The Velvet Cellar
Audio By Carbonatix
Get ready for yet another change at the Saddlery Building at 1500 Wynkoop Street.
The LoDo building that previously housed Chow Morso Osteria and the Squeaky Bean is shuffling things up again. Current tenant Velvet Cellar’s sole remaining owner, Reilly Chunn, revealed he’s in the process of selling the business after two-and-a-half years. While the sale is not yet complete, he says he has a signed agreement with a new buyer who he hopes will provide the resources and attention needed for the wine and small plates spot to survive.
“We built a good neighborhood spot,” says Chunn. “All we need are butts in seats.”
To achieve that, however, Chunn thinks the Velvet Cellar needs an owner who can dedicate the time and energy required to both lead the team and manage the day-to-day details he is no longer able to handle. Chunn’s mother passed away this past September; along with other business commitments, that’s kept him from being as present as much as he’s needed.
“I can’t be in two places at once,” he says. “I think the new owners have more resources and time, which I was not able to give.”
Chunn opened the Velvet Cellar in December 2023 with childhood friend and business partner Chris Dominey. Dominey left the business in August 2024, however, taking on the role of restaurant manager at Aurora’s Gaylord Hotel. According to Chunn, the restaurant just wasn’t generating the revenue necessary to support two owners.
“Neither one of us could afford to work for free, so he moved on,” says Chunn, who ultimately bought out Dominey’s share. “The road just kept getting rockier and rockier. There were city challenges, operating expense challenges.”
Chunn had forecasted many of those challenges nearly from the start, when the pair hoped their restaurant would serve as an example for downtown Denver’s comeback, but even then struggled with the regulatory hurdles of operating in the city.
“There is a litany of red tape, process and procedure that makes LoDo problematic for all business owners,” Chunn said back in March 2024. “These policies do not nurture an environment that is maximally conducive to generate sales and use tax, which I believe is roughly 25 percent of the City of Denver’s revenue stream.”
But Chunn acknowledges that city codes and permits were only part of the restaurant’s problems, pointing to a disconnect between the desired concept and the business realities needed to keep that concept alive until it could take hold. Wine bars in Denver have a narrower built-in audience, he notes, and that requires a lot of marketing and on-site education that takes time … which the Velvet Cellar simply ran out of.
“Velvet Cellar was meant to be wine-focused (with) tapas and small plates,” says Chunn. “But it became clear that concept could not support our expenses. It wasn’t getting the response it needed. And we didn’t have the deep pockets and resources to throw money at it.”
He hopes that a new owner, one with multiple restaurants and shared assets, may have better luck.
“If I owned two other restaurants, I’d have economies of scale and could tap into a larger revenue pool,” Chunn explains. “That’s why others have so many other concepts. It’s the only way to make it work in Denver. If you have a standalone restaurant, I don’t think it’s viable.”
Chunn didn’t want to sell to a faceless, out-of-state corporation, however, preferring a local entity that might retain the staff and keep the concept alive. While he has a purchase agreement in hand, the process has dragged on for several months; when Chunn announced the pending sale last month on Reddit, he listed June 1 as the likely closing date.
“The new owners believe in what we have built and are excited to carry it forward,” he wrote in that Reddit post. “I am confident they will give The Velvet Cellar the attention it deserves while preserving the spirit that made it special. I hope you will welcome them, support them, and continue making memories there for years to come.”
The Velvet Cellar is located at 1500 Wynkoop St. and currently open from 4 to 10 p.m. Friday and Saturday and 4 to 9 p.m. Tuesday through Thursday. For more information, visit thevelvetcellar.net.
