On February 8th 2017, Pata Negra turns nine Years old.
Due to the ever changing Real Estate Market of New York City, specifically the East Village, I have been reflecting over the last near decade of restaurant landscape volatility.
If I were to throw a dart in the air, I would guess that over 100 businesses have come and gone since 2008, the year I opened Pata Negra. I assure you this is an under estimation. There are still over 50 closed storefronts with “for rent” signs and I am only referring to a ten block radius around 12th street and 1st avenue.
The question is why?
Here are some thoughts.
The obvious culprit is the escalating cost of rent. As ten year leases come to term, and the cost of operating a business has increased, small businesses cannot afford to renew, and are forced to close, even successful ones. One could argue that if a business must close, it is not successful. I disagree, but more on that later.
Real estate taxes is the silent but deadly revenue killer. Our former Mayor Bloomberg instituted two 25% annual increases to generate revenue for the city. The normal increase is roughly 2%. Most commercial leases require tenants to pay a portion if not all of these taxes. For example, I went from paying $12,000.00 per year in 2008, to $36,000.00 for 2016-2017. When you have a bad month in sales and the margin of profit is $3,000.00, and that just gets forked over to the city, do the math.
Who has the ability to pay these exorbitant taxes? You guessed it, corporate big business chains. That is Duane Reade, Rite-Aid, Walgreen’s, Banks, ATMs, Subway, Starbucks etc. There is a reason why on every block all you see are national chains or large restaurant groups who can withstand risk.
In the early 1980’s and 90’s, the East village was considered a dangerous area, ripe with homeless, drug addiction and grit, cohabiting with lifetime residents born and raised there. Artists, musicians and families made up the fabric of the East Village.
Many Residents clamored for a clean up of the streets and for viable businesses to come. This change in landscape brought an increase in property value, and actually forced many residents out. NYU is going the Columbia University route, buying up buildings and charging exorbitant rents to parents willing to pay $2,500.00 for a studio for their children while attending NYU. Management companies are snapping up buildings as well, inflating market value. As these prices continue to rise, long time residents are forced to leave, real estate property value continues to rise, and real estate taxes accordingly. The trickle down hits the small business owner.
This is significant because building a loyal returning customer base starts from within the neighborhood. When the neighborhood changes because residents leave, it is like starting all over. My customers from 2008-2014 are long gone, and even the new loyal ones who have moved in are already gone or are planning their exit.
This is the era of the millennial, and I am not going to proffer a position of neutrality. There are many facets of the millennial psyche I don’t understand, and it starts with the social media attention span. The NYC dining climate has become a combination of YELP, Eater, Grubstreet, Thrillist, Gothamist, Zagat (and NYTimes of course) recommendations. And whichever intel is shiniest and most current (as in 5 seconds ago), is where millenials eat out. What the millennial diner is looking for is elusive to me. Keeping up with twitter, instagram, facebook, Foursquare, and Snapchat is all consuming and proven to be futile.
In this town there is very little loyalty. It is all about what is hot and what is next hot. Too much competition and too many choices. I do believe millennials are all about value, but that is difficult to offer when operating costs are at an apogee in Manhattan. Just ask world class chefs like Wiley Dufresne, Bill Telepan and Anita Lo (to name 3 recent), chefs who have real pedigree, and continual press. Not every restaurant can be a David Chang Clone, nor should they be.
Operating a small business is like making a pie. Everyone gets to eat a slice before you do, and if you know how to operate you can keep a slice or two for yourself. If not, you don’t eat, regardless of how much effort you put into making the pie. Heck, you might even owe a couple of slices from the pie you haven’t even begun to make yet.
Survival is the new success. I came from teaching special education in the south Bronx and East Harlem to middle schoolers for 13 years to ten plus years in the restaurant industry. I have seen several businesses come and go in that span. This year I have been busy making pie, but having no slices.
I signed my lease in July of 2007. Due to permits and licenses the earliest I was allowed to open was February 2008, and so I have just a few months left on my current lease. The building has been bought and sold twice since my tenure, both times by investors from some faraway state managed by companies who have hundreds of properties in their stable to run. A rent increase is untenable. I would have to open up a casino in the basement to keep pace.
I measure my time at Pata Negra by all the relationships I have made in my travels, and the 90% of those customers who have walked through that door, some of whom have even become great friends. I even thank the 10% who I was at odds with, because they just didn’t get my business or get me or perhaps I was having a bad day and they got an earful of me. Yes I am even grateful for them. I learned something about people and myself. I thank every one of my staff who worked hard and gave of themselves, without whom Pata Negra would be without its full charm and character. My mission, to bring a little bit of Spanish culture to New York City via some jamon, cheese, and wine, was an outlandish idea back in 2008, when I was still smuggling in jamon in my suitcase. It was crazy and not profitable to open at the height of the recession. It was foolish to open a non-market driven business, not catered to the NYU clientele, like Smac or Motorino, and now the millenial populist Duck’s Eatery. My hats off to their continued success. I would have probably been better off selling fried chicken, or oysters or both (good idea). But I am satisfied with what I created. Customer by customer, each person was exposed to jamon, wine, sherry, and a taste of Spain. Not croquetas and patatas bravas and paella, rather Barcelona style recipes with personal, informative service and appreciation. I am grateful for my time here and proud of the little jamon bar that could.
It would be nice to stick around until July, but given the current climate (January was the worst month of business since 2008), I will see how it goes month by month. 2016 was a topsy turvy year for me. So many personal challenges turned into triumphs and celebration, but Pata Negra lost steam. Blame it on the uncertainty of the times or blame me for not keeping up with times. Certainly the reasons I mentioned had something to do with it too.
To commemorate the ninth year I have instituted rollback prices to 2008. I will be at the helm most of the time, with my familiar apron on. Come on down to raise a glass with me in celebration of a wonderful life, a little jamon, vino, a farewell hug and a smile.
Off the top of my head here is a partial list of spots I used to frequent (primarily restos) which have closed in the East Village since 2008. Just add to the list.
Rose’s Pizza 10th Street Pierogi
South Brooklyn Pizza Northern Spy
Roberta’s Pasticceria Leon
Terroir Pearl & Ash
Box Kite Ninth Ward
12th St. Osteria Tinto Fino
Cafecito Nonna’s Pizza
Back Forty Dieci