Baltimore restaurant closures continue as suburbanites dine elsewhere

Baltimore has seen another spate of restaurant closures — as consumer habits change and suburbanites find less incentive to dine in the city, according to experts, restaurateurs and consumers.

At least 24 restaurants have closed since January, including Federal Hill stalwart Regi’s American Bistro, Hampden’s popular Corner Restaurant and Charcuterie Bar and Canton’s Fork and Wrench.

Increased vacancy rates for small commercial real estate spaces reflect those closures. Chris LeBarton, a market economist for CoStar Market Analytics, said vacancy rates for spaces up to 3,000 square feet — often home to independent restaurants — rose to 8.1 percent at the end of March, up from 6.8 percent at the end of September, when the city underwent a previous wave of closures. That rate is at its highest since 2010.

Data from the U.S. Bureau of Labor Statistics point toward a trend long in the making. The number of Baltimore’s food and drinking establishments decreased 4.6 percent between 2013 and 2016 — from 1,613 to 1,539. Nationally, the number of establishments increased by 5.7 percent, from 8.9 million in 2013 to 9.4 million in 2016.

Analysts attribute Baltimore restaurant closures to factors including the natural cycles of the industry, millennials’ preference for convenience and value and — more particular to this area — competition in the suburbs and high crime rates that ward off suburbanites.

Downtown Partnership President Kirby Fowler pointed out that restaurants often have a three- to five-year life cycle.

“There might be issues involving the city’s reputation, but it as well could be an explanation of what the restaurant is doing or not doing,” he said of the factors driving local closures. “To open a restaurant is a risky endeavor, but it’s what we all want to happen more and more.”

Anirban Basu, Baltimore economist and CEO of Sage Policy Group, said, “It’s not unusual for restaurants to open and close.” In this foodie moment, more focus on innovation and fusion of cuisines could mean more openings in coming months.

In fact, anticipated openings include Giada de Laurentiis’ restaurant at Baltimore’s Horseshoe Casino, GDL Italian by Giada, to debut May 22; Baltimore Built Bistro (“B3” for short) launching in the former Bad Decisions space in Fells Point this spring; and the Inner Harbor premiere of Blackwall Hitch this fall.

A broad issue is the impact of millennials on the dining scene.

Brandon Chicotsky, a faculty member at the Johns Hopkins University Carey Business School, attributed closures to trends of millennials wanting to “eat conveniently,” which often means resorting to at-home dining options, including saving money by shopping at grocery stores, and convenient food-delivery options.

He said the 18-to-35 age group, in particular, has had 50 percent fewer restaurant visits per capita in the past 10 years, and they go out at a lower rate than older millennials and Generation X, those born between the mid-1960s and early ’80s.

"Restaurants that are now perceived to offer convenient delivery, high-quality food, and a healthy or sustainable brand association are succeeding more than restaurants, many of which are debt-financed, that invest in dining experiences, reservation services and parking,” Chicotsky said.

Alan Morstein, who put Regi’s American Bistro up for sale earlier this year and closed its doors in April, said there are few iconic restaurants left in Baltimore. Fast-casual dining, however, seems to be on the rise, he said.

“You don’t see burgers-and-wings places closing in Federal Hill,” Morstein said. He said he thinks the days are over for tablecloth restaurants in the neighborhood.

Cecilia Benalcazar co-owned Federal Hill’s In Bloom, which closed last month. She said millennials, often wanting a $12-to-$18 price point or happy hour deals, posed a challenge to her chefs, who used high-quality ingredients that often cost more.

But Benalcazar was also one among restaurateurs, customers and analysts who say diners are increasingly opting out of the city, either out of fear for their safety — or because suburbanites have more options closer to home.

In Bloom was one of several restaurants that closed in South Baltimore within months of one another.

“For five restaurants to go out of business … something is going on. Maybe [the crime] was the nail on the head,” she reasoned.

According to Baltimore City Police Department data, violent crime spiked in 2015 and continued to rise through last year. The biggest increases in crime included homicides, shootings and robberies.

