Coogan’s Restaurant Closing in May: New York Restaurant Closures Due to High Rent Continues

Coogan's Restaurant closing
iStock.com/ben-bryant

Coogan’s Restaurant is closing in New York, bringing an end to what has been a staple of the Washington Heights neighborhood, known for its welcoming nature and bravery in setting up shop in what was at the time considered one of the worst areas in the city back in 1985. The restaurant said that the high rent in New York has forced it out of business, cutting their profit margins to a razor-thin width and forcing them out of business. Many of the New York restaurant closings in 2018 and prior in 2017 were the result of sky-high rent prices. While New York is notorious for the extreme cost of property in the city, in recent years that problem has only intensified, with many eateries unable to match the rising prices.

Coogan’s is celebrated in the community for the important role it played throughout Washington Heights’ history. Coming in when it did, at the height of a drug wave affecting the neighborhood, many appreciated the restaurant’s ability to serve as a safe haven where all were welcome. Politicians frequented the restaurant, some even holding interviews for top positions at the establishment.

But Coogan’s Restaurant closing comes as the establishment found itself unable to adjust to rising rent costs. New York-Presbyterian Hospital, which owns a good chunk of property in the area, was looking to hike the restaurant’s rent up to $40,000 a month. At that price, Coogan’s simply wasn’t able to stay in business.

“I hope you felt as warm as I did by walking in here. They made me happy, they gave me warmth, they gave me a purpose in my life,” owner Peter Walsh said in a message to his customers. “Thank you for putting sneakers on my children, which they did.”

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Walsh followed that up with a message for his former landlord: “There’s community here, don’t build walls. Don’t pull a plug so fast on a person when they’re still breathing.”

New York Restaurant Closings in 2018

Coogan’s restaurant closing is far from the only shutdown in the city so far this year.

In fact, New York restaurant closings in 2018 have gotten off to a brutal start, with several high-profile businesses claimed so far.

Ramen restaurant Sapporo, izakaya Sake Bar Hagi, and sushi spot Iroha will all be shuttered this Saturday. The three restaurants operate in the same building, which is reportedly in desperate need of repairs.

Perhaps the most high-profile shutdown this year so far is Guy Fieri’s restaurant closing. Guy’s American Kitchen & Bar has served its last bit of Donkey Sauce and Pretzel Chicken Tenders as the location shuttered on New Year’s Eve. Even with the weight of a celebrity chef behind it, the Times Square restaurant simply couldn’t cut it.

High Rent to Blame for Restaurant Closures

The high rent for New York restaurants has caused many eateries in the Big Apple to close over the past few years. Coogan’s restaurant closing is only the latest example.

Some restaurants reported rent rising by as much as $80,000 over the past two years. The cutthroat environment of the New York restaurant business, coupled with the always-increasing rent prices, has created a deadly situation for many eateries.

Many businesses look to keep rent to about 10% of total revenue. With sky-high rent prices in the city, however, and you end up with New York restaurants’ profit declines across the board. The restaurant business is already predicated on razor-thin profit margins, with rent increases obviously exacerbating that inherent difficulty in the food industry.

Guy’s American Kitchen & Bar, for instance, likely paid between $100.00 and $300.00 per square foot. That equals about $1.8 million a year in rent for the restaurant. Certain areas in Times Square will run the owner of the lease much higher than that, with prices averaging between $1,500 and $2,000 per square foot.

New York also blows away the competition when it comes to rent. While other highly desirable locations like Los Angeles and San Francisco also feature exorbitant rent prices (especially for San Francisco apartments), they still fail to compare to New York on average. In Manhattan and parts of Brooklyn, rent can hit $120.00 per square foot. In LA, the highest rent average is about $52.00, while in San Francisco, you’re paying $45 per square foot.

Which is to say that owning a restaurant in New York is fraught with challenges, with both rent and competition eating into profits.

But that doesn’t mean these restaurants were perfect. While many were distraught over the Coogan’s Restaurant closing, there’s at least one person who was not sad to see Guy’s restaurant close for good.

“Were you struck by how very far from awesome the Awesome Pretzel Chicken Tenders are? If you hadn’t come up with the recipe yourself, would you ever guess that the shiny tissue of breading that exudes grease onto the plate contains either pretzels or smoked almonds? Did you discern any buttermilk or brine in the white meat, or did you think it tasted like chewy air?” wrote restaurant critic Peter Wells. “How did nachos, one of the hardest dishes in the American canon to mess up, turn out so deeply unlovable? Why augment tortilla chips with fried lasagna noodles that taste like nothing except oil?

He added, “When you hung that sign by the entrance that says, WELCOME TO FLAVOR TOWN!, were you just messing with our heads?”

 

Sources

Coogan’s, an Uptown Stalwart, Makes Its Last Stand,” The New York Times, January 9, 2018.

Famed Washington Heights Restaurant Closing Over Rising Rent,” CBS New York, January 10, 2018.

3 Midtown Japanese Mainstays Will Close This Week,” Eater, January 9, 2018.

Don’t blame the Donkey Sauce. Experts say Guy Fieri’s restaurant didn’t earn enough to survive in NYC,” The Washington Post, January 5, 2018.

Restaurants are seeing their profits devoured by landlords and labor costs,” Crain’s, January 23, 2017.

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