A few weeks ago, Wylie Dufresne announced that he had been forced to close his pioneering restaurant WD-50 on the Lower East Side as of 11/30. The reason is that the building will be razed and a new apartment building will go on the site; and said he hoped to reopen elsewhere soon. Then Rouge Tomate announced they will be leaving their spacious locale next to Barney’s as of August 9, citing rent. They will be relocating to an unspecified location “downtown” later this year.
Now, the monstrous Rentmageddon sweeping the NYC restaurants has claimed another scalp: Union Square Cafe. The iconic restaurant that opened 30 years ago on East 16th street and contributed to revitalizing the Union Square has fallen victim to rising rents and will close at the end of next year. USQ also hopes to move to a new location, though one has not been announced. Julia Moskin has a good, if sad, story on the trend in the NYT that is today’s must-read. She says that USQ paid $8/sf or $48,000/yr back when it opened; now the rent may be as high as $650,000 as international retailers, banks, and pharmacies have driven up rents. She also mentions that Marco Canora and partners at Hearth restaurant have been hit with a 65% increase in rent–this year.
Moskin asks Danny Meyer, whose other restaurants include Gramercy Tavern and The Modern as well as Shake Shack, why he doesn’t just pay for a renovation and the increased rent out of his own pocket? Because it doesn’t make financial sense, he says, making the analogy that it would be like doing a million-dollar renovation on a studio apartment.
In twisting the knife for fine dining, the landlord is quoted as saying that he thinks a Shake Shack would do well in the space.