Murphy’s Deli & Bar owner Ruth Ferrazzano says her establishment is one of the oldest, longest-operating dining businesses in Providence. And she plans to keep it that way, even though it involves risking her own neck.
Last month, Ferrazzano closed on a first-floor space in the Pelham House building, at 100 Fountain St. By February, she plans to move the 77-year-old Murphy’s from its longtime address, at 55 Union St., to the new space two blocks away, at the corner of Mathewson and Fountain Streets.
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Response from regular customers to the move has been positive, she said, though there will always be die-hards among the politicians, police officers, lawyers, reporters and families who frequent the current spot.
Moving is going to be risky, admits Ferrazzano, who has owned Murphy’s since 1996 – not so much because of the possibility of losing customers, but rather, because she has put her personal assets on the line.
Funding for the move, the build-out and the purchase of the 2,250-square-foot business condominium is coming mostly from a $373,000 U.S. Small Business Administration 504 loan and a $450,000 Coastway Credit Union loan. The total projected cost is about $900,000.
Ferrazzano had to sign personal guarantees for the loans, so if the endeavor fails, “I could lose everything.”
The whole financing process was a learning experience, she said: The bank and the SBA evaluated her personal credit and looked at three years’ worth of sales and expenses for Murphy’s. It took her six weeks just to collect the records.
Getting a decent appraisal was also difficult, she said, because few restaurants downtown own their spaces, so it took “a lot” of research to determine the value of the property.
And because restaurants are considered high-risk by most lenders, she had to submit a detailed budget for the entire project. “Everything has to be accounted for,” she said.
Ferrazzano said she was surprised by the costs associated with the lending process: There were legal fees and extra appraisal costs. She also was required to buy a life insurance policy and a builder’s risk insurance policy. All were unexpected expenses.
But she sees strong potential in owning her own space and in expanding Murphy’s by about 20 seats. She also plans to open earlier, so she can sell breakfast, and to expand the dinner menu by five or six items. “If it looks like a good opportunity,” she said, “you have to take it.”
In recent years, Ferrazzano said, the business had been stagnant while rent and utility costs rose. Nine years ago, she said, she was paying $800 to $900 per month for electricity alone. This year, it was $2,500 to $2,800.
She said she hopes moving to the new location will stabilize her utility expenses. Though it will be 750 square feet larger than her current space, it will have brand-new electrical wiring, a new heating/air conditioning system, and double-paned windows.
Ferrazzano expects breakfast will be popular because so many people already come into Murphy’s asking for it. “Lunch won’t change,” she added. “We’re known for our Reubens and seafood on Friday … I’m not trying to be the Taj Mahal.”
To ensure that the new Murphy’s has the same neighborhood-pub feel, she hired the Pawtucket-based Judd Brown Design firm to design the new layout and interior.
“I want the same feel as you walk in the door there as here, but nicer,” Ferrazzano said.
And she doesn’t plan to raise prices, she said, because “keeping the price reasonable for the product, as it is now, that’s what we’re known for.”
It is important to Ferrazzano to keep the place growing and prosperous, because Murphy’s “is just something that’s lasted,” she said. “I’d like to keep that going … I’d like to see it reach its 100-year anniversary.”
