Mellow Mushroom site work in Bristol to begin this month

Site work is scheduled to begin later this month for a new Mellow Mushroom restaurant that is expected to open in August.

City and business officials formally announced the restaurant’s new location, on a 1.6-acre tract at the intersection of Lee Highway and Forsythe Road near Sugar Hollow Park, during a Friday morning news conference. The project was initially expected to be built on a nearby site in Washington County, but the ownership group changed its mind.

“This is a superior site to the one in Washington County,” restaurant partner Rusty Morrell said Friday. “This has nothing to do with Washington County. We worked really hard with Christy Parker and those folks, but at the end of the day this was just a better site.”

Morrell and partners Ryan Mathesius and Nathan Singleton – who operate the Mellow Mushroom in Johnson City – plan to invest about $2.3 million in land, site work and building the 4,850-square-foot restaurant. The new business is expected to employ at least 75 full- and part-time workers.

“We’re proud to come home. We’re all from Bristol, we’ve been very fortunate in Johnson City and we expect to be even more successful here,” Morrell said.

Parker, the county’s director of economic development, said they understand the decision.

“It’s a great project and a great product and we will all benefit from having it at Exit 7. It is disappointing the county will not get any revenue from the project being located within the city limits,” Parker said. “The Highlands site had more developmental issues than the site they chose across from Home Depot. We met with them and presented all the agreements to draw down our grant funds but the amount we offered was not enough to offset their development costs.”

After the news conference, the City Council met and approved a $150,000 financial incentive package under a new no net loss, performance-based program geared to commercial projects. Mellow Mushroom will be the first recipient, said Andrew Trivette, the city’s director of economic and community development.

“As the new business begins to perform and generate revenues back to the city – whether through sales tax or meals tax or property tax – the city is able to grant money back that is not currently budgeted,” Trivette said. “It’s simply a reward for good performance. It’s a program we think makes a lot of sense and certainly made a lot of sense for Mellow Mushroom.”

The new business will receive 3.5 percent of its quarterly gross sales back until the $150,000 threshold is met. Based on sales projections, the city expects to complete its grant to Mellow Mushroom within its first full year of operation, Trivette said.

Parker said the city’s tax on prepared meals likely made the difference in this deal and could prompt similar action by the county.

“This certainly highlights Washington County’s need for a meals tax,” Parker said. “Bristol has this tax which allows them to collect three times the tax on restaurants and, therefore, they can offer more lucrative incentives. This is something that will be explored by the county in the future.”

City officials predict the area will see additional growth in conjunction with the expected late 2011 opening of the new Alpha Natural Resources corporate headquarters, which will employ more than 250. In addition to the pizza chain, which has 120 locations in 16 states, a new Chik-fil-A restaurant is scheduled to be built across the street later this year. Both are strategically located adjacent to the Alpha entrance.

“We’re really looking forward to working with the folks from Mellow Mushroom and we are excited to watch the synergy that will develop along Lee Highway when they open,” City Manager Dewey Cashwell said.

dmcgee@bristolnews.com
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