Most people realize that the expense and hassle of opening a restaurant in New York City is daunting, but a 1980 New York Magazine story by Paul Tharp laid it out in excruciating detail.
Generally new restaurants have a short run, but the piece underscored this observation by noting that the city’s Restaurant Association claimed that three of every four places shut down or had new owners within five years. Tharp added that a real estate broker said that one out of ten operating restaurants was for sale “at any given time.”
New York was a particularly tough city for restaurant operators. Higher food costs there meant that the consumer was going to pay four times the cost of a meal’s raw materials rather than three times, then the national norm.
Expenses involved in opening a new restaurant were staggering. Although the total estimate for a 40-seat restaurant of $162,018 given in the article seems quite low by today’s standards, it wasn’t then. The biggest chunks of money were for payroll, kitchen equipment, rent, and remodeling costs.
But that was just the monetary total. Tharp also outlined a time factor, noting that the amount of time spent getting set up was often not anticipated by those lacking previous experience.
The article observed that few new owners expected to be putting in 14-hour days the first year working in the kitchen or waiting on tables, virtually abandoning their personal life. Nor did they realize how much time and patience would be required to obtain licenses and satisfy city regulations, such as taking and passing a 15-hour Health Department course in sanitation and food handling.
And then there were the exasperating bureaucratic hurdles. For some it was a surprise that stove vents were required to extend to the top of buildings. If the Buildings Department found that the restaurant had not obtained a permit and met city standards for remodeling, an owner might need to tear out all the work that had already been done and start over.
Taking over an existing restaurant may have avoided the hassles of remodeling, but its costs were likely much higher and brought their own hazards. Tharp relates a horror story involving two inexperienced men, elsewhere termed “babes in the gastronomic woods,” who wanted to take over a former Toots Shor restaurant for a bargain price if the new owners also assumed the restaurant’s debt. They teamed with major investors who pulled out and left them at sea. They renamed it Jimmy’s after soon-to-vanish partner Jimmy Breslin. Although at first it was quite popular, business then fell off with the recession and they realized they couldn’t handle the large staff or deal with unexpected costs such as credit card service charges, electricity rate hikes, and a temporary loss of their liquor license. Even adding an upstairs cabaret and a downstairs jazz club and hiring Jack Lemmon as Monday night bartender failed to attract the disappearing crowds. After about 34 months capped by a flooded basement, Jimmy’s shut down.
If Tharp’s report didn’t contain enough warnings, a published letter from a Manhattan realtor added another note of caution. He pointed out that owners of “quality buildings,” fearful of restaurant failure rates, tacked on security deposits equal to as much as five months rent, plus additional payments to make up for premiums required by insurers who assessed a higher fire risk for a restaurant tenant. Altogether, he estimated the operating budget should be 30% to 40% higher than Tharp’s.
Perhaps to offset all the bad news, the story included five thumbnail sketches of restaurateurs who overcame obstacles. I took a closer look at their subsequent careers, which raised some questions about just how well they all did. Three seemed to be well-connected pros who, despite disappointments with some ventures, did well overall. One of those briefly profiled was Peter Aschkenasy who had a number of successes including Charley O’s and U.S. Steakhouse, but who hit a snag trying to revive the classic New York restaurant Lüchow’s [pictured at top].
One restaurateur had a place I could find absolutely no trace of anywhere, and another had a single tiny restaurant with a short life. It was operated by the only woman mentioned in the story, chef Leslie Revsin, whose professional biographies unfailingly cited that she was the first woman chef to be hired by the Waldorf-Astoria. She opened Restaurant Leslie in Greenwich Village in 1979. With only nine tables and no liquor or wine license, it lasted only a few years despite critical praise. Following that she cycled through about nine New York restaurant kitchens including Argenteuil, One Fifth Avenue, and The Inn at Pound Ridge, often as executive chef. Eventually she turned to writing cook books.
© Jan Whitaker, 2024
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Restaurant-ing through history 