New York’s Vanishing Diners

[M II A II R II K]

New York’s Vanishing Diners


May 24, 2019

By Stefanos Chen

Read More: https://www.nytimes.com/2019/05/24/r...ng-diners.html

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While their disappearance has been lamented for years, diners along the margins of Manhattan and in parts of other boroughs previously thought impervious to redevelopment are closing because of increasing rents and enticing offers that are hard to pass up.

- Still, the diner’s imprint on New York culture can be felt among the holdouts, the mourners of the recently shuttered and the restaurant owners who find life after the death of their diners. Since 2014, 15 diners, many in stand-alone buildings, have been sold in New York, according to an analysis by Ariel Property Advisors, a commercial real estate brokerage. — There were six sales in Queens, six in Brooklyn, two in the Bronx and one in Staten Island. There were no sales in Manhattan. But that does not account for the diners whose owners lost their leases.

- Riley Arthur, a photographer who has visited nearly every diner in the five boroughs, estimated that there are 419 left in New York City. In the three years since Ms. Arthur began photographing them for her Instagram page, 39 have closed an average of 13 a year. — In many cases, they didn’t close because of dwindling customers. “It’s just the other factors” like rising rents and shrinking profit margins that “are insurmountable,” she said. “You just can’t make up that difference selling eggs.”

- Others are operating on borrowed time. The Neptune Diner in Astoria, Queens, which sits on a 100-by-90-foot lot, was sold in October for $10.35 million. While the diner, with its Mediterranean tile roof and neon sign, occupies a fraction of the lot, a developer could build more than 44,000 square feet on the property, thanks to unused development rights, enough for a six-story apartment building with commercial space on the ground, said Michael A. Tortorici, an executive vice president at Ariel Property Advisors.

- Nick Tsoromokos, a partner at the law firm Tsoromokos & Papadopoulos, who represented the buyers, said the diner’s lease will expire at the end of August, but might be extended on a monthly basis. A manager at the diner said they expect to stay in business for four more years, but Mr. Tsoromokos said that was unlikely. — “The diner is a 747,” said Paul Fetscher, an agent with Coldwell Banker Commercial NRT, who specializes in restaurant sales. “It needs tremendous velocity to continue to make money,” he added, noting that many are open 24 hours a day.

- He attributed part of the pressure to rising taxes and to the $15 minimum wage law in New York that cuts into owners’ margins. And as many owners are nearing retirement age, he expects the pace of sales to accelerate. — Some are trying to adapt. Bill Tsibidis, 42, an owner of the Crosstown Diner in the Throgs Neck section of the Bronx, is often at odds with his father, Peter, who bought the prefab diner on Bruckner Boulevard in 1982. “We were fighting tooth and nail — and he is still stuck in his ways,” Mr. Tsibidis said.

- His father, who is from Sparta, Greece, was opposed to taking delivery orders, because he thought it would tarnish the restaurant’s reputation. Now deliveries make up about 40 percent of their business. Recently, Mr. Tsibidis has added other kinds of food to the diner’s Greek-American fare, including pernil, a Puerto Rican roast pork dish, and he is in talks to bring in a sushi chef. He also runs Facebook, Twitter and Instagram accounts to promote the diner. — “You either change or you’re dead,” Mr. Tsibidis said, noting that one of their competitors, the Pelham Bay Diner, sold in January after 37 years in business.

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[tdawg]

There really is nothing like a New York diner. The Neptune in Astoria isn't that far from me. It would be shame to see it disappear but the area around it (directly underneath the Astoria Blvd N/W subway station) is rapidly gentrifying and growing taller.

[the urban politician]

Mmmmm a hot roast beef sounds good right about now.

I definitely partook in the "NY diner" experience from time to time when I lived there

[Hudson11]

restaurants and diners are going to be hit hard by the minimum wage increase. 15$ an hour is an insane expense on top of the rent prices. Even in the suburbs the minimum wage will graduate to 15/hour sometime in the next decade. I think tipped labor has different rules, but the wages will have to go up either way to compete.

