When Marc Murphy announced this summer that he was closing his flagship Landmarc restaurant in New York City after 14 years and reopening it as a private event space, he wasn’t the only high-profile restaurateur making that decision. David Bouley and Richard Melman recently went the same route. No doubt economics played a part in their decisions, as costs for real estate, labor and food continue to escalate.
“It doesn’t take a massive amount of labor to execute at a high level,” says Donnie Madia, co-owner of One Off Hospitality in Chicago. “Private events cut labor by 40% to 50%. Plus, proteins and wine [the biggest expenses] are ordered in exact amounts in advance, so you can run the kitchen at 25% food costs or lower.”
Madia has been waiting 10 years to do events at Avec, one of his group’s restaurants. “We couldn’t come to an agreement with Avec’s landlord for the second-floor space,” he says. “In the meantime, we were giving a lot of business to neighboring restaurants.” But this year, One Off bought the building.
For its fall opening, the group gave the second floor a separate design and identity from the restaurant downstairs. Chef de Cuisine Perry Hendrix offers most of Avec’s menu along with large-format items, such as a whole roasted fish and a roasted lamb dinner. “Private events help with the labor shortage problem,” he says. “We only need one cook to execute a party, and Avec’s existing employees can serve.”
Lettuce Entertain You Enterprises has built private dining spaces into most of its full-service restaurants, but it wasn’t until the launch two years ago of Ivy Room, its events-only space, that the MCO realized how profitable events have become, says Managing Partner Kiran Pinto. That success inspired LEYE to convert Intro, its rotating pop-up concept, into an event space called Stratford on the Park.
Unlike Landmarc and Avec’s spaces, Stratford is a large venue designed for functions such as weddings and holiday parties—though it can be divided to accommodate smaller or multiple groups. The location, across from Chicago’s Lincoln Park, played into the decision to transform Intro into an event space, says Pinto. The model works better there than a restaurant, she adds. Aside from pinpointing food and labor costs, “guests pay a deposit, which helps with cash flow—something we didn’t factor in before,” she says.