Are High Rents Pricing Manhattan's High-End Restaurants Out of the Market?

Categories: Longform

Courtesy Union Square Cafe
Here's how Danny Meyer found the storefront on East 16th Street in the mid '80s when he opened Union Square Cafe.
Celebrity chef Bobby Flay closed his Fifth Avenue restaurant Mesa Grill last year, laying to rest a landmark that, when it fired up its burners in 1991, was the only destination restaurant in an area dominated by garment factories.

In February, Keith McNally shuttered Pastis, a Meatpacking District institution, amid rumors that the building it inhabited was slated for renovation. He initially maintained he would reopen there, but now says he will have to relocate.

Wylie Dufresne will close wd~50 before the year is out, removing an internationally famed bastion of molecular gastronomy from the Lower East Side block it helped colonize.

Robert Menzer
The Union Square Cafe today.
And late last month, Danny Meyer told the New York Times that he intends to close Union Square Cafe, a restaurant whose renown helped to revitalize the neighborhood from which it took its name when it opened on East 16th Street just west of the park in 1985.

All of these restaurants are victims of real estate changes they played a part in creating: All are either being forced out for redevelopment or discovering at the tail end of a long lease term that they can't afford the current market rent. And they almost certainly won't be the only ones to go. At the turn of this century, restaurant owners commonly signed 10-year leases with a five-year option tacked on. (Many still do.) That means many restaurants that signed leases between 1999 and 2004 will likely face the threat of extinction.

Given that New York City's current restaurant landscape is built on a foundation of institutions that opened during that era, an industry upheaval might be afoot. Just as distressed areas can engender bargains, spruced-up blocks can take them away.

"It's hard to come to grips with the notion that our success has, in part, contributed to our inability to remain in our neighborhood," Meyer wrote in a piece published on the Times' July 2 op-ed page. "There are neither victims nor villains in this story; no sympathy is being asked for, and no fingers are being pointed. But as a city, we've got a problem." (Parts of the op-ed didn't quite add up; for more on that, see "Danny Meyer's New York Times Op-Ed Proves Indigestible.")

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