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|Articles - Nov/Dec 2012|
|Monday, November 05, 2012|
Page 3 of 4
On a Monday afternoon in September, Kurt Huffman is eating an heirloom tomato salad at Imperial, one week after the restaurant has opened. The owner of ChefStable, a restaurant incubator and investment group, Huffman has a stake in some of the city’s most talked-about venues: Ox, Lardo, St. Jack, Ping and Grüner. Not all have been successful. In September, one of his venues, Corazón, located in the Twelve West building downtown, closed after three months.
“The labor model was completely out of whack,” says Huffman, noting that Corazón, which tried at once to be a high-end Mexican restaurant and also do $3 tacos, ground its own masa for tortillas and hand-diced the salsa. Even in a DIY food city, there are limits. Huffman observes. “Nobody hand-cuts their own salsa. That’s ridiculous.”
For restaurants, labor is typically the biggest cost and the most difficult to manage. Unlike most states, restaurant owners in Oregon are also prevented from factoring in tips as part of staff pay, which can add to labor expenses. The absence of a so-called “tip credit” law means an Applebee’s in Florida can net about 7% more than an Applebee’s in Oregon, says Huffman. Although independents and chains alike are affected, chains typically factor the tip credit into their business model, says ORLA’s Hamilton. It’s one reason why Oregon is home to more single-owner operators and fewer chain restaurants than other states.
Tip credit aside, Huffman says Portland’s food and beverage regulations are generally favorable to the industry and are key to understanding why so many people open restaurants in Portland. Like many proprietors, Huffman singles out as particularly important the low cost and relative ease of obtaining a liquor license. In Portland, an annual license runs about $400 a year. In Boston, a private sale license costs about $40,000; in Idaho, $70,000.
“They give them to almost everybody,” says Huffman, referring to Oregon licenses. “All you have to do is have food alternatives.” Portland also has among the most permissive regulations in the country for opening a food cart. And, of course, there’s no sales tax in Oregon, a factor that helps sustain local restaurants.
The city and state help boost the industry in other ways. Capitalizing on a nationwide food renaissance that has been under way for years, Oregon Tourism Commission offices are championing culinary tourism, with specific campaigns touting Portland’s independent restaurants. For the past eight years, for example, Travel Oregon has run an “Oregon Bounty” advertising campaign, featuring chefs and other food professionals from around the state. More recently, 66 restaurants participated in Dining Month, a Travel Portland campaign that offered three-course meals for $25. Multiple restaurants saw record-breaking sales, and a follow-up survey suggested that about 30% of diners were tourists, says Courtney Ries, consumer marketing manager for Travel Portland.
In a city lacking major tourist attractions, individual restaurants have already developed an out-of-town following. Naomi Pomeroy, the chef/owner of Beast, a high-end, fixed-price, French-inspired restaurant, says about 75% of her customers are from elsewhere. Recently, a couple celebrating their 18th anniversary flew in from Chicago just to eat at the restaurant.
Beast is located in a restaurant cluster in the NE Killingsworth neighborhood, one of many community restaurant districts that tell another story about the rise of Portland dining. Or, as Pomeroy puts it: “Part of Portland food culture is people want to go see those cute little neighborhoods.”
So closely entwined are Portland neighborhoods and restaurants that the story of the industry’s boom could be written as a narrative of local neighborhoods, a narrative in which new restaurants serve as a catalyst for neighborhood revitalization, which in turn attracts more restaurants and customers.
That virtuous cycle has been fueled in part by the Portland Development Commission investing substantially in the local industry. Between 2007 and 2012, the city agency loaned about $1.8 million to 22 dining establishments, including $50,000 for Grüner and $60,000 for Bunk Bar. Private-sector developments are also playing a role. Historically, developers have shied away from restaurants, mainly because banks consider them high risk, says Kevin Cavenaugh, a local developer. He recently completed Ocean, a $1.6 million “micro-restaurant” complex in Northeast Portland featuring food-cartstyle venues from some of the city’s leading restaurateurs. Portland builders are at the forefront of recognizing the value of dining establishments as tenants, he says. “I can think of no better way to give a building instant pop than adding a restaurant.”
That pop is well understood in the hotel industry, says Machado, who, a few years before the opening of Imperial, inked a beneficial deal with the owners of the Hotel Modera that made Nel Centro the house restaurant. Over the years, the onus of quality has shifted from the hotel to the hotel restaurant, he says. “It used to be ‘A’ hotel and ‘B’ restaurant. Now it’s ‘B’ hotel and ‘A’ restaurant. It has to do with the business traveler, who is looking for conviviality, action, quality in where they’re staying.”
Tuesday, January 21, 2014
BY PETER BARNES
The defense market can be easy to overlook in Oregon, a place with a bigger reputation for its antiwar movements than for its military history. Yet when it comes to the U.S. defense budget, the Department of Defense did roughly $1 billion in business in Oregon that year.
Tuesday, February 25, 2014
Health care and vacations rule. That’s the consensus from our reader poll on workplace benefits that help retain and recruit employees.
Thursday, January 16, 2014
BY JOE ROJAS-BURKE | OB BLOGGER
An economic study of emergency room utilization in Oregon set off a thundering media stampede earlier this month. I was struck by the cut-and-paste sameness of much of the reporting and how awfully little it had to say about the untreated wound that is causing all the pain: the hole in our healthcare system where a robust primary care infrastructure should be.
Thursday, January 23, 2014
BY ERIC FRUITS | OB BLOGGER
Oregon’s minimum wage workers rang in the New Year with a raise. At $9.10 an hour, the state now has the second highest minimum wage in the country.
Tuesday, February 04, 2014
BY MARK BLAINE | OB BLOGGER
Even after years of video experimentation on the web, media companies still struggle with what it should be, how it should be done, how much we should spend on it and how much readers/users/viewers really want it.
Friday, February 07, 2014
BY TOM COX | OB BLOGGER
President Obama's State of the Union address held lessons for all leaders.
Friday, January 24, 2014
BY TOM COX | OB BLOGGER
January needn’t be a time to make well intentioned promises to yourself that you soon break.
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