Can Restaurants Be Saved?

Written by Megan Finnegan Bungeroth on . Posted in News Our Town, News Our Town Downtown, News West Side Spirit.


John Philis behind the counter at his restaurant Lexington Candy Shop, a 1920s style soda fountain that’s been in business for 89 years and passed down through three generations. Photo by Megan Bungeroth

John Philis behind the counter at his restaurant Lexington Candy Shop, a 1920s style soda fountain that’s been in business for 89 years and passed down through three generations. Photo by Megan Bungeroth

A recent panel of restaurant and real estate experts posed the question — can restaurants be preserved like landmarks?

Picture your absolute favorite restaurant. If you wanted to ensure it would remain operating for the next 50 years, what would you do? Immortalize the menu? Clone the chef – or, more realistically, have him train apprentices who will take over when he leaves? Keep hiring the same friendly, helpful service staff? Give the owner an influx of cash so that the restaurant doesn’t fold to pressures of increasing supply, labor and rent costs? Incentivize the landlord so he doesn’t oust the place in favor of a more profitable chain outlet?

And even if you could do any or all of these things – do you think you should?

Last week, the Greenwich Village Historic Preservation Commission hosted a forum at Judson Memorial Church across from Washington Square Park to ask, and attempt to answer, those very questions. Moderated by the GVHPC’s Karen Loew, the panel of speakers was comprised of Eater NY food critic Robert Sietsema, assistant professor of urban planning at Columbia’s Graduate School of Architecture, Planning and Preservation Stacey Sutton, president and owner of Tower Brokerage, Inc. Robert Perl, and food writer and critic Mimi Sheraton.

The issue that the audience of more than 100 people, many of them restaurant owners, had come to debate was whether and how restaurants could be preserved in a city where turnover is abundant, and a successful, thriving business model does not guarantee longevity. Recent news that Danny Meyer’s famous Union Square Café will soon be forced from its eponymous home by a precipitous rent increase was fresh on everyone’s mind; many small restaurant owners wonder how they can compete if a food industry behemoth like Meyer can’t.

Even asking the question about restaurant preservation, however, is a fraught exercise that exposes the tensions, and potential contradictions, between free market capitalism and an instinct to keep history intact.

Loew addressed that dichotomy in her introduction. “Skeptics will ask, how do you preserve a business, a living breathing thing?,” she said. “Supporters will ask, what business person can pay double or triple the rent when the lease is up?”

The rent conundrum, it seems, is paramount. While the panel members discussed all the myriad reasons a restaurant can succeed or fail, none of those reasons loomed as large, and perhaps insurmountable, as that of the control a landlord has of a restaurant’s ultimate fate.

Sietsema, who earlier this year caused a stir when he published his own proposal on preserving certain restaurants in the city on Eater, hit this point early and often.

“Gray’s Papaya went out of business. It was a cheap eating place people depended on. It had a significance to the history and story of New York,” Sietsema said, pointing to the long-standing hot dog joint as one example of a place that should have been saved. “Why is it that restaurants like this have to go out of business when the landlords make ridiculous demands?”

Restaurants, even successful ones, survive on thin profit margins, and a sudden large increase in any costs can throw that out of balance. A woman in the audience stood up during the Q&A – she was remaining anonymous, she said, for fear that something she said would get back to her vindictive landlord – and related the exasperating situation she found her own restaurant in, year after year.

“The games that my landlord plays are just on another level, and there’s no one to turn to and say, this is not normal,” she said. Her restaurant on Gansevoort Street in the Meatpacking District is the only one left standing on her block, she said, and it’s been there for 16 years. And every year, she fights astronomical increases and allocates more money to pay her landlord. Recently when their lease was up for renewal, the woman said, she received a retroactive water bill for $250,000.

“The man [her landlord] won’t even sit down with us to negotiate our lease. We have 15 employees, we contribute to the community; we’re a legitimate business,” she said. “I allow myself each year to get extorted. We’re keeping up, but barely.”

Some posit that market forces should not be curtailed by regulation, and that the numbers will bear out what people really want to save.

