Restaurants Feeding The Economy

Restaurants. We hear that word and start dreaming of places to go, meals to eat, and good times past. We relish the chance to sit and be served, the chance to open our own businesses, or the opportunity for an entry-level job that will help pay the bills and student loans.

In New York City, restaurants are the factories of today and tomorrow. No longer blessed with a surplus of industrial jobs, the city relies on tourism, entertainment and the hospitality sector to provide low-skill level jobs for hundreds of thousands of immigrants, students and graduates alike. Why then does our fair city make it so difficult to own and operate restaurants, which are so important to our economy and livelihoods?

One obstacle is over-regulation, complex bureaucracy and aggressive enforcement which combine to make operating a store tougher than ever. Every new aspiring shop owner must navigate the government maze of conflicting demands from the departments of buildings, consumer affairs and even the fire department before opening for business.

Fortunately for the thousands of hopeful entrepreneurs who stream in as countless others stream out of empty storefronts, the city started an inter-agency task force last year called NBAT – New Business Acceleration Team – to help business owners get through the mire. Finally.

Other obstacles for restaurant owners/developers range from small-time landlords and landmark laws to building violations and Certificate of Occupancy issues. Many owners expect to rent raw space in buildings with “issues,” while others would rather leave a space vacant than pay brokers. Believe me when I say that in these complex transactions, the quality broker is crucial to preserving harmony during the deal process by helping to keep the project on track. However, at the same time, many aspiring restaurateurs are naive, inexperienced and under-funded.

As for space, some neighborhoods have more tenants than vacancies. This is the case in the northern half of Brooklyn and in growing markets like Flatbush Avenue, Surf Avenue and Avenue P. Making matters even more difficult is the fact that restaurants compete with so-called ‘dry uses’, which don’t need extensive build-out time, multiple licenses and inspections, and are less risky to landlord and tenant alike. The hardest spaces to find in any neighborhood are pre-built ‘stores’, with kitchens somewhat ready to go.

If you want to save time and up to six figures of your restaurant costs, one good strategy is to lease what I call “dead” stores, which have basic kitchens. Another option is to take a space in low rent, pioneering areas like Atlantic Avenue east of downtown, Victorian Flatbush and Bedford-Stuyvesant.

Taken together, all these challenges make for a very difficult job and business creation ‘system’. And yet restaurants are crucial to our economy, provide some of the only new entry-level jobs on a mass scale, and customers love to patronize them! So I call on all the parties – landlords, tenants, patrons, the city government, neighbors – to work together more effectively in order to support our “factories of tomorrow.”

The good news is that hundreds of new, innovative and niche restaurants have opened in Brooklyn in the last few years, fueling what many food writers call one of the best, most creative and fastest growing food towns in the world. We love to read about them, eat their food and comment endlessly in online reviews on their qualities and faults. So, three cheers to the brave and hard-working restaurant developers among us!

A licensed broker with Creative Real Estate Group LLC, focusing on commercial and residential leasing and sales.

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