Illegal Pete’s will make its home at 876 E. University Blvd., former site of clothing stores Franklin’s and Landmark. The restaurant’s name is meant to be playful, says owner Pete Turner.

Kelly Presnell / Arizona Daily Star

A Colorado-based restaurateur is coming to Tucson this fall and bringing with it starting wages nearly $2 higher than most Tucson fast-casual restaurants pay.

Illegal Pete’s Mexican restaurant, moving this fall into a historic two-story house at 876 E. University Blvd., will pay employees a starting wage of $10.50 an hour plus tips. Kitchen workers will start at $11 a hour, said owner Pete Turner. The restaurant also offers medical and dental insurance — employees pay half the cost of the premiums — paid vacation, and a food and drink allowance.

At the 20-year-old company’s seven restaurants in Denver, Fort Collins and Boulder, Colorado, wages with tips included average $14 an hour for most employees, Turner said.

Illegal Pete’s also is in the process of a $1 million “wage benchmarking project” that will bump employee wages higher.

“It’s a significant commitment, but we think that you’re going to get better people, more committed people,” said Turner, who opened his first restaurant straight out of college when he was 23. “We do believe it’s good business in the long run, or even the short run. It’s ultimately … the right thing to do. This sort of middle class has gone away, and not that we’re trying to replace that but we’re trying to provide a door up to that.”

Most Tucson fast-casual restaurant workers make an average of $9 to $9.50 an hour, said Juan Padres, an economic development specialist with the Tucson City Economic Initiatives Office.

And most of those employees are lucky to work 30 hours a week in those jobs, he said.

“Most of the labor force has other jobs, other than management,” Padres said.

Turner’s model, though, might not work for most restaurants, which operate on razor-thin profit margins that average 2 to 4 percent, said Arizona Restaurant Association spokeswoman Chianne Hewer.

“Everyone would love to pay their employees more, but the fact is we are a labor-intensive industry. It takes at least five people to run a restaurant that might not even have a full menu,” said Hewer, the association’s public affairs and communications manager. “It comes down to the business and the revenue and expenses at the end of the day.”

Illegal Pete’s serves a full menu of San Francisco-inspired Mission-style Mexican cuisine that also borrows Southern California influences. It has often been compared to another Denver-born Mexican burrito chain, Chipotle, but Turner said Illegal Pete’s has a broader menu and a full service bar, with live music. The restaurant will serve breakfast, lunch and dinner and be open daily until 2:30 a.m.

The company has hired Tucson’s Rob Paulus Architects Ltd. to renovate the Landmark building, a 1910 house in the shadow of the University of Arizona. The building has been home to a clothing store since the early 1960s, first under the name Franklin’s, then as Landmark.

Turner said workers have stripped some of the interior plaster to reveal the building’s original bones.

“We uncovered some really neat parts of the architecture, and it’s gorgeous,” he said. “We are really trying to maintain (the historic integrity) and open the building because it’s so pretty. It’s just beautiful, man.”

Plans include tearing down interior walls to open up the space, creating a bar downstairs and another one upstairs, and building a deck over the front patio. A second deck is planned in the back and restrooms will be added to both floors. Part of the kitchen will be located in the basement, Turner said.

Illegal Pete’s made national news late last year as it was opening its seventh restaurant, in Fort Collins, Colorado, a city with a sizable Latino population. Critics said the name disparaged Mexican immigrants; Turner maintained that the name was meant to be “mysterious” and playful, and said it pays homage to his late father, also named Pete.

Turner said the controversy took him by surprise since no one had questioned the name in the 19 previous years that he had operated the restaurants.

“It was totally unexpected, and it became way bigger than I could ever imagine it happening, to the point that the New York Times was there for our opening,” he said. “It was a really difficult four weeks out of my life.”

Residents of Fort Collins urged Turner to change the name, but “I did some soul-searching and really know that (the name) was not about” anti-immigration, he said.

“And I just can’t do it. It’s who I know myself as and many, many people know about us around the state (of Colorado). … We are great community partners, great employers. We provide great opportunities,” he said. “Words change in meaning. That word in particular is not a bad word. And who knows if it changes. Hopefully there will be some (immigration) reform in the next five years and things will change back.”

Turner said, though, that he anticipates some sort of protest when he opens in Tucson — his first venture outside of Colorado. He is shooting to open in late August, to coincide with the start of the 2015-16 UA school year.

Lea Marquez Peterson, president and CEO of the Tucson Hispanic Chamber, said she has never heard of Illegal Pete’s, but the name doesn’t concern her. She said she is more excited by the higher wages the restaurant is promising.

“I believe that it is good news for Tucson if Pete has a financial model that supports paying a higher wage,” she said in an email interview.

Contact reporter Cathalena E. Burch at cburch@tucson.com or 573-4642. On Twitter: @Starburch.

I cover music for the Arizona Daily Star.