence LLC, according to multiple reports.
The Cut is the name used to describe the short narrow channel between the Outer Harbor and the Blynman Canal and the Annisquam River.
Through a company spokesperson, Tom O’Grady declined to comment for this story.
Tax break
Last June, O’Grady wasn’t as reticent when seeking a deal from the city that could qualify The Cut for more financial incentives from the state.
Gloucester’s city councilors approved a tax increment financing (TIF) agreement for The Cut after O’Grady attended a public hearing along with Gloucester Economic Development Director Sal Di Stefano.
The city’s TIF committee reached a preliminary agreement on a TIF of 25% off the estimated incremental tax increase for five years starting in fiscal 2025. The estimated annual savings is $9,700 off the incremental tax the city is not receiving, Community Development Director David Fields confirmed.
Granite Cove’s application details a 165-seat restaurant and a 500-person music hall.
The TIF enables Granite Cove to apply for additional state incentives, such as the “Abandoned Building Renovation Deduction” administered by the Massachusetts Office of Business Development. The deduction provides for a 10% the cost of the renovation, which suggests a $550,000 incentive if such costs reach the $5.5 million listed on the project’s application.
Granite Cove bought the building in May 2022 for $2.9 million, according to city records. Cost of updates on items such as a new roof, new HVAC, plumbing and electrical systems escalated amid a national supply-chain challenges. A traditional marquee was installed about the entrance, providing a meaningful improvement to the appearance versus the abandoned CVS, O’Grady told city councilors.
“It’s become quite a project,” he said. “So we are investing a lot in it.”
‘Forever home’
Can backers recoup their investment in downtown Gloucester? To increase their odds, Granite Equities enlisted a team of hospitality industry veterans to manage The Cut.
It includes Director of Operations Travis Siewers and Event Manager Tom Clark, both of whom have decades of national industry experience.
Siewers, a seven-year Gloucester resident, has been redeveloping the space with Clark, a 28-year resident, since teaming with other investors 15 months ago.
Clark, who grew up in Jamaica Plain and Weymouth, made a career out of developing an estimated 300 hospitality venues such as clubs and restaurants for companies like the House of Blues.
The Cut was designed to “fit in with Gloucester” and Siewers is expecting ticket prices to range from $25 to $35. He also plans the venue to host two national acts per week.
The Cut’s music hall, expected to accommodate 475-people, is scheduled to open in January. Unlike the larger Cabot Theatre in Beverly and smaller Shalin Liu Performance Center in Rockport, The Cut’s music hall would be general admission and plans to host sit-down events only when it’s suitable, Siewers said.
The Cabot lists a seating capacity of 850 and Shalin Liu lists 330. Both are operated by nonprofit organizations.
Much like his hometown of Jackson Hole, Wyoming, Siewers expects Gloucester to eventually transition from a seasonal destination to more year-round, making venues like The Cut more viable.
“We want to try to create a community hub, a spot,” he said. “But music is the top priority to us.”
The Cut is about the ninth opening Siewers helped develop during 22 years in hospitality that included stops in New York City, Seattle and Austin, Texas. He considers it a “labor of love” to develop a venue just three blocks from his family’s home and plans to be a day-to-day presence overseeing its operation.
“This is what I’ve been looking for a very long time. This is my forever home.”