Ann Arbor continues to attract new restaurants despite the economic recession and complaints - even from some restaurateurs - that there are too many eateries in town.

The concentration of restaurants on and near Main Street creates a destination for out-of-towners, and the University of Michigan provides a stable and loyal base of customers. But restaurant owners said with the number of existing eateries in town, it’s crucial for new ones to find a niche and serve it well.

For Ron Jeffries, owner and brewer at the Jolly Pumpkin brewery in Dexter who plans to open a café on South Main Street within two months, the niche is his award-winning beer and vegan and vegetarian food.

He said he’d been looking for space in Ann Arbor for three years, but rents have only recently become affordable.

Jeffries’ café will be in roughly 4,200 square feet where the Pepperz restaurant used to be, in a neighborhood home to more than 20 restaurants. But he said a restaurant row is more beneficial in bringing foot traffic than the competition is harmful to a single eatery.

“There’s a lot to be said for having a restaurant in an area with a lot of other nice restaurants,” he said. “If you’re not, you really need to be a destination or a draw.”

And that, he said, is a lot more difficult.

The proximity to other restaurants also wasn’t a deterrent for Yasir Kaskorkis of West Bloomfield, owner of Yoshi’s on East Liberty across from the U.S. Post Office. The Middle Eastern restaurant opened July 6.

“One way of thinking about it is too much competition, but they’re all here for a reason,” he said. “That reason varies. You’ve just got to find your niche … If you have a good product, it’ll sell, especially here.”

Kaskorkis cited the presence of university students as a reason to come to Ann Arbor, as well as the vibrant downtown area.

“It’s one of the only places that’s thriving,” Kaskorkis said.

Brandon Johns, a longtime Ann Arbor chef and part-owner of the Grange Kitchen & Bar, set to open in early August, admitted his new venture has a difficult road ahead because of the concentration of other restaurants. The Grange will focus on seasonal and locally sourced food, he said.

Is Ann Arbor in danger of becoming over-restuaranted?

“It probably is already,” Johns said. “It’s tough … even in the best of economies it’s tough going down here because of the competition.”

At the same time, the Ann Arbor clientele is extremely loyal to restaurants once they become established, he added.

“If you have a good product and friendly, welcoming people to give you that product, if you can give that out, you’re in,” said Johns, who has worked at Real Seafood, Mac’s in Dexter, the Chop House and Vinology. “Ann Arbor people are very loyal to their restaurants. That’s the biggest thing with being a success. You don’t have to have some crazy concept that’s different than anything. You just have to be consistent from the start.”

The Grange will replace Bella Ciao on West Liberty. Yoshi’s and the Jolly Pumpkin also are occupying former restaurant locations, although in the case of Pepperz it has been out of business for years.

Roger Hewitt - owner of Red Hawk on State Street and a partner in the former Zanzibar on South State, which closed this summer- said location, concept and square footage are crucial ingredients in the concoction that is a successful restaurant.

“You can argue forever about how many is too many,” he said. “The right concept, the right place and the right size are going to be successful.”

The size that is right for the recipe is changing, Hewitt said. Part of Zanibar’s undoing was its large size, he said. Many prospective restaurant tenants are looking for no more than 3,000 square feet, local brokers said.

Hewitt’s new enterprise, a sandwich shop and store on the ground floor of the new Zaragon student high-rise on East University, fits that bill, taking a combined 1,800 square feet.

Hewitt and business partner Richard Schubach are the only investors in the project, which has yet to be named, Hewitt said.

The key was being near the 248 beds at Zaragon, he said.

“I think this is a great location,” he said.

He said hopes to open the stores in September.

Whether new restaurants will last is up to the market, but Jeffries said success depends on a delicate balance.

“There are so many variables and places where money can slide through your fingers,” he said. “It’s execution all the way through. You can have the best local ingredients and the kitchen could slaughter them. If you don’t have a staff that is knowledgeable and friendly, nobody will come back just because the food is good. You need the whole experience.”

-Dan Meisler writes about real estate and other topics for Ann Arbor Business Review. Contact him at (734) 302-1721.

Photo by Robert Ramey: Ron Jeffries, owner and brewer at the Jolly Pumpkin brewery in Dexter.