Cities that Sizzle

Nation's Restaurant News, Jan, 2001

"There are a million people knocking on the door now," says Kent, president of Boston-based National Restaurant Brokers. "And there's not that many spaces or licenses available."

That is especially true in Boston, where older architecture makes it difficult for many national operators to find spaces large enough to do the volumes that would make the sites appealing. Furthermore, limited quantities of liquor licenses, high construction costs and scarce labor all create daunting obstacles for those wanting to become a part of the historic city's annals.

But while the hurdles are many, perseverance can be lucrative. Given an affluent residential and business population with a penchant for dining out and a thriving tourism industry, the potential for striking it rich makes Boston hard to ignore.

"Because it is a market in big demand, finding the right real estate is a challenge," acknowledges Doug Schmick, president of Portland, Ore.-based McCormick & Schmick's Seafood Restaurants. "We had been targeting Boston for the past three to three and a half years."

The company's persistence paid off in the fall of 2000 when a McCormick & Schmick's opened in Boston's theater district, in a space vacated by local seafood competitor Legal Sea Foods, which moved across the street. Because crowds have warmly received the newcomer and the company was able to secure another downtown location, a second McCormick & Schmick's is scheduled to open in the fall of 2001 at nearby Faneuil Hall. The restaurant's dinner check average is about $35.

"When you find the right opportunities, you need to take advantage of them," Schmick notes. "We believe that a market such as Boston has the demand out there. It's strong enough and diverse enough that a second location will be a positive."

Serveral Other national operators also have debuted in Boston in recent years. Brasserie Jo, Maggiano's Little Italy, Marche Movenpick, P.F. Chang's and Fleming's have all set up shop alongside a healthy assortment of local restaurateurs and chains likewise eager to profit from the area's enticing demographics and economy. The city's first Houston's is slated to open soon, also at Faneuil Hall.

"Boston as a market is in the top tier in terms of culture, sophistication, appreciation of the finer things and other psychographics," explains Bill Allen, president and chief executive of Fleming's Prime Steakhouse & Wine Bar. The Newport Beach, Calif.-based company opened its Boston restaurant just before the summer of 2000 and would like to open at least one more in the area. Fleming's dinner check average is about $46.

He adds: "If you home in on the Back Bay area, you find all of the things that are intuitively positive -- high income levels and high traffic patterns. Psychographic information shows people with high levels of education, people who are well traveled, people who spend money on smaller indulgences, like dining, and people who frequent the arts."

While Boston is known widely as the place where a band of renegades hosted an infamous tea party and as the origin of Paul Revere's midnight ride, it is also highly regarded for its wealth of universities, medical institutions and thriving businesses. Nearly 6 million people live in greater Boston, and more than a half million people live in Boston proper -- an attribute that distinguishes the city from other metropolitan areas that tend to empty once offices close.