Prakas & Co is thrilled to have been featured in another article in the South Florida Business Journal. We would like to extend a massive thank you to Matthew Arrojas for continuing to shine a spotlight on the Florida hospitality industry. For more of Matthew’s content, you can view his page here.

Fed up with harsh pandemic lockdowns in the Northeast, restaurant owners have begun to pack up and leave.

They’ve brought their buzz-worthy menus and operating expertise down from foodie havens such as New York City to make investments in the South Florida market.

And judging from the swell of customers and media attention these just-arrived food and beverage concepts have garnered, the Big Apple’s losses could amount to culinary gains for a region without a coveted Michelin Guide award-winning restaurant.

Insiders credit Florida’s pro-business stance, which allowed Sunshine State restaurants to reopen earlier than those in other areas, with the rash of new or established concepts debuting here. Many of those business owners have invested heavily in the market and, while it’s anyone’s guess whether the restaurants will thrive, initial demand at several of the eateries seems promising.

Skeptical about the buzz? Try getting a reservation at Carbone on Collins Avenue.

“We’ve doubled and tripled down on Miami,” said Jeff Zalaznick, co-owner of Major Food Group, the company behind the Italian-American eatery. He relocated to South Florida permanently during the pandemic.

After debuting the highly anticipated New York restaurant in Miami Beach, the group plans to open a second eatery in the Miami Design District later this year. A third is on the way to Miami’s Brickell neighborhood.

New York-based Host Restaurants’ arrival was met with similar excitement.

“It feels like I spend less time running my company and more time being a reservationist every day,” said owner Curt Huegel, who opened Avalon Steak & Seafood in Delray Beach in February. He already has a second South Florida restaurant in the works.

But while there’s no denying that the influx of new restaurants could help boost the local economy, for those already here who are working to make a name for themselves, these newcomers’ immediate success could pose a threat in an already competitive and challenging market.

“What I don’t want to see, but is inevitable, is out-of-town visitors or new residents going to where they’re already more comfortable,” said David Morales, a partner in Miami sushi spot Itamae and an attorney who works with local restaurant clients.

The Avalon Steak & Seafood restaurant opened Feb. 23 in Delray Beach.

Where they’re going
Athan “Tom” Prakas helped Host Restaurants find its South Florida locations. He says newcomers like Huegel are eager to secure space for their eateries in areas with wealthy residents.

“They’re not interested in the suburbs, because a lot of these clients are used to urban locations, so they’re going for cityscapes,” Prakas said.

That could pose a challenge, as the supply of available real estate in those neighborhoods isn’t nearly enough to meet demand. But that hasn’t stopped the steady flow of inquiries Prakas receives.

The restaurateurs he’s spoken to over the past year see the pandemic as an opportunity to diversify their portfolio while their existing eateries in the Northeast remain closed or operate at limited capacity, he said.

New York City restaurants were allowed to reopen at just 25% capacity in February.

Meanwhile, Florida Gov. Ron DeSantis nixed all capacity restrictions on eateries statewide by the fall of 2020 – ahead of most of the country – even as new cases of the virus raged on.

It didn’t take long for Northeast restaurateurs to see the value of operating eateries in more business-friendly regions, especially if their restaurants up north would be forced to shutter again in the future, he said.

“For the operators, it’s essentially a hedge play,” Prakas said.

Will they stay?
Still, some question how the recent influx of out-of-state restaurant owners will play out.

Chef Michael Beltran, of Ariete in Miami’s Coconut Grove, shares a skepticism about what the Northeast culinary migration will mean for the long term.

These investments could be short-lived, he says, especially once their hometowns reopen at full capacity and businesses put Covid-19 closures behind them.

“When their hub reopens, they’re going to leave and go back,” Beltran said. “Meanwhile, the core of what makes Miami special will still be here.”

However, New York celebrity chef Marcus Samuelsson said he isn’t here to make a quick buck and leave. He had been planning to open Red Rooster in Miami’s Overtown neighborhood for four years.

A sister concept to the original Red Rooster in Harlem, the local outpost opened in December.

Samuelsson said he chose Overtown because it’s a historically Black neighborhood. The new Red Rooster was part of Miami’s master development plan for the neighborhood, which sought to spotlight Black-owned businesses in a new central hub.

“I’ve been coming to Miami for many years for the South Beach Wine & Food Festival. I always loved the city and its diversity,” he said. “I looked in many places, but I wanted somewhere that fit the concept of the restaurant and move it into a historically Black town.”

Samuelsson said he’s worked hard to make the new restaurant feel like a local eatery, not an out-of-state concept overstepping its bounds.

He hopes he’s struck the perfect balance.

New York-based celebrity chef Marcus Samuelsson recently opened an outpost of Red Rooster, his popular Harlem restaurant, in Miami’s Overtown neighborhood.

