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Creating Luxury in Days of Denial

 
Mr. White, the congenial chef behind Convivio and Alto, was referring to extension cords that hung like snakes from rafters inside Marea, his ultra-deluxe Italian seafood restaurant expected to open in early May on Central Park South. At least 45 workers milled around the dining room in early April, six of them flown in from Italy to install Indian rosewood paneling and a honey-colored onyx wall backlighted by tiny bulbs.

But by precarious, he could just as easily have been talking about Marea’s future. Last July when he and his business partner, Chris Cannon, announced their latest venture, the city seemed flush. Since the stock market’s collapse, though, worried New Yorkers are rejecting anything opulent, driving even gold-card-carrying customers to the nearest Shake Shack.

Marea is one of a surprising number of high-end restaurants set to open this year. Their timing may be inopportune, but with leases signed and construction underway before the economy took its nose dive, the restaurateurs had little choice but to forge ahead. Some, like Mr. Cannon and Mr. White, have sought to pare their rent while maintaining their original vision. Others have cut prices or added new dishes to appeal to a wider array of patrons. Everywhere, there is anxiety, as owners learn to adapt to the new austerity.

The downturn has had benefits: Mr. Cannon said that some suppliers and contractors had shaved their fees, saving the restaurant about 30 percent on construction materials and labor. (They plowed those savings back into refined touches like hand-polished lacquer radiator covers.) The two also went back to their landlord three months ago to renegotiate their rent. They say it was already much less than the $750,000 a year the former tenant, the San Domenico, was reported to have paid. The landlord agreed to defer a portion of the rent for two years, at which point, Mr. Cannon hopes, the economy will have rebounded.

Still, the restaurant will cost more than $4.5 million, and they have been paying rent since signing their lease last summer. And Mr. Cannon concedes that he wishes the money had started to roll in three months ago.

“I have three kids to support,” he said. “I don’t have an option to fail.”

It is a common refrain from the Upper East Side to TriBeCa. Among the slate of upcoming restaurants is SD26, a venture from Tony May that has already delayed its opening until the fall. (Mr. May was the owner of San Domenico, which used to occupy Marea’s space.)

Even before the economic implosion, Brushstroke, David Bouley’s elaborate vision of a robata grill paired with a kaiseki restaurant, was hampered with troubles, including a battle to get its liquor license. And two established restaurants, Oceana and Aureole, are leaving their East Side town houses for larger spaces in Midtown, with plans for grand openings this fall.

“Everyone wants to make a 15 percent profit margin,” said Nick Livanos, whose family owns Oceana. “But if you make 10 percent you are happy.”

That’s if. “A bunch of restaurants are going to close in the next year,” said Clark Wolf, a restaurant business consultant. “There will be a weeding out. Restaurants have to be careful how they calibrate the experience for the diner. People don’t want to feel like they are paying for a stained-glass ceiling.”

As the Livanos family closes Oceana this summer before moving to a larger, 180-seat space on the ground floor of the McGraw-Hill Building near Rockefeller Center after Labor Day, they are taking the opportunity to overhaul their approach. Oceana’s 54th Street location resembled the cosseted dining room of a luxury yacht, with views of the horizon off the deck.

In the new restaurant, floor-to-ceiling windows look out onto 49th Street. There will be outdoor seating and a bar where diners can order, say, a salmon burger for about $15 from a casual menu that will be offered all afternoon. Lunch and dinner will be served in a more formal dining room.

In some ways, the looser style will help to trim costs. Currently, Oceana covers every table with linens, which have to be cleaned and pressed for a princely sum. But some wood tables at the new Oceana will be left bare.

Mr. Livanos said he has grappled with the same challenges others have. “The question was, how do you make Oceana less formal and still give the right level of service?” he asked. “We are all looking toward comfort. We don’t want to be over-stimulated by the experience. There is always room for a Per Se experience, but at the same time people want to enjoy something simple, you know, like Craft.”

Oceana will also lower its prices. He said fish entrees now priced in the mid- to high-$30s will drop to near $30.

This approach carries some risk, according to Mr. Wolf, the restaurant consultant, who said that seafood restaurants are among the most vulnerable in a recession. “Anyone who is serving seafood has got to be concerned,” he said. “No one wants cheap seafood.”

Mr. Livanos said that Oceana’s chef, Ben Pollinger, will not sacrifice the quality of the fish, but serve it with simpler garnishes. (As for Mr. White of Marea, he thinks the market is still strong. “In a poor economy, people realize fish is fragile and will pay for it,” he said.)

Mr. Livanos expects the new location — sandwiched between Rockefeller Center and the theater district — will give Oceana a diverse audience, providing some cushion from the recession. “If I was opening up downtown or in the financial district, I have to tell you, I’d be nervous,” he said.

For some longtime chefs and restaurant owners, the worries are achingly familiar. Just as the markets were reeling from the crash of 1987, Charlie Palmer signed a $3 million mortgage on the Upper East Side town house that housed Aureole. He styled the restaurant, which opened the next year, after Lutèce, with an American flair.

But Mr. Palmer contends this recession is different — likely to be more severe and longer. What worked the last time may not succeed today, he said.

“The way people want to dine is not the same as 20 years ago,” he said. “You can’t have the big deal dinner every night of the week. So we adjust.”

Last year, Mr. Palmer announced he was closing Aureole on East 61st Street and relocating to the Bank of America Tower at One Bryant Park — at a cost of about $8 million. His original plan to make the food prepared by Aureole’s executive chef, Christopher Lee, more wallet-friendly has taken on new importance given the economic downturn.

He will serve prix fixe meals in the dining room. (A seven-course tasting menu with wine now costs $230.) But in a new casual barroom, he will also offer à la carte dishes ranging from small plates for $12 to $42 entrees. Following the lead of many new restaurants, the barroom will stay open afternoons and evenings. And Mr. Palmer is building private dining rooms, something he did not have space for at the old restaurant.

“We are not looking for a different clientele,” Mr. Palmer said. “We are just trying to give people more options.”

He insisted he is not going to cut the cost of dishes, though, just to get patrons in the door. “I don’t believe in slashing prices,” he said. “You have to ask yourself: ‘How are you doing that? Is the quality cut rate?’ We are not inexpensive, but it is good value.”

Instead, he has made some minor adjustments to his initial plan. For instance, the new Aureole will offer no corkage fees on Mondays. And there will be themed events, including a Sunday supper and a movie night. (Métrazur, Mr. Palmer’s restaurant in Grand Central Terminal, offers a $4 beer night and classes in cheese and wine pairing.)

Mr. Palmer believes he’s protected himself by diversifying, including owning an online wine store and a boutique hotel.

Mr. White, buoyant and optimistic, almost seems to relish the dangers facing so many restaurants. “There are too many in New York,” he said. And yet he also sees this economy as an opportunity for anyone brave enough to blunder ahead. Eventually, the recession will be over and diners hungry for a little extravagance will start spending again.

At that point, Mr. White predicted, “We will be one of the only ones around.”

Category: industry news