The Real Deal New York

Feeding frenzy at outer-borough restaurants

Despite belt-tightening, Brooklyn and Queens eateries draw more customers

March 31, 2008
By Sarah Portlock

At 6 p.m. on Sunday evenings, the line outside Lucali, an 18-month-old brick-oven pizzeria in Carroll Gardens, can be 50 people long. That’s before the restaurant even opens; the only word the chef and owner, Mark Iacono, can find to describe what happens next is “chaos.”

“That’s when it’s really hectic,” Iacono said, adding that the wait can be as long as two hours.

Even as economic uncertainty looms, leaders in the restaurant business say they expect New York City’s eateries, especially those in the outer boroughs, to keep doing well. While the logic may seem counterintuitive — belt-tightening and all that — many outer-borough restaurants are offering less expensive alternatives for New Yorkers who are notoriously averse to cooking for themselves.

“People are still going to eat,” said Chuck Hunt, executive vice president of the New York State Restaurant Association. “It may be that they spend less money, but indeed, they’re still going to have to eat.”

And in the outer boroughs, per-square-foot rents are far cheaper than they are in Manhattan. While rents in prime locations in the West Village can reach $250 per square foot, with prices at $125 per square foot on some side streets, rents on Smith Street in Carroll Gardens or on Fifth and Seventh avenues in Park Slope — all major restaurant rows — are only $75 or $100 per square foot, said Benjamin Fox, president of Winick Realty Group.

Fox noted that the only other area of Brooklyn that commands $100-per-square-foot rents is Montague Street in Brooklyn Heights. In parts of Williamsburg off Bedford Avenue, Fox said, rents are as low as $40 per square foot.

“When it comes to restaurants, there’s no such thing as an off location,” he said.

In Brooklyn, it can be easier to turn a profit in the restaurant business because the rents are cheaper, and, in many cases, the owners are also doing the cooking.

In Manhattan, many chef-owners are forced to open several restaurants just to stay profitable, said Clark Wolf, the president of Clark Wolf Company, a Manhattan-based food, restaurant and hospitality consulting firm. He said owning a Manhattan restaurant is an all-around “bigger deal” because of those high core costs.

Charlie Kiely, the owner and chef of the Grocery, an eight-year-old Michelin-starred restaurant on Smith Street, said the smaller spaces allow many Brooklyn restaurants to reach capacity. “It allows us to put food on the plate at a much more reasonable price,” Kiely said.

In addition to the lure of those reasonable prices, the time, energy and effort it takes to travel to Manhattan also prompts many people to stay close to home and opt for the restaurants, especially in Brooklyn but also in Queens, which is not quite on par with Brooklyn, but is growing, said Tim Zagat, founder and publisher of the Zagat guide.

Wolf noted that in the outer boroughs, residents really seem to have a “pride of place” and are glad to be supporting entrepreneurs from their own communities.

So what do the lower rents of outer-borough restaurants mean for customers? In most cases, they trickle down into lower menu prices, which are in turn luring in more diners.

In addition, Wolf said that if interest rates drop further with a brake on rent increases, more entrepreneurs may take the opportunity to open restaurants in new areas.

“By the end of the year, there might be some opportunities in real estate that only come cyclically,” he predicted.

Restaurants are typically the first retail tenants signifying a neighborhood’s pending arrival. Ditmas Park in Brooklyn is a case in point.

Vipin Agarwal, an owner of Picket Fence, a “comfort food” restaurant in the area, said business has been good since he took over the spot from its original owners last year.

“It is a neighborhood restaurant, and it is reasonably priced,” Agarwal said of the four-year-old eatery on Cortelyou Road. “When [diners] are not in the mood to cook or wash the dishes, they can come over to the restaurant, and we are there to serve them.”

Contrary to the image of restaurants as possibly attracting vermin or being difficult, Hunt of the Restaurant Association said landlords “love” to have restaurants as tenants. “There have been restaurants that have brought a lot of neighborhoods back from decay,” he said. “Restaurants have made it possible for the landlords to demand higher rents and, to some extent, [those rents have ultimately] driven restaurants out of some areas.”

In some examples, he added, rents are tripled once the original restaurant’s lease is up.

Tim Zagat points to what he calls the “BATH” restaurants: “Better Alternatives Than Home.”

The 2008 Zagat guide rated 135 outer-borough restaurants in the under $30 a meal category. That number was up from 99 just four years earlier. Zagat said that the $30 marker is used as a measure of an “affordable” meal because “they buy wholesale, you buy retail; they are very efficient in producing the food, whereas you are fairly inefficient.”

Meanwhile, Zagat, which began publishing a Brooklyn-only guide in 2003, had more than 200 overall restaurant listings in its most recent edition, which came out in December.

Since 2005, the number of Brooklyn restaurants listed in the five-borough Zagat edition increased by more than 23 percent to 216 from 175. A decade ago, there were only 30 or so Brooklyn restaurants listed in the citywide directory, Zagat said.

“The restaurant industry in New York has continued to grow even at the worst of times,” he added. “There are some very fundamental demographics that are supporting what has truly been a revolutionary growth and diversification of American restaurants, particularly in New York restaurants.”

He pointed to nationwide economic factors that lead Americans to work longer hours and consequently be crunched for time to shop, cook and clean.

Plus, the era of high-end dining has waned with a broad range of brasseries, cafés, and restaurants of every ethnic cuisine gaining in popularity.

At Lucali, with its rustic wooden tables and original 1910 plaster walls, Brooklyn neighbors eat thin-crust pizza and calzones made with imported ingredients and toppings Iacono chose from a farmer’s market that morning.

“It has that nice neighborhood feel,” said the 41-year-old Iacono, a third-generation Carroll Gardens resident. Everybody knows each other, and tables await the regulars who come weekly, he said.

Though he had never before made pizza, Iacono spent two years quietly building the space after work and on weekends and never told anyone what he was up to. Once he opened his doors to the neighborhood, Iacono said he watched as his restaurant quickly filled to capacity.

“It was something I wanted to ease into,” he said. “It didn’t work out that way.”

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