On a recent Saturday, sunshine streamed over the city, the temperature settled comfortably in the mid-60s, and Newbury Street was as busy as I can ever remember seeing it. Restaurant patios were full to bursting. The masses strolled, sipping iced coffee, an army of empty stomachs needing to be fed.
The diners are coming back, vaccinated and ready to hear about the specials of the day.
Some of the restaurants they would have visited pre-COVID have not come back with them. Statewide, 3,400 establishments — 23 percent of the total — closed permanently during the pandemic, according to the Massachusetts Restaurant Association. Although the MRA doesn’t break the numbers down by individual city, “what we do know,” says president Bob Luz, “is that Boston has been the hardest hit through all of this.” In Back Bay alone, the closures include Bar Boulud, Cafeteria, Kashmir, Lir, Max Brenner, McGreevy’s, and Post 390. In Kenmore Square, Eastern Standard — one of the city’s most beloved restaurants — is gone, along with proprietor Garrett Harker’s Island Creek Oyster Bar and the Hawthorne. Each shuttered restaurant has its own story, although many share the same themes: high rents, uncooperative landlords, steep drop-offs in business, the workers and tourists and students and eventgoers absent from the city.
But alongside all of this loss, the vacancies now present an opportunity. These are high-profile spaces. Who will fill them and feed the city? The choices landlords, developers, and restaurateurs make in the coming months could shape the flavor of the restaurant scene for years to come.
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When it comes to local character, Boston has so much to work with: famously excellent seafood, diverse cultures and communities, rich history, great live music, the arenas of academia, agriculture, medicine, technology. But even before COVID, it was a challenging place to run a restaurant. “The problem is Boston is the third most expensive city in the country in which to live and do business. The rents have gotten so high,” says restaurant broker Charlie Perkins — $150-$170 per square foot on Newbury Street and $200-$220 on Boylston, prepandemic, for example. The rule of thumb is that total occupancy costs shouldn’t exceed 8 percent of sales for a full-service restaurant, he says: “If a restaurant’s rent is $150,000, all in, the restaurant needs to do $1,875,000 in annual sales, year one.” That’s a lot of small plates.
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When Perkins started out in the ’80s, it was easier for young chefs to break out and do their own thing: “Gordon Hamersley, Chris Schlesinger, Todd English, Lydia Shire . . . Rent wasn’t a problem because your sales increased every year.” Now, he says, base rent goes up 2.5 to 3 percent annually while sales are often flat or declining. And then there’s the cost of a liquor license. Before COVID, the average price was $450,000 for a full liquor license and $150,000 for beer and wine.
That necessity is cheaper right now — about $210,000 for the former and $80,000 for the latter. Rent is down in some places, too, by $50-$60 per square foot on Newbury and Boylston, Perkins says. Who can afford to take advantage? Those with access to capital, oftentimes chains and large restaurant groups like Big Night Entertainment Group (which has a dozen venues) and Lyons Group (which has 21), both of which say they are looking at or have committed to new spaces. This category also includes out-of-towners in expansion mode. For instance, Contessa, opening in June at the top of new luxury hotel the Newbury Boston, is operated by New York-based Major Food Group. Behind such restaurants as Carbone, the Grill, and Parm (a branch of which is coming soon to Burlington), the restaurant group has opened properties in Hong Kong, Las Vegas, Miami, and Tel Aviv, with more cities in sight.
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That’s not to knock such outfits, which can run excellent restaurants; I was plenty happy to take a bagel break from the glitz at the Vegas branch of Major Food Group’s Sadelle’s a few years back. But what they don’t do is enhance that local character — the feeling of being in a unique, cool place that makes people want to live there and visit with their tourist dollars. Portland, Maine, is one nearby example of how a strong restaurant scene friendly to smaller, independent operators can turn a city into a culinary destination; Harvard Square, on the other hand, shows how a place can change when such operators can’t compete. (Remember the Tasty?) Plus, out-of-town expansions into Boston don’t always live up to sister restaurants in higher-profile cities. Witness: Fuku, the now-closed Seaport branch of Momofuku restaurateur David Chang’s fast-casual fried chicken chain, which opened around the same time as Los Angeles got a full-bore Chang effort in the splashy, buzzy Majordomo.
And how will the city fulfill missions of diversity, equity, and economic opportunity that were touted as priorities in response to the Black Lives Matter movement? That can’t just be lip service. With Massachusetts on its way toward reopening, the rubber hits the road. “It all begins with intentionality and being committed to first of all not repeating what happened in the Seaport,” says Segun Idowu, president and CEO of the Black Economic Council of Massachusetts. The development of that neighborhood largely benefited white business interests. “There are several opportunities now in Dorchester Bay City, Suffolk Downs, big projects where we can make sure we’re not creating wholly segregated communities and also are creating opportunities for entrepreneurs of color.”
