Bryant Park Grill Exterior

We’ve come a long way in our view of the impact of restaurants in public space. When I began working in Bryant Park in 1991, most park and community advocates viewed restaurants as anathema. They were seen as commercial activity and therefore as forbidden from public space. We’ve now learned that some kinds of commercial activity are actually invaluable in animating public spaces – including restaurants, food kiosks, food trucks, craft markets and most recently, night markets. In fact, in many public space (and downtown) revitalization projects, food service is seen as something of a silver bullet.

Unfortunately, it isn’t. Restaurants are difficult and expensive to develop. Most restaurants are unsuccessful. In my experience, even the most successful restaurants in formerly under-invested places take years to be cashflow positive. Food kiosks are even more difficult to make work.

Bryant Park Grill Interior

The original financial model for the Bryant Park restoration was that rent from a restaurant would pay for the operation and programming of the park. It took over fifteen years from the time that the idea for a restaurant in Bryant Park was first broached to the day that the Bryant Park Grill opened its doors. Not only was a lengthy process required for approval of the design of the restaurant structure, but financing its construction seemed to be an unsolvable problem.

In the original plan, the restaurant developer was to finance the construction and fit-out of the structure. Years were spent trying to gain the state legislative approval required for the imposition of a mortgage on park property that would serve as security for a mortgage loan that would pay for the project. Besides the basic difficulty of getting any legislation through the Albany process, objections were raised both about the alienation of parkland for private use and to the idea of “private” space in the park. The Bryant Park Restoration Corporation (BPRC) serially selected two different experienced restaurant operators who were each unable to finance the construction of the building over a period of five years. Part of the problem was a lack of confidence in the viability of a restaurant that was in the middle of the park and did not have sidewalk frontage. In the 1980s, there was a New York Times story almost every fall about how the Bryant Park restaurant was going to open the following spring. But the project simply would not come together.

After the issuance of tax-exempt debt by Grand Central and 34^th Street partnerships to support their capital improvement programs – secured by the business improvement district assessment in the early 90’s – we proposed to banks that they make taxable loans to BPRC, secured by its BID assessment. BPRC, rather than the restaurateur, would make the major capital investment. This did the trick. BPRC borrowed $5 million from what is now JP Morgan Chase and the New York Public Library at a market interest rate for a ten-year term. These funds were used to build the core and shell of the Bryant Park Grill and its associated landscaping. The restaurant developer, in exchange for a long-term lease, with relatively low base rent and a percentage of the gross in addition, fitted out the kitchen and dining room and operated the facility.

The lease negotiation was long and contentious. The City was concerned about public access to certain tables around the building (which were never put in place), and the developer was insistent on an exclusive right to provide food service in the park, to which the City was, quite rightfully as it turned out, highly resistant. The first issue was worked out by a detailed compromise (which was never implemented), and the second by an 11^th hour concession by the City and BPRC. The exclusive catering deal turned out to be ongoing nightmare for us at BPRC when various event sponsors — particularly the fashion shows — wanted to use park facilities and their own caterers.

Pershing Square Cafe Exterior

The most important fact about all of this is that for about the first five years, the rent from the restaurateur to BPRC did not cover the interest and principal payments on its $5 million loan, so rather than supporting the operation of the park, the BID assessment was used to supplement the rent received from the restaurant to cover the debt service. This situation lasted for a number of years. Eventually, restaurant sales grew (the sale of alcohol at the adjacent Bryant Park Café was particularly lucrative) and BPRC began to receive rent substantially in excess of the amount of debt service and restaurant rent actually began to provide funds to support park programming and upkeep. But it took many, many years before this happened. The lesson for others here is that these projects take a long time – and many fail. We had a similar experience with the Pershing Square Café, where Grand Central Partnership financed the adaptive reuse of an abandoned former trolley barn into restaurant space, including the installation of an HVAC system, for about $2 million. The Pershing Square restaurant took at least five years to begin to be cashflow positive. Now, like the Bryant Park Grill, it is a huge success, both programmatically and financially. It has revived a formerly dark and deserted strip of street in a key location.

Pershing Square Cafe Interior

This is why I am wary about rosy projections concerning public space restaurant projects. Approvals take a long time. Financing is difficult. Restaurants take time to be successful and success is not certain. I also advise project sponsors that the more financial risk they impose on the developer, the smaller the number of developers who will have the capacity to bid on the project, the less likely the project is to be successful, and the longer it will be before the developer will be able to pay rent to support public space programming and maintenance. The more capital that the not-for-profit or government sponsor can put into the project, the more likely it will be to be a winner and the more money it will be able to throw off, sooner, to support the project. I know that sponsors often feel they don’t have the capacity to put capital into such developments – and most hope that the private restaurateur will cover all the capital costs. This impulse should be minimized or avoided if at all possible in order to increase the likelihood of success and the ultimate profitability of the restaurant. I would argue that not-for-profits or governmental entities, if they get creative, can often, as we did, find capital sources.

As difficult as restaurants are to make economically successful, my experience is that food kiosks are nearly impossible. The food kiosk tenants in Bryant Park have turned over many times. Producing food in a constrained space seems to be a challenge. Pricing the offerings properly and then getting the food over the counter quickly both seem to be challenging. Why are food trucks proliferating and stationary kiosks hard? Frankly, I don’t know. But kiosks are even less sure revenue generators than full service restaurants.

But the knee-jerk negative reaction to commercial activity as privatization in public space is simply misplaced. It is one of those abstract, hypothetical constructs that gets in way of doing placemaking. Commercial activity is one of the many things that must be balanced by thoughtful public space managers. Public spaces can certainly be overly commercialized – and I believe Bryant Park is currently over-programmed. However, that is not an argument for no commercial activity in public space. The years of wrangling between the City of New York and Bryant Park Restoration Corporation about the public’s access to the proposed restaurant, menu prices and the use and locations of certain specific tables were, in retrospect, unproductive. The restaurant’s success in drawing people to a formerly dangerous public space speaks for itself.

We have learned that the best way to get people into an abandoned space is food and drink; and they are an essential tool in public space manager’s arsenal for activation. The reality is that new restaurants may actually be net absorbers of financial resources – for at least a short period of time. But, a well-planned, well-financed, well-run restaurant can be both a public space activator and a major income generator for patient placemakers.