Updating Richard's Rules for Restaurant-Driven Revitalization

From time to time I write about restaurants as being an essential element of urban revitalization.

-- Richard's Rules for Restaurant-Driven Revitalization (updated), is the basic piece, with five rules (below) and a list of elements denoting quality restaurants
-- Revisiting Richard's Rules for Restaurant-Based Revitalization, discusses a couple restaurants which repositioned away from upscale to more "comfort" food, to better meet the desires of neighborhood consumers

The original rules are:

1. Relatively appealing cuisine that isn't too specialized; food that is attractive to a large number of people--Italian, Mexican, and "American," seem to work best. You want at least 100 customers/nite. These days Thai food is moving into this category. Chinese seems to have lost its appeal. Restaurants like Indian, Caribbean, etc. are just a bit too specialized, and therefore don't get the weekly or at least a couple times/month patronage that such restaurants need especially when they are located in emerging commercial districts.

Think Banana Cafe, La Loma, La Lomita--restaurants where regular patrons come once or twice each week vs. Capitol Hill Tandoor or Phish Tea--the latter two have a cuisine specialized enough that local patrons come maybe once every couple months, so they need to draw on a much larger trade area than restaurants that have a more "approachable" cuisine.

2. Good food; it doesn't have to be stunning but it better be good. (Perhaps Mexican restaurants illustrate this point the best.)

3. Good, good plus, or better service; waiting isn't fun, and neither is dealing with a server that doesn't help you get what you want with a modicum (ideally none) of problems.

4. Competitively priced; you can't have drinks at $8 or most of your entrees costing $13-$20. If your prices aren't competitive and maybe a little less expensive than the market, you won't get that frequent patronage that is necessary for your success. Pitchers of margaritas or sangria are good, maybe not pitchers of beer, which seem to attract a rowdier more alcohol-centered clientele.

5. Nice interior; it doesn't have to be stunning or a $300,000 interior renovation, but it can't be threadbare, and it has to be appealing.

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People buy shirts infrequently but they eat every day

The general importance of restaurants to neighborhood commercial districts has to do with the fact that while people don't buy goods and services of various sorts at retail shops every day (e.g., how often do you buy a shirt, a piece of furniture, a tree, a washing machine, a painting, pants, a dress, a gift, etc.), people do eat every day.

For one, to get people to re-sample a commercial district, restaurants are a good way to do it, since unless your district has a supermarket, drug store, or hardware store (the kind of convenience retail that generates weekly shopping trips), people aren't likely visiting the commercial district on a weekly basis--especially if the place looks gnarly.

Second, restaurants are essential to extending a patron's stay while they're there, by meeting their need to be able to eat and refresh (i.e., use the restroom maybe).

The rise of e-commerce hurts local retail development a lot

E-commerce now accounts for between 10-15% of retail purchases.  That means less business for "bricks and mortar" stores.  For any business, the loss of that much business can be catastrophic.

As a result of this marginal decline over the past few years--aided by the recent recession--many national retail chains have gone out of business (Borders books, Linens' and Things, Best Buy) in response.  Think of how hard it must be for retail and restaurant businesses that are small and independent.

People eat many meals "out-of-home"

The key reason for restaurants' importance has to do with frequency of purchase.  As well as depending on the nature of your household--if you are single, or don't have children, work a lot, and have a high disposable income--you're likely to eat out more at restaurants (or from food trucks).  Although note that if your household characteristics don't support eating out frequently, that likely depresses business for your local commercial district as well.

From "Eating at restaurants boosts risk of obesity, experts warn" in the Orlando Sentinel:

More than half of adults eat out three or more times a week, and 12 percent eat out more than seven times a week.

(Note this impacts supermarkets quite a bit as well.  So does the fact that a lot of people can't cook.  See this interview with Michael Pollan about his new book, on cooking, "Michael Pollan all heated up over getting in the kitchen" from the Minneapolis Star-Tribune.  But that's for another blog entry.)

Retail in general is shifting towards food (and drink)

In the blog we have remarked that in response to these trends, the nature of neighborhood and regional commercial districts and retail more generally is shifting away from general retail and towards food.

 This means that fewer retail stores exist in sub-regional commercial districts, that more retailers and national retailers (like Target or Walmart--Walmart generates 60% of its revenue from food sales) are adding food to their array of products on sale, and more commercial districts are shifting more to "eatertainment" or "drinkertainment" districts and away from being traditional retail centers.