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One of the big questions now is who will move into the former Eastern Standard space, which closed due to a rent dispute between Harker and landlord UrbanMeritage. (Both local and out-of-town prospects have reportedly looked at the property.) It’s a maddening outcome for a long-lived, hugely popular, and perennially well-run restaurant. Contrast it with what happened at Post 390, just about a mile away. In September, the Himmel Hospitality Group decided to close the Back Bay restaurant. Owner Chris Himmel — also behind the nearby Grill 23 and Bistro du Midi, as well as Harvest in Cambridge — was invested in the neighborhood and the space (he used to live in the building). Rather than walk away, he is opening a new restaurant there with Bistro du Midi chef Robert Sisca in July. Grand Banks Fish House, a two-story seafood restaurant, is a passion project: Himmel and Sisca are avid fishermen with close ties to area purveyors. It’s also a savvy recalculation, with a concept and location that will be a strong draw for locals and tourists alike. Their landlord Related Beal has been supportive, Himmel says. But then, what more could a landlord want in these circumstances than an experienced, committed local operator? “My heart goes out to anybody who got caught up in an unfortunate situation. We were really lucky and had landlords at all four properties that were great about communicating and being open minded,” Himmel says.
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Grand Banks is an ideal outcome for a sizable property in a prime location. But given the costs and the risks, will the next generation of local talent open in the city or head elsewhere? “In the city, sales are down as much as 30 to 50 percent, but in the suburbs it’s a totally different scene,” Perkins says. New business models that came to the fore during COVID — pop-ups, delivery services, meal kits, baked goods sold via Instagram — mean entrepreneurs can circumvent restaurants altogether (along with the challenge of staffing them, one of the major hurdles facing the industry right now).
Juan Pedrosa, a Boston chef who worked at restaurants such as Yvonne’s and Lolita, is now opening a restaurant with friend Stephen Devine — in New Hampshire. Bar Salida will be an outdoor restaurant on Weirs Beach, on the shores of Lake Winnipesaukee. “New Hampshire is extremely user-friendly as a first-time business owner/operator. Licenses and permits here are very affordable,” Pedrosa says.
And restaurateur Michael Aldi, who previously owned Pier 6 in Charlestown and ReelHouse in East Boston, is focusing on Revere, where he sees the opportunity to create Miami-esque beachfront experiences. He’s already opened two concepts, Dryft and Fine Line. A third, Cut 21, will open this summer in the new Ryder project, a 200-unit residence.
“I would stay far away from downtown Boston at this time,” he says. “The rents are way too high. I’m sure other restaurant people are thinking the same thing: that the opportunity may not be in Boston anymore. My restaurant in Revere is doing the exact same numbers as my former properties in East Boston as well as Charlestown. That being said, my rent is almost half of what it is in Boston. I’m not working for the landlord at that point. I’m working for myself.”
So how can Boston preserve and build on its unique local restaurant scene? This hasn’t always been the city’s forte: With the Seaport, there was the chance to develop something filled with personality, reflective of the city’s diversity, history, culture, and fishing industry. Instead, we have glossy, expensive waterfront dining, which may have its own appeal, but many of these properties would fit into any American city. How can capitalism and character comfortably coexist in the restaurant landscape? That’s a question that would also be apt in any American city today.
There is no magic bullet, no one good answer. During COVID, funds like the High Road Kitchens Restaurant Relief Fund were created by the city to support small, local restaurants, prioritizing those owned by women, people of color, and veterans. Such restaurants would benefit from ongoing attention of this kind. “There should continually be small grants: You’ve gone through this program we created, now here’s some startup money you can either pay back with no interest over time or you don’t have to pay back at all,” says City Councilor Lydia Edwards, who helped develop the High Road Kitchens fund. Small, family-owned businesses also need to be first in line for opportunities. “They cannot compete with big chain names and big chain dollars. The city has to make a commitment to them first and foremost,” Edwards says — offering breaks on taxes and fees, assisting with permitting and other city processes. “That’s where they lose a lot of time and money and competitive edge. The big guys walk in and pay lawyers to do it, but small businesses have to do it themselves. The city needs procedures to guide them through and move them through the line.”
Landlords also have a role to play. They can work with restaurateurs, offering alternate rent structures (e.g. rates that start lower and increase contingent on success), construction allowances, and similar accommodations. They can shift their mindsets when residential properties are involved, viewing restaurants as amenities that help attract and retain tenants rather than as profit generators. “Restaurants are not a moneymaker for these buildings,” says Damian Szary, principal at Redgate, the firm behind the Revere properties that are home to Aldi’s restaurants. “If you’re able to attract a desirable, hip, cool restaurant in the base of a building, you’re setting the tone for the building in terms of what happens up above.”
Such measures are good for the soul of the city. And that’s a good investment, because it helps ensure Boston a future as the kind of place where people want to live and visit.
“Every day I think about how lucky we are,” says Chris Himmel. “A lot of people who had dreams set aside and crushed, it would be amazing to see opportunities for people like that. But it’s not going to happen unless the developers and landlords want that, too.”
Devra First can be reached at devra.first@globe.com. Follow her @devrafirst.