[bnk]

Originally Posted by M II A II R II K

[

That pastry display area looks a place that I went to a hundred times around Park Ridge, Niles actually.


https://www.omeganiles.com/

We are open 24 hours a day, 7 days a week, 365 days a year. Visit us online at www.omeganiles.com and in person at 9100 W. Gold Rd., Niles, IL 60714. See for yourself why we’ve been voted as one of the best diners in Illinois!


Omega Restaurant and Bakery. check out the link for photos and videos....They have a real good bakery too... https://www.youtube.com/watch?time_c...&v=5kQdPXCEx8g

Try it out for breakfast sometime, and take some pastries from the display to go.

[Crawford]

IMO the classic outer borough diners are vanishing for four main reasons-

1. Food, speaking generally, sucks and is old-fashioned and unhealthy Sysco crap not in tune with current dining preferences. Yeah, there are exceptions.

2. Demographic that frequents diners tends to be older white ethnics (now mostly passed away or in Sunbelt). Newcomers, whether immigrants or young professionals go elsewhere.

3. Diners tend to be lowrise, one floor affairs, sometimes with parking, on major arterials with generous zoning, so make natural high density development sites.

4. Diners tend to be owned, not leased, and younger generation doesn't want the work, so they cash out.

[Chef]

Originally Posted by Hudson11

restaurants and diners are going to be hit hard by the minimum wage increase. 15$ an hour is an insane expense on top of the rent prices. Even in the suburbs the minimum wage will graduate to 15/hour sometime in the next decade. I think tipped labor has different rules, but the wages will have to go up either way to compete.

I've run restaurants for 20 years, I wouldn't say that a $15/hour minimum is insane. In Minneapolis our labor market is tight enough that cooks are already making over $15 and most dishwashers are making around $12/hour. Kitchen labor is about 10% of a restaurant's overhead which means that raising wages by 25% can be covered by raising revenues by 2.5%. Customers will barely even notice. In 1998 I was making $13.50/hour as a line cook which was high, but most restaurants were paying their best cooks that wage. If you plug that into the BLS inflation calculator that comes to $21.35/hour in today's money which is more than any line cook makes now. Kitchen wages fell sharply in real terms from the 2001 recession to about 2014, all the higher minimum wage will do is bring them back to where they used to be. Restaurants can handle it.

[Innsertnamehere]

Ontario raised it's minimum wage to $15 (CAD mind you so a little less in terms of buying power than in the US, but not crazy different) last year and there hasn't been any job losses or any real significant impact to the restaurant business. I'd say that fast food places have a renewed pace of attempting to minimize labour costs (increased push of mobile ordering, self serve machines) and restaurant prices went up maybe 10% to accommodate it, but nothing crazy.

[chris08876]

New Jersey is still going strong in the Diner game. We still are the Diner capital of the world.

A Diner is a unique place. Its where you go on a Sunday afternoon to have breakfast at 1 pm after a night of lude debauchery and drunken stupor.

Its where you go to talk business, such as how many points to add to the meat man for not paying his weekly dues.

Its where you go to get in touch with your inner Greek.

This Diner is a few minutes from my house.


Credit: https://www.breakfastwithnick.com/20...ridgewater-nj/

[Gantz]

Originally Posted by Chef

I've run restaurants for 20 years, I wouldn't say that a $15/hour minimum is insane. In Minneapolis our labor market is tight enough that cooks are already making over $15 and most dishwashers are making around $12/hour. Kitchen labor is about 10% of a restaurant's overhead which means that raising wages by 25% can be covered by raising revenues by 2.5%. Customers will barely even notice. In 1998 I was making $13.50/hour as a line cook which was high, but most restaurants were paying their best cooks that wage. If you plug that into the BLS inflation calculator that comes to $21.35/hour in today's money which is more than any line cook makes now. Kitchen wages fell sharply in real terms from the 2001 recession to about 2014, all the higher minimum wage will do is bring them back to where they used to be. Restaurants can handle it.