It's time to update Richard's Rules

The original Richard's Rules post was based on the then reality that there wasn't enough business in neighborhoods to support "great chefs," so what kind of restaurant business could make it?

Now DC's population is growing and is continuing to grow (see "Census: Big cities exceed pace of growth over suburbs for second year as outlying areas fizzle" from the AP and "D.C. shows Sun Belt-like population growth" from the Post), neighborhoods and their commercial districts have more options for improvement.

Not only does this mean that restaurants can be supported at the neighborhood commercial district level, when for the longest time this was a struggle, it means that more creative and innovative restaurants are supportable, as well as a greater number.

A recent article from the District Cuisine blog about the decline of the Tru Orleans restaurant on H Street NE ("Tru Orleans: What Happened?") is another reminder that these writings need an update.

1.  Walkable neighborhoods adding population are key to DC's restaurant resurgence.  Most of DC's neighborhood commercial districts don't have parking lots and structures, so to go there, you are likely to be walking or using transit, taking a cab, or maybe carshare.

This means that what we might call "driving neighborhoods," such as Upper Northwest neighborhoods along Georgia Avenue, 14th Street and 16th Street, have a hard time attracting new restaurants.  Brightwood Bistro, the subject of past blog entries, failed 18 months ago.  If you have to drive to a restaurant to get there, and there isn't much else around there to attract you, you're more likely to go somewhere else.  See "The "soft side" of commercial district competition" and "It's the Reilly Law of Retail Gravitation (stupid)."

In my neighborhood there is a micro-commercial district (one block) a couple blocks away and there is a decent Caribbean restaurant there, Peaches Kitchen.  But because virtually everyone in the neighborhood drives (we are the only household on our block without a car), people don't even know the restaurant exists.

While it doesn't help that they don't do door-to-door marketing, when people drive they don't see their retail options in the same way they do in a neighborhood like Capitol Hill or increasingly in Bloomingdale, on 11th Street in Columbia Heights, etc.

There are some exceptions like the cluster of restaurants around Crittenden Street NW just past Petworth on Georgia Avenue and the area by Politics and Prose on Connecticut Avenue NW, and on MacArthur Boulevard in the Palisades.  But for the most part, the energy in restaurant development in DC is in the walkable neighborhoods.

2.  Critical mass matters and supports a broader range of food options than was possible before.

One of the reasons that neighborhood commercial districts had declined in the 1980s and 1990s and into the last decade was that neighborhoods tended to skew older in terms of residential demograpics.  As you age, you tend to eat out less, especially if you have children.  So neighborhoods that attracted some younger residents tended to have a better restaurant culture (like Dupont Circle).  But most languished.

There were some exceptions.

For the longest time, Cafe Deluxe and Cactus Cantina (Cathedral Heights), Rocklands Barbecue (Glover Park), Lauriol Plaza (Dupont Circle/18th Street NW), and Grillfish (Dupont Circle/West End) were the pinnacle of neighborhood restaurants.  (Lauriol Plaza is incredibly popular but the food isn't that great.)  And great examples that money was and is to be made in the neighborhoods, not just in Downtown or Georgetown.

Right: Ted's Bulletin, 8th Street SE, Barracks Row, Capitol Hill, DC.

But now, more neighborhoods are reaching a critical mass in terms of the in-migration of younger residents with higher disposable income, more patrons are seeking more creative experiences in their "neighborhood" restaurants.

And they are less afraid to go to places like H Street NE or 14th Street NW or U Street NW or 8th Street SE--places that 8 years ago people would call "sketchy."

3.  Downtown and Georgetown are no longer the high point in area cuisine--neighborhoods are now supporting restaurant creativity.  Neighborhoods are now the place to eat better food, you don't have to go Downtown (except for steak houses).

Creativity is moving to the "neighborhoods," places like 14th Street NW in particular (Birch and Barley, Black Pearl, St. Ex, Policy, etc.) pushed by local restaurant chainlets like the Matchbox Group (restaurants now on 14th Street NW and 8th Street SE), Neighborhood Restaurant Group--traditionally focused on Northern Virginia but growing in DC, Jeff Black--had been focused on Montgomery County Maryland but now opening more locations in DC, and in DC neighborhoods, not downtown, etc.

Busboys and Poets too--mostly in denser locations like U Street and Mount Vernon Triangle--has announced plans to open a location in Takoma DC, almost on the border with Maryland, in a multiunit apartment building currently under construction.  And the Black Restaurant Group is opening a restaurant two blocks away, in the Old Town district in Maryland--a long block from the DC border.

