Big Apple rent hikes affect NYC stalwarts

Not even the hugely successful Union Square Cafe, wd~50 or Gray's Papaya can be immune from the avarice of New York’s landlords, says Michael Jones

On the back of Wylie Dufresne’s shock announcement in early June that his hugely popular wd~50 restaurant on Clinton Street will close this November, Danny Meyer’s Union Square Café has also revealed that it will forfeit its lease at the end of 2015 and up sticks to an undetermined new location.

The reason is best summed up by Dufresne: “It’s a real estate thing,” the pioneering chef told The New York Times on 10 June.

That ‘thing’ is a growing concern for restaurateurs across New York City as soaring rents from land owners are pricing established venues out of the market and deterring start-ups.

In Dufresne’s case specifically, even a slew of recent awards, rave reviews, a continually packed dining room and a bulging forward bookings list was not enough to deter the developers. Icon Realty Management is planning to put up a new building on the site where Dufresne has carved a reputation for his innovative and avant-garde cuisine over the last 11 years.

Dufresne stoically told the paper that he planned to “eventually move his vision to a different location in the city,” although he has so far not revealed any further plans.

And that story has now also affected the previously untouchable Union Square Café, the landmark eatery that kicked off a string of successful restaurants 30 years ago for CEO Danny Meyer.

Meyer announced that, due to a significant rent increase his firm Union Square Hospitality Group will forfeit its lease at the end of next year.

The East 16th Street real estate will be put the market later this week according to brokers Robert K. Futterman.

“There’s no such thing as a New York restaurant that is immune to real estate,” Meyer told The New York Times.

Under threat

As USHG’s other restaurants operate independently, profits from sister venues could not be used to cover the new rents and, though Meyer would use his own cash “in a heartbeat,” he felt that the logistics could not be made to work.

There are plans afoot to move the restaurant elsewhere in Manhattan but “not necessarily in or near Union Square.”

Otherwise, in January of this year, much-loved Greenwich Village hot dog institution Gray’s Papaya was force to leave its famous Sixth Avenue residence because its landlord upped the rent “to $50,000 from $30,000,” according to owner Nicholas Gray.

With established, popular dining venues like these under threat it would appear something has to give. Destination eateries, from world-famous hot dog diners to Michelin-starred restaurants, are often an intrinsic reason behind attractive real estate investment in the first place. But when landlords get greedy and restaurateurs are forced to take their trade elsewhere, a whole neighbourhood can feel the effects.

And that might not be a bad thing, says a thoughtful Dufresne. “That’s the story of New York,” he told The Times. “In some ways it’s part of the beauty of New York City. It’s in a constant state of flux.”

Michael Jones


Watch out for an exclusive full-length interview with Wylie Dufresne in the Q3 2014 edition of Foodservice Consultant.

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