Its not the kitchen staff that effects the costs, those already made $15-20 an hour in NYC even before min wage hike. Its the front desk labor, wait/cleaning staff, and especially the delivery guys and the local places you source your produce from that now have to pay their ppl $15 an hour. Those jobs were $10 an hour jobs. Plus you have to give everyone 2 weeks of paid vacation plus mandatory 8 weeks of paid family leave, plus if you're a big place, health insurance, on top of $15 an hour.

[Crawford]

Originally Posted by Gantz

Its not the kitchen staff that effects the costs, those already made $15-20 an hour in NYC even before min wage hike. Its the front desk labor, wait/cleaning staff, and especially the delivery guys and the local places you source your produce from that now have to pay their ppl $15 an hour.

That makes no sense. The number of restaurants in NYC has never been higher, but the number of diners is plummeting. That clearly indicates that the problem is unique to diners.

Minimum wage rules are borne by all restaurants, and the industry, overall, is booming.

[Gantz]

Originally Posted by Crawford

That makes no sense. The number of restaurants in NYC has never been higher, but the number of diners is plummeting. That clearly indicates that the problem is unique to diners.

Minimum wage rules are borne by all restaurants, and the industry, overall, is booming.

1. Diners operate on a lower margin, because they sell lower margin food. They have huge menus. Sushi or hipster gourmet food is higher margin.
2. Diners are bigger than most other restaurants in the city, with higher staff numbers that trigger all those other mandatory thresholds. Most other restaurants are smaller and qualify for exclusions from all the new labor laws since they do not hit the employee count needed. They also sit on bigger lots and the property taxes for commercial went up by ~60% since DeBlasio took office.
That is why all these new bubbletea/poke/gourmet bakey/cookie places are doing so well. They don't even have proper tables, so their exposure to property taxes/rents is much lower and their staff count is kept as low as possible. Usually only 2-4 people are employed.
This is not just the restaurant industry either. Look at Vox. Vox Media in NYC literally converted every single writer to a "contractor" position.

[Chef]

Diners do not operate on lower margins. Generally the cheapest tier of restaurants have the highest margins. As you go farther upscale the margins get thinner because overhead goes higher. A successful diner, bar and grill or neighborhood restaurant will average a 6% to 9% profit margin. A high end restaurant is closer to 2% to 3% because the food costs are higher, as are things like linen and service (servers generally have smaller sections). Sushi restaurants are very low margin operations because fish is the most expensive meat to buy wholesale, on average.

[Gantz]

Originally Posted by Chef

Diners do not operate on lower margins. Generally the cheapest tier of restaurants have the highest margins. As you go farther upscale the margins get thinner because overhead goes higher. A successful diner, bar and grill or neighborhood restaurant will average a 6% to 9% profit margin. A high end restaurant is closer to 2% to 3% because the food costs are higher, as are things like linen and service (servers generally have smaller sections). Sushi restaurants are very low margin operations because fish is the most expensive meat to buy wholesale, on average.

Linen and quality of food is cheaper compared to the markup.
A higher end sushi place charges $125 per person for ~$20-40 worth of fish.
Those hipster charcutterie places in Brooklyn charge $60 per person for $13 worth of meat, if you buy the same cold cuts at the specialty shop. They charge $7 for a glass of apple juice. And this is not fine dining.... they don't even have linen.
I am not talking about the really high end stuff where they charge $1,000 for an ice cream sundae either. Those are just outliers for the ultra-rich and politicians.

[Chef]

Originally Posted by Gantz

Linen and quality of food is cheaper compared to the markup.
A higher end sushi place charges $125 per person for ~$20-40 worth of fish.
Those hipster charcutterie places in Brooklyn charge $60 per person for $13 worth of meat, if you buy the same cold cuts at the specialty shop. They charge $7 for a glass of apple juice. And this is not fine dining.... they don't even have linen.
I am not talking about the really high end stuff where they charge $1,000 for an ice cream sundae either. Those are just outliers for the ultra-rich and politicians.

