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The kitchen is closed

In a fragile economy, changing tastes can seal a restaurant’s fate

By Devra First
Globe Staff / September 23, 2009

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From Aujourd’hui to Z Square, a drove of local restaurants have closed their doors in the past year. The cause was quickly pronounced: the economy. Individuals have less money to spend, and corporations aren’t wining and dining like they used to.

But is it really that simple? Restaurants that cater to similar clientele, offer comparable food at comparable prices, or are situated just a street away - or even in the same building - can meet very different fates. When the economy is fragile, an imperfect location, outdated concept, or flawed financial plan can quickly mean the difference between in play and out of business. It may be more useful for restaurateurs to look at the recession as a catalyst, not a cause.

“The economy was the kiss of death,’’ says Michael Krupp, whose restaurant, Persephone, closed last month. But, he says, “our biggest challenge was the neighborhood.’’

Krupp and business partner Shaka Ramsay opened boutique-slash-restaurant the Achilles Project - which Persephone was part of - in Fort Point, long touted as an upcoming area in Boston. “Unfortunately, Fort Point never took off,’’ he says. “All this talk of it being the next big neighborhood never happened.’’

Persephone was on Summer Street, rather than a block over on Congress, where places such as Lucky’s, Drink, and Sportello are located. “Congress is significantly better from a walking traffic standpoint,’’ he says. “I believe [Drink and Sportello owner] Barbara Lynch is going to get through this rough time and when the economy turns around do bang-up business.’’

Too, Krupp and Ramsay’s business was out of the ordinary: a mash-up of retail and dining, featuring edgy, expensive fashions in the same space as dishes crafted from local, sustainable ingredients.

“Boston has always been a bit of a conservative city,’’ Krupp says, “especially when it comes to new concepts. We got a lot of positive feedback, but there were people who didn’t get it or didn’t want to give us a chance.’’

Kenneth Himmel - whose Himmel Hospitality Group operates restaurants including Grill 23, Harvest, and the forthcoming Post 390 and Bistro du Midi - agrees that Boston is conservative, at least financially. “People here are educated and have incredible taste. For whatever reason, they expect to go to Paris, London, New York and experiment with food and food service and creativity. But in their hometown, I’ve never seen people orient themselves to a willingness to spend premium money. The moment the average check gets past $100, it’s going to take something extraordinary to get people to come.’’

That affected Excelsior, a Himmel restaurant that closed in February. It lost corporate business because of the economy, but it was also simply expensive for Boston. “It was more stylized food, a more serious menu with a more serious composition of ingredients,’’ Himmel says. Tastes were changing, shifting away from fine dining, and not solely because of recent financial developments. “What’s transpired in the last five years is not a revolution but an evolution, to a form of dining where people are looking for a lot more comfort and value,’’ he says.

Similar factors were at work at Aujourd’hui and Icarus, which closed June 27 and July 3, respectively.

“Aujourd’hui was a very successful restaurant,’’ says chef William Kovel, who worked at the formal restaurant in the Four Seasons hotel. (Hotel representatives declined to participate in this story.) “When people think about closing restaurants, they think about the severity of the economic times, but we were still consistently busy.’’

Yet the Four Seasons is also home to the Bristol Lounge, a more casual establishment that remains open. “It’s a hotel company, not a restaurant company,’’ Kovel says. Four Seasons nationally and internationally are phasing out their second restaurants, he says. “It’s a brand initiative to move toward more casual dining.’’

Chefs’ tastes have shifted along with diners’. “I got less interested in fine dining than I was when I was younger,’’ says Chris Douglass, who operated Icarus in the South End for more than 30 years. “I found that as my cooking got better, my audience got smaller. They got to be less like me; they were people I related to less.’’

Four years ago, he opened Ashmont Grill in Dorchester - a fun, casual restaurant in his own neighborhood. Last year he followed it up with Tavolo, serving pizza and pasta at a reasonable price point.

Why is this shift occurring? “There’s a self-confidence about American cuisine that maybe when I was starting 30 years ago didn’t really exist,’’ Douglass says. “As American cooks then, we really looked to emulate a European model.’’

Also, people who eat in restaurants are now much more knowledgeable about food. “The idea of somebody being a foodie, 20 years ago I never really heard anybody say that. Now it’s cool. You can be 20 years old and be a foodie who’s into pork belly. That wasn’t around when I was starting to cook. Then the patron was well-to-do, traveled, read Gourmet. Now people are much more savvy and hip.’’

Of course, aiming at savvy young hipsters doesn’t guarantee success if a restaurant isn’t built on a solid foundation. “There’s a low barrier to entry in the restaurant business,’’ says restaurant development consultant Michael Staub of Group M Inc. “You need more dollars than sense. A poorly developed plan poorly executed is going to guarantee failure.’’

He cites Z Square, a project he consulted on, as an example. (Owner David Zebny could not be reached for comment.) “Conceptually, it was the right thing for the right place,’’ he says - a casual restaurant catering to students and workers in Harvard, Kenmore, and Post Office squares. But the financial plan did not add up: Rent was high, and there wasn’t enough capital behind the project. It likely wouldn’t have succeeded in any economy.

“A business needs to be well capitalized with real equity, not with debt,’’ Staub says. “If your rent is fixed and typically 8 to 10 percent of sales, and your sales drop off between anywhere from 5 to 20 percent, your rent becomes 15 to 20 to 25 percent of sales. If on top of that all the funding that went into the business is debt and needs to be paid back on a regular basis, it’s unsustainable. If you borrow too much and your rent is too high, you’re going to fail.’’

It’s a simple, undeniable equation, but knowing the math doesn’t make the task easy. Yet as the economy picks back up, so does the restaurant business. And entrepreneurs are once again starting to want in.

“We’re probably the busiest we’ve been in 18 months,’’ says Daniel Newcomb of real estate firm Atlantic Restaurant Group Inc. “We have a number of buyers looking for Boston. We need more inventory. There’s absolutely an abundance of buyers now, more with cash than I’ve ever seen.’’

The money comes from private investors rather than banks, he says, and the people wielding it are often experienced operators who see now as a good time to buy.

Himmel is partnering with London-based restaurant group MARC to open Bistro du Midi this fall. In the former Excelsior space, the Provencal bistro will be much less formal than its predecessor. He will also open Post 390 in the Back Bay in early October. Part of the Clarendon, a new luxury condo building, the casual restaurant will have more than 300 seats and a menu that focuses on modern versions of comfort food; press materials call it an “urban tavern.’’

Among the restaurants expected to open in the coming weeks and months are Trina’s Starlite Lounge, serving hot dogs, fried chicken, and other reasonably priced comfort fare in Inman Square; Coppa, an Italian wine bar with snacks, small plates, and pizza made from local ingredients; Regal Beagle, a self-titled “neighborhood joint’’ in Coolidge Corner serving upscale comfort food; and Woodward, in the new Ames hotel, which partner Seth Greenberg has described as a “modern tavern.’’

“There is no fine dining coming into the market now,’’ Newcomb says. “Everything is casual, everything is lounge, everything is medium range.’’

That seems to be what diners are most looking for these days. Restaurant closures are difficult, but they make room for the kind of food people want to eat right now.

“There are new restaurants, new chefs, new spaces becoming available,’’ says Kovel. “There’s a cycle of evolution in the city.’’

Devra First can be reached at dfirst@globe.com.