The newest Zagat Survey, released today, reported 160 New York restaurant openings in 2014, the highest number since the Great Recession began in 2007. But the bad news is that closings nearly doubled since last year, jumping from 42 to 82. It all begs the question: Why are so many restaurants failing while others are opening like gangbusters?
"The discrepancy between openings and closings is the largest since 2005," Tim Zagat, the co-founder of the namesake survey, said in a telephone interview last week. "There are a lot of rent-caused closings that are maybe driving up the number. And that will affect in the industry in the coming years."
He went on: "There's no question rents are going up in New York. If you have a restaurant that's been there for 10 years, you're going to see a shocking increase. That's happening all over the city." And because of that, "a certain amount of restaurants will go out of business." Zagat, of course, is referring to the 10-year leases that many culinary establishments sign at the beginning of their lifespans. When that term is up, landlords might be eager to jack up the rent to "market rates," which may or may not be sustainable to the restaurant.
Earlier this spring, Eater senior critic Robert Sietsema reported on the spate of restaurant vacancies plaguing Manhattan's West Village. "Could it be that the rents are too high for restaurateurs to make a decent profit?," he asked. Sietsema has even called for a historic preservation program to protect "living museums of gastronomy" from excessive rent hikes.
These issues garnered national attention in July when Danny Meyer, one of the city's larger independent restaurant operators, penned a New York Times op-ed about how he plans to close and relocate his flagship Union Square Cafe at the end of 2015 to avoid a massive rent hike. "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.
That narrative arc could just as well apply to WD-50, a pioneer in establishing the Lower East Side as a legitimate outpost for fine dining. That modernist abode was proof that New Yorkers would travel off-the-beaten for long, expensive, and delicious tasting menus. Alas, WD-50 will close in November as the developer plans to erect a new building on the site.
So will the city witness an even greater number of restaurants shuttering in 2015? Or was this just an outlier year for closings? Leave your thoughts in the comments!