“Who says,” asked Mimi Sheraton, “that future generations will want to go to the same old places?”

It’s a fair question, but there are a handful of restaurants in the city whose very existence shows that history and market demand can work together.

At the Lexington Candy Shop on the Upper East Side, co-owner John Philis has been watching customers come and go from behind the counter for his entire life. The shop at Lexington and 83rd Street is surrounded by chain stores like Starbucks, Hot & Crusty, Shake Shack, and it’s been in business continuously since 1925, founded by Philis’ grandfather; it’s on Sietsema’s proposed list of restaurants the city should preserve. The soda fountain and diner is now a unique relic, but restaurants like it used to dot the neighborhood and the city. Philis and his business partner know that they keep going year after year partly due to a consistent and quality product – the $8.50 milkshakes, while a bit steep, are exceptional, and made with real ice cream brought in from Philadelphia – and partly due to their ability to transport diners back to an earlier time when Coke came in bottles and you could sidle up to the counter at any corner shop and order a tuna melt and an egg cream for a couple bucks. The prices have risen, of course, but the food and atmosphere remains largely unchanged. You can still sit at the counter and order an egg cream; they haven’t made any major renovations or changes to décor since 1948.

But one of the most crucial elements of their longevity, Philis acknowledges, is the cooperation of their landlord.

“We have a very fair landlord,” Philis said. His rent goes up every year, but he feels that his landlord deals in good faith. “From what I see and hear, that is the exception.”

Philis also has made a concerted effort to keep up with the times, not by changing his food but by updating his business practices. His wife operates the shop’s social media accounts, and they have a website. They advertise heavily – something they never used to do in his father’s day, Philis said – to tourists, putting ads on the NYC visitors’ information channels that run in hotel rooms and in tourist brochures. They’ve even offered a Groupon.

Philis has seen a lot of neighborhood institutions like his fold, but he is hesitant to suggest that the city should regulate or save them all. He praised Danny Meyer, by way of example, for being a great chef and restaurant owner, and spoke admiringly of his Union Square Café, but he wouldn’t necessarily include it on a list of storied institutions to be preserved. For the small number of generations-old restaurants, he thinks that the city could offer protection in the way of lowered property taxes, or zoning changes like what has been done on Columbus Avenue to restrict banks, or some kind of legal way to allow landlords to make a reasonable profit but not extort these culinary gems. Still, he thinks it could only work if the business model is already viable.

“You can’t just do it to save a place from going out of business,” he said. “If it has historical value, it needs to be protected. There aren’t many of these businesses left. In the fabric of New York, there just aren’t that many businesses that deserve this kind of protection. I happen to think we’re one of them.”

Not many would argue with putting Lexington Candy Shop on a short list of restaurants worth saving. But what about the neighborhood institutions without the historic façade and intergenerational story? Big Nick’s Burger and Pizza Joint, on Broadway between 76th and 77th Streets, was a beloved Upper West Side eatery. The food was shockingly varied – you could order classic American fare along with Greek standbys and Italian favorites, from a menu with hundreds of items – and reasonably priced, a boon for local families looking for a cheap and crowd-pleasing meal out. It closed last year.

On the restaurant’s Facebook page, a post explained:

“After 51 years, we have lost our lease after two years of difficult and torturous negotiation…We cannot handle an increase from $42,000 to $60,000++ a month for 1,000 square feet.”

Many decried the loss of Big Nick’s – but would it have even made it onto the radar of a preservation panel in the first place?

Sietsema might not think so; he wants to only protect places where the food is good. Robert Perl, who has had first-hand experience as a landlord to restaurants, said that’s not enough of a metric either.

“Sometimes the restaurateurs have more money than the landlords. Do we want to look at this as a factor?” Perl said. He also pointed out the potentially thorny moral problem of deciding who should get help from the city – what if a restaurant owner is abusing his workers, not paying fair wages?

No one at the panel, or for that matter around the city, could provide easy answers to these questions. But it’s worth considering, the next time you step into your favorite local spot – what would you do to keep it around?

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