Taking a Gamble on Bringing Arooga's to New England

The Mohegan Tribe, which is comprised of 2,000-plus members and over 700 acres of reservation lands, effectively operates one of the most successful gaming and entertainment destinations on the East Coast. With the hopes of garnering similar success to that achieved at Mohegan Sun, the Tribe formed Mohegan Holding Company, LLC in 2012 to run a myriad of non-gaming business endeavors, including franchise restaurants, an office technology enterprise, and a sustainable resource supplier. In addition to expanding the Pasta Vita gourmet-to-go concept, and bringing 24 Smashburger restaurants and more than a dozen Jersey Mike's locations to New England, the Tribe sought to bring the Pennsylvania-based Arooga's Grille House and Sports Bar to the region as well.

As the Tribe is situated on a reservation in southeastern Connecticut, they were interested in partnering with a community bank to financially support their endeavors. Chelsea Groton Bank was approached in 2014 to fund a commercial loan for the build of Arooga's Route 32 in Uncasville, the first of 15 franchise locations planned for New England, on a vacant parking lot adjacent to Mohegan Sun.

"Prior to the Tribe approaching us for the loan, they had invested a great deal of resources into identifying possible locations in New England and analyzing each location's potential for profitability," explained Dave Stone, VP, Commercial Lending Officer at Chelsea Groton Bank. "We were excited about the decision to have the Uncasville site be the first franchise location in the region, and saw the potential for its success, as well as a strong partnership with Mohegan Holding Company moving forward."

Two loans were requested initially — a commercial construction to permanent mortgage and a commercial term loan. The construction portion of the first loan had a term of up to 12 months, with the permanent portion having a term of up to 24 years. This loan would be used to finance up to 80% of the site preparation work and the ground-up construction of the restaurant.

The seven-year commercial term loan would be used for purchases of equipment and the fit-out of Arooga's Route 32. Repayment would be made possible from cash flow generated from operations at the restaurant.

"As when opening any business in a new geography, there are challenges associated with introducing a brand to a new place, learning the demographics of the area, and understanding the needs and interests of people," said Jeanette Ziegler, Chief Operating Officer of Mohegan Holding Company, LLC. "As we worked to strategize on how to make Arooga's successful in this new environment, we were so grateful to have a sound financial partner in Chelsea Groton Bank. Throughout the loan review and approval process, the team at Chelsea Groton sat and talked through plans, and helped us in any way they could. Chelsea Groton offered a refreshing approach to banking. It was nice to work directly with a local business who like us, cares about their business relationships as well as supporting the local community."

The showcase Arooga's facility in Uncasville opened in March 2015. It measures approximately 9,200 square feet and seats about 370 people. In addition to the 100-plus televisions for game-watching and the expansive bar and restaurant space inside, the location boasts a beautiful outdoor patio with fire pit.

The facility is able to accommodate private parties, business lunches and outside catering, and offers specials from 10 p.m. – 1 a.m. nightly. Because of its variety of spaces and seating options, it appeals to families, young adults and business professionals. And, while it is a sports bar at heart, more than just sports happen there. Arooga's hosts Paint Nights, as well as fundraisers and events for sports teams and schools in the local community on a regular basis.

"In order to have a fun restaurant environment, we believe it's critical to cultivate a culture and develop a team of employees passionate about what they do," shared Ziegler. "Having over 13,000 MVP loyalty club members is one statistic we can point to that proves people had a really enjoyable experience at Arooga's and want to come back again. We give a lot of credit to our impassioned team of approximately 75 employees, led by general manager Stephen Bartek, that have contributed to making this happen at our Uncasville location."

In April of 2016, Arooga's Route 5 was opened in the more densely populated area of Warwick, RI, and is having great success in its first few months of operation. In early 2017, the third of the planned-15 New England franchise locations, Arooga's Route 1, is scheduled to open in Attleboro, MA.

"As a lender, it has been a pleasure to work with the Mohegan Holding Company," remarked Stone. "Their team is professional, knowledgeable and incredibly prepared. They have forecasted every angle of the projects we have worked on with them, and they only use contractors that are equally as professional, which makes for a very smooth and enjoyable working relationship."

Chelsea Groton Bank is proud to be the lending partner for the three Arooga's franchise locations that are underway in New England to date — Uncasville, CT, Warwick, RI, and Attleboro, MA. To learn more about the Bank's lending capabilities, click here.

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