Money on a plate
Major Food Group’s move to South Florida has created hundreds of positions, with C-suite jobs among them.

“I’m talking about everything from my COO to our busboys, and not because I’m telling them to,” Zalaznick said. “I’m offering opportunities, but people at all levels of our company are all flocking to Miami and South Florida to be a part of what we’re doing here.”

The company is hiring to fill 100 positions at each South Florida locations, including management roles.

In addition to creating jobs in tough economic times, the restaurateurs are willing to pay premiums for the right spaces, says Jordana Jarjura, president of Delray Beach-based Menin. Her company is the landlord of the property that leases space to New York’s Host Restaurants.

“Even for elevated markets in Florida, we’re still far below what they’re used to paying,” she said.

That’s because out-of-state restaurant owners from areas including California and the Northeast are accustomed to paying steeper rents than what they’re finding in South Florida, she added. Many have been willing to shell out more than the asking rent to secure top-notch spaces.

Carbone opened to the public Jan. 26 at 49 Collins Ave. in Miami Beach.
Enlarge
Carbone opened to the public Jan. 26 at 49 Collins Ave. in Miami Beach.

SETH BROWARNIK/WORLD RED EYE

The caveat
Along with comparatively cheaper real estate prices, South Florida’s lower wages also appeal to these Northeast arrivals. And the region’s open-for-business attitude resulted in municipal and county governments speeding up the new-business approval process.

It’s why many out-of-state restaurateurs have chosen second-generation spaces – real estate that was previously home to another restaurant.

In many cases, it means the incoming restaurant owner doesn’t need to apply for new permits. Instead, the operating license is transferred from Company A to Company B, which is a cheaper process.

For example, Major Food Group’s Carbone took just three months to open, compared to about a year, on average. The space at 49 Collins Ave., previously occupied by celebrated restaurateur Stephen Starr’s Upland, already had a built-out kitchen. All Major Food Group needed to do were light renovations and license transfers, co-owner Mario Carbonesaid.

While ditching the Northeast for South Florida may present a less-expensive way to get back to business, it’s not without unique challenges.

Newly arrived restaurateurs may be surprised by some of the additional costs.

For example, hurricane and flood insurance isn’t unique to South Florida. But the premiums along the Florida coast are higher than anywhere else in the nation, with as much as 80% of a policyholder’s total insurance costs spent on flood and hurricane coverage.

“It’s as expensive as it gets,” said Luis Gazitua, principal at Coral Gables-based JAG Insurance.

Carbone Miami Beach has the capacity for about 120 patrons indoors.
Enlarge
Carbone Miami Beach has the capacity for about 120 patrons indoors.

SETH BROWARNIK/WORLD RED EYE

Enough to go around?

Valerie Chang grew up watching her father cook in kitchens across South Florida, so it felt natural when she started working as a server when she was 15.

She recalls learning the business with her father and older brother Nando Chang. The trio developed their own style of food that blended the Peruvian dishes her mother grew up with the Chinese cuisine her father knew.

That style soon propelled her to co-found pop-up restaurant Itamae, which scored Valerie and Nando a James Beard Award Rising Star Chef of the Year nomination in 2019.

Valerie Chang’s dreams culminated in the opening of a stand-alone Itamae location in the Miami Design District in November after it outgrew its food hall space.

“I love South Florida. This is my home,” she said. “I’ve had the opportunity to move, but my dream is to stay here, and it was always to open a restaurant here, too.”

Six months after Itamae opened a permanent location, Major Food Group, the company behind Carbone, opened ZZ Sushi just two blocks away.

However, Chang says she isn’t worried about her new competition. In fact, she sees Major Food Group’s new roots as creating opportunity for her young concept.

Chang is among the industry insiders who believe the out-of-state arrivals are just what South Florida needs to shift its restaurant scene into high gear.

“Their brands are recognized. They’re going to bring media and people from outside,” she said. “They’re going to help get us on the map.”

New in town
Here’s a sample of the restaurateurs hailing from the Northeast who have entered South Florida’s competitive restaurant scene:

Ginger Flesher-Sonnier

The Ginger Cos.

Restaurant: Throw Social in Delray Beach

Curt Huegel

Host Restaurants

Restaurants: Avalon Steak & Seafood and an unnamed eatery at former Banyan Restaurant & Bar in Delray Beach

Craig O’Keefe

Clique Hospitality

Restaurants: Lionfish and Delray Beach Market in Delray Beach

Marcus Samuelsson

Marcus Samuelsson Group

Restaurant: Red Rooster in Miami’s Overtown

Jeff Zalaznick

Major Food Group

Restaurants: Carbone in Miami Beach, ZZ’s Sushi Bar in the Miami Design District, and two unnamed projects in the works

 

Source: Matthew Arrojas // BizJournals.com

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