I don't think you have ever managed a restaurant or looked at many of their profit and loss statements. You are talking about restaurant economics like a customer. I could break it down for you point by point but to be honest I don't have the energy to do a detailed dissertation on restaurant economics, because I spend 60 hours a week making restaurants profitable as it is, and the internet is supposed to be my recreation, not an adjunct to my job. But I guarantee you that a neighborhood restaurant can still operate profitably with a $15 an hour minimum wage. We passed a $15 an hour minimum wage here in Minneapolis, and Minnesota is one of the few states with no tip credit for tipped employees. My job is to make it work, and I have crunched enough numbers to think it is doable. This isn't an abstract discussion to me. There will be restaurants that go out of business, and the owners will blame minimum wage hikes, but in reality restaurants are always going out of business, and owners always blame external factors when the reality is that most of them are just bad at running restaurants.

[Chef]

As far as why diners are disappearing it is pretty simple. They don't sell the food that Americans want to eat. In general Americans tend to have a low opinion of traditional American foods, even if it is well made. People want ethnic genre foods or pizza. The American food that is popular now tends to be lighter and healthier and more focused on creativity - salads, wraps, things like that. The one niche that diners have left is breakfast, those that do it well will probably be around indefinitely.

[Chef]

After giving it a bit of thought there is a second, more complicated reason why diners are dying out. Since the beginning of the 21st century what we have seen in dining is a boom in the upscale segment, and also a boom in fast food. The middle is hollowing out. This trend has accelerated since the recession. It is likely a reflection of the different economic arcs of the various social classes in America. A prosperous professional class prefers upscale bistros, sushi and light, healthy foods. Upper middle class people generally don't want the fatty, sugary or carb heavy comfort foods that diners sell, although they may go once a year for the kitsch factor. As the lower middle class has seen its prospects diminish, the places that catered to them have had a tough market. That includes diners, neighborhood bar and grills, and inexpensive sit down restaurants. The downward mobility of the lower middle class means that they are eating more like the poor and have migrated to fast food which has fueled its growth.

[ChiMIchael]

Originally Posted by Chef

As far as why diners are disappearing it is pretty simple. They don't sell the food that Americans want to eat. In general Americans tend to have a low opinion of traditional American foods, even if it is well made. People want ethnic genre foods or pizza. The American food that is popular now tends to be lighter and healthier and more focused on creativity - salads, wraps, things like that. The one niche that diners have left is breakfast, those that do it well will probably be around indefinitely.

You probably make a point here. I'm in Edgewater and what it mostly has are ethnic restaurants. There are very few decent burger, bbq, fish joints that are nearby, at best you got to use a delivery app. Your best bet for decent prices are probably some of the bad neighborhoods.

[sopas ej]

Originally Posted by Gantz

Its not the kitchen staff that effects the costs, those already made $15-20 an hour in NYC even before min wage hike. Its the front desk labor, wait/cleaning staff, and especially the delivery guys and the local places you source your produce from that now have to pay their ppl $15 an hour. Those jobs were $10 an hour jobs. Plus you have to give everyone 2 weeks of paid vacation plus mandatory 8 weeks of paid family leave, plus if you're a big place, health insurance, on top of $15 an hour.

I don't know how it works in New York, but isn't PFL covered by the state? It's not something the employer has to pay, right? In California, PFL is paid by the state.

In California, we've had PFL since at least 2002 or 2004, and it's something you apply for through the California EDD. I believe we only get 6 weeks of PFL, though, so New York is generous in that respect.

[Crawford]

The paid family leave is only for birth of a child, or if you're an emergency caregiver of family member with serious illness.

So, yes, it's generous (most generous in U.S.) but it will be only be relevant for like 2% of employees on annual basis. And you only get like half your wage. I seriously doubt diners are closing because the servers are all getting pregnant and taking time off.