Shannon Foster of Windsor Mill said she rarely goes to the city because of the crime. The 22-year-old, who grew up in Edmondson Village, said her family moved out of the city after things began to feel unsafe. Now, they only travel to the city for certain occasions, like a good brunch, or to run errands. But even then, Foster said, she’s been harassed and physically threatened by strangers. The stories about crime don’t help, she said.

“Last summer, I read so many stories about people who were riding bikes, for instance, getting robbed by kids. … It makes you not want to go into the city anymore. It’s not fun anymore,” Foster said.

Minh Vo, co-owner of The Bun Shop, said he decided to close the eatery’s downtown shop in March after it was robbed several times. There were also incidents of harassment, with customers pouring pitchers of water onto staff and other customers. In one instance, Vo said, a customer was attacked after trying to prevent a woman from getting her purse stolen.

“We always got the ultimatum from staff members: They didn’t feel safe working there,” he said, and business wasn’t as good as The Bun Shop’s Mount Vernon location, which remains open.

Basu called the closures “a warning signal.”

“What the city restaurants need is massive reduction in violence in the city,” he said.

Some suburbanites say convenience and parking are bigger factors than the crime.

Michael Pollina, 35, of Parkville wrote in an email to The Baltimore Sun that “crime ranks far below finding a parking spot” as an obstacle to downtown dining. Still, he makes the effort to dine in Baltimore: “The county just can’t offer the same quality and variety of restaurants as the city.”

But Basu pointed to competition via the expansion of restaurant offerings in suburbs like White Marsh, Columbia, Hanover and Hunt Valley. “Much of the disposable income and discretionary spending power is in suburban areas,” he said.

Dining options in areas such as Ellicott City, Annapolis and Harford County all have improved markedly as well in the past decade. A recent Baltimore Sun ranking of the best restaurants in the area included some newer flavors from the suburbs — The Turn House, Victoria Gastro Pub and Royal Taj in Columbia, Citron in Pikesville, Cunningham’s in Towson and Alchemy Elements in Bel Air — alongside such classics as the Milton Inn in Sparks, Linwoods in Owings Mills and Tersiguel’s French Country Restaurant in Ellicott City.

“I never go to the city,” said Sara Pistorio, a 22-year-old Perry Hall resident, as she noshed on some French fries and ketchup Sunday at a street festival in Towson. She dreads looking for parking in Baltimore, so the suburbs are simply more convenient. Plus, she says, the options in her area have expanded over the years, particularly for someone who prefers a vegetarian diet, as she does. Among her favorites are the tofu options at Taco Love Grill and sushi at Chopstix Cafe. “It’s so good,” she said.

Back in the city, restaurateurs like Benalcazar and Morstein are hopeful.

Benalcazar co-owns Blooming Deli in Federal Hill with her husband, chef Kevin Perry, who runs it. She hopes that nearby residential areas and apartment complexes mean “that things will come back around.”

Morstein plans to open a food stall — A.J.’s Deli — in Mount Vernon Marketplace this July, where he’ll serve up sandwiches and delicatessen fare.

“I see [food halls] as the next bold move in the city,” said Morstein, who has owned chains in food courts in the past. Food courts and halls are more cost-effective, he said, allowing owners to save on expenses and fixed costs typical of sit-down restaurant spaces, which include everything from HD cable TV to OpenTable memberships and electrical maintenance.

Bucking the city closure trend are stalwarts that have formed long-term relationships with customers. Vince Culotta owns Sabatino’s in Little Italy, which his mother’s family opened in 1955. He says diners still come from Baltimore County or even Washington to order the baked rigatoni or veal francese.

“Any business has ups and downs,” he acknowledged. He said times are tough for newcomers: Competition is stiff, and the city gets a bad rap in media and elsewhere.

“If you’re just opening up a restaurant,” he said, “that might be difficult.”

Baltimore Sun reporters Sarah Meehan, Christina Tkacik and Jessica Anderson contributed to this article.

bbritto@baltsun.com

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