Economic forces continue to pummel the restaurant industry, with more than three dozen closings in the region this year. Yet, surprisingly, at least as many eager opportunists have stepped in, checkbooks in hand, to open new ones.
"Restaurateurs are, almost to a fault, optimists," said Michael O'Halloran, who two weeks ago opened Kong, a Chinese bar-restaurant in Northern Liberties with a low-priced, small-plate menu.
But there is a difference: Unlike the barn-size, $10 million-plus projects like the plush steak houses that were the norm as recently as a year ago, restaurants now on the books tend to have fewer seats, lower prices, and less lofty ambitions. More often than in headier times, they eschew the BYOB model, opting for liquor licenses to pump profits. And they are relying on private financing rather than harder-to-come-by bank loans.
This regional boom in openings seems counterintuitive, as customer traffic nationally has declined for 22 consecutive months, according to the National Restaurant Association.
Locally, dozens of restaurants are due to open by the end of the year, making it the busiest fall in memory after a spate of closings this year furrowed eyebrows at the Center City District.
O'Halloran, whose first restaurant, Bistro 7 in Old City, is a BYOB, said the economy worked in his favor with Kong.
"The rents are a little bit softer," he said. With crews eager for construction work, "getting stuff built is easier and a little bit cheaper. There's a million people looking for work, so you don't have to worry about staffing issues."
Also, "everybody realizes this is not a permanent situation. If you have a concept in a neighborhood you are confident with, regardless of the economic conditions, you will find a way to do it."
Manayunk, whose restaurant scene for years was moribund, this fall will get casual restaurants from two chefs with white-tablecloth experience - Matt Levin (a barbecue joint called Rubb) and Joseph Scarpone (a paninoteca/wine bar called agiato) - after finding a local landlord to back them.
This trend toward leaner restaurants and less expensive tabs likely will shape dining for years.
"Diners are more educated now, and they know they can get better food without that fuss," said Steve Gonzalez, a chef who with backers is constructing Zavino, a pizzeria-wine bar at 13th and Sansom Streets, a hot area. "We don't want to go to the same places our parents went to."
Michael Schulson, a chef who with financial partners is opening Sampan, an Asian bar-restaurant down the block from Zavino, opted for a stylish room with a modest 95 seats.
"I don't think people are looking to spend $2 million, $3 million nowadays" on developing a restaurant, he said, adding that the budget is $250 a square foot for the build-out, or $825,000. Not cheap, but consider that $300 to $350 per square foot had been the norm in Center City.
"Everyone is going smaller, more efficient, lots of good value," said Barry Goldstein, a lawyer who handles restaurant deals and has 45 applications pending with the Pennsylvania Liquor Control Board.
Even Center City's big guns are on board.
Jose Garces is balancing his Latin portfolio of Amada, Tinto, Distrito, and Chifa with a 30-seat corner bar near Rittenhouse Square called Village Whiskey (opening Thursday) and a similarly small cafe in Washington Square West, opening this winter, called Garces Trading Company. Next month, he will introduce the Cantina on the first floor of Distrito, featuring an all-under-$10 menu. Marc Vetri is adding a casual, 60-seat spot, Amís, in Washington Square West to his cozy Vetri nearby and his newer, larger Osteria in North Philadelphia.
Stephen Starr, who has spent millions building such palaces as Butcher & Singer, Parc, and Continental Mid-town, is planning a pizzeria in Society Hill and contemplating a line of upscale food trucks to traverse the city. This follows last month's opening of SquareBurger, a burger-and-shake hut in Franklin Square Park.
An Inquirer analysis of openings and closings this year has found two common elements:
"Large and expensive" is a challenge. Witness the demise of Maia, Rae, Brasserie Perrier, Oceanaire Seafood Room, Old Original Bookbinder's, Susanna Foo, and Frederick's. Few large, posh restaurants are on the books; even R2L, Daniel Stern's glitzy project destined for Two Liberty Place's 37th floor, is 120 seats. Square 1682, the restaurant at the soon-to-open Hotel Palomar in Center City, is to have 90 seats.
Low prices are at the fore of business models, with many restaurateurs designing menus whose entrees don't approach $20 - at least $5 less than the norm only a few years ago.
Kim and Edgar Alvarez, taking over the Cresheim Cottage Cafe on Germantown Avenue in Mount Airy, will price everything on Avenida's Latin pub menu there under $20.
Starr said it would take some time before the industry recovered. "No one can spend millions, and it might not make sense ever again," he said.
In addition to Starr's Society Hill pizzeria, tentatively named Stella Pizza, he said he hoped to spread that concept to Rittenhouse Square and Chestnut Hill. He also plans to reopen his Blue Angel bistro at Seventh and Chestnut Streets in the spring - "assuming there's a recovery."
The high restaurant churn is a national phenomenon, said Hudson Riehle, senior vice president of research for the National Restaurant Association. Though customer counts are off, he said, the number of restaurants has decreased by only a fraction of a percent - about 4,000 fewer restaurants among nearly one million locations.
Restaurants' lives tend to be short and tenuous no matter how strong the economy. Even modest ones close or change concept, such as the Du Jour market in the Symphony House at Broad and Pine Streets, which will shut down shortly as owners turn it into a similarly low-priced Asian concept called Chew Man Chu.
Philadelphia Fish & Co. stuck around in Old City for an impressive 25 years. Owner Kevin Meeker saw the change and converted in the spring into a much cheaper barbecue restaurant, called Q, that emphasizes the bar.
Even Le Bec-Fin has introduced a $15 express lunch and discounts at dinner.
Populist concepts, such as pubs, have become the norm, while more ambitious places - such as Ansill, an eclectic restaurant in Queen Village known for exotic meats and offal - closed. Up the block, Gayle, a small but also high-aiming restaurant from Stern, will close Friday.
BYOBs seem to be affected most by this churn. Last weekend, Daniel Nejberger closed Carambola, his BYOB in Dresher, after 12 years.
The beginning of the end, Nejberger said, was the spike in gas prices a year ago, which led to higher commodity prices. When the recession forced layoffs at the office park near his business, his lunch trade sank 40 percent. With shrinking margins and without alcohol sales to buttress his bottom line, he shut the door.
Asked if he would give the restaurant business another go, Nejberger without hesitation said: "Of course."