4.  Regionally-serving districts that are neighborhood-based, like H Street NE, 14th Street NW, and Barracks Row/8th Street SE/Capitol Hill, will support greater numbers of restaurants and more creative concepts than strictly neighborhood-serving districts.

Neighborhood serving restaurants reliant on repeat business from area residents can't slide on quality of food and service, because they are reliant on repeat business from a somewhat static (but growing) customer base.

5.  Denser neighborhoods (Dupont Circle, Columbia Heights, U Street, etc.) will also support greater numbers of restaurants than less dense neighborhoods (Takoma).

For the most part, the neighborhood commercial districts that are adding restaurants are doing so because of the construction and tenanting of multiunit residential buildings in those areas (U Street, Columbia Heights, 14th Street, Downtown, Greater Capitol Hill, Petworth, Takoma).

Brookland is about to add almost 900 units in the Monroe and Market development next to Catholic University and the Brookland Metro, and 200+ more units in the development of the former Colonel Brooks Tavern site at 8th and Monroe Streets across the street from the Metro.  This is going to bring new opportunities for restaurants to that neighborhood, which will now have a better chance at developing into a decent restaurant hub for outer Ward 5, which is automobile-centric and lacks other centers.

6.  Money (disposable income) matters.  Emerging districts are still more risky and have fewer cuisine options than transitioning (and healthy) commercial districts.

There is a difference between what's possible in emerging and transitioning commercial districts, especially given the inflow of younger residents with high disposable income.

The original "Richard's Rules" post is focused on neighborhood restaurants and simplicity and a broad appeal in their offering.  Emerging districts tend to have a narrow appeal.  Higher concept places still tend to fail in emerging districts.  See the past blog entry, "In lower income neighborhoods, are businesses supposed to be 'community organizations" first?'" about the failure of Ray's the Steaks, in Ward 7.

But DC and other cities could do a much better job seeding such neighborhoods with focused restaurant development programs comparable to Boston's Neighborhood Restaurant Initiative program, which provides grants and technical assistance to restaurant ventures in underserved neighborhoods.

Investors in the Chez Billy restaurant in the Petworth neighborhood include the developer of the Park Place apartments development, because they saw the need to expand the range of amenities available to potential tenants.

7.  Driving neighborhoods, like emerging districts, will continue to have a harder time attracting restaurants because of lack of density and parking options.  I can't claim to have any solutions.  As commercial corridors strengthen particular nodes, improvement becomes possible in nodes/spots/pockets along the corridor.  But the walkable neighborhood commercial districts, especially as multiunit housing is added, will remain the preferred location for restaurants and retail growth.

It's all about concentration-clustering-critical mass.

Brookland is a good example.  There is now a more upscale pizza restaurant there--Menomale--but restaurants in the automobile-centric part of Ward 5 (contrast to the development of a little restaurant district in Bloomingdale, the most walkable part of the ward) have never been that great (including stalwarts like Colonel Brooks and Kelly's Ellis Island--since converted to a Mexican restaurant).  Although this also is explained by the discussion above concerning age and income demographics and the light density of the ward.  With 1100+ new housing units coming to the neighborhood, things are likely to change.

8.  Will the next wave in restaurant development be the addition of family-friendly restaurants?  Personally I think Comet Ping Pong is overpriced and the food isn't that great.  But it's a great space for families--the kids can run, around play games, etc.--so the business continues to be very busy and "successful" even if I'll never go back.  If upper middle class families stay in the city, then restaurant options might have to expand some to accommodate children.

9.  When restaurants shift their business model to late night music, you know their food business is failing.  This relates to the TruOrleans blog entry at District Cuisine, but there are many many many examples throughout the city.  It's something for residents to watch out for as neighborhood commercial districts revive (or not) throughout the city.

10.  Chains aren't the wave of the future.  Still.  Despite the IHOP in Columbia Heights, opened by people with a more suburban sensibility and not a lot of experience with independent restaurants, outside of Downtown, chain restaurants aren't likely to be a big part of the restaurant resurgence in the city.

Only regional-serving shopping districts like Gallery Place and other Downtown districts can support the customer volume that chain restaurants (like Legal Seafoods or Ruby Tuesday's or Fuddruckers) are looking for.  These restaurants are helped by their proximity to the Verizon Center, and suburban event-goers may be more comfortable supping at brands they are familiar with.