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By Gamal Hennessy
Several people were stabbed over the weekend outside a TriBeCa club. The violence that occurred is the latest incident involving this venue and is sure to be used as an example of out of control nightlife here in the city. Unfortunately, incidents like this might be inevitable given the current position of the New York Police Department. Until nightlife venues are given the same police protection as other venues, violence will be a part of the nightlife experience.
Deco has several aspects to it that make it a less than ideal example of a New York venue. According to Matthew Chayes of New York Newsday, Deco has been operating without a liquor license since January 3, 2009 and it was the scene of two shootings in 2007. On Saturday night, two people were allegedly slashed with razor blades by Mario Olmedo. Later that same evening there was a report that three more people were attacked with blades outside the same venue.
Newsday wasn’t able to contact the operators of Deco for a statement, but the ripples are already being felt in the industry. Operators who were planning to move the Flatiron performance space Cutting Room to TriBeCa withdrew his scheduled appearance before the community board yesterday because he didn’t want the backlash from Deco to influence the decision on his liquor license.
It is an unfortunate fact of nightlife that fanatics and amateurs get most of the attention when it comes to news stories about nightlife. Very few pages are written about the tens of thousands of patrons who go out, have a good time and get home safely without slicing each other up in the street. It is objectionable that these incidents occur in spite of the fact that nightlife advocates have repeatedly requested the ability to have uniformed police officers patrolling the streets near venues during peak hours. One of the major points that came out of the Nightlife Summit of 2006 was a specific request by the New York Nightlife Association to have paid police patrols outside clubs to enforce laws that club security can’t enforce outside the venue. This request was, and continues to be rejected by the NYPD because it could potentially breed “corruption between the club owners and the cops.”
Serious violence is rare in nightlife, but as long as there are fanatics out there, the potential for violence exists. But while the NYPD protects itself from potential corruption, operators are held responsible for violence that they do not have the authority to control. They suffer the wrath of the irate community board members looking for any reason to shut down our venues. We as patrons are left to fend for ourselves among the fanatics when we go out, creating a situation where some of us will have to go to the hospital when our night is over.
Have fun.
G
By Gamal Hennessy
Everyone knows we are in a recession. Not many people are sure how we’re going to get out of it. Many lawmakers on the state level think one of the keys to generating revenue and balancing their budgets will come from increases in so called ‘sin taxes’. This would mean that the state tax on liquor could go up. If the taxes on liquor go up, how long will it be before the cost of drinking goes up too?
Andrew Cleary of Bloomberg.com reported that state law makers across the country are planning to increase the taxes on beer, wine and spirits in an attempt to close budget gaps through increased taxation. At the same time, stocks of beverage companies have been decreasing up to 40% in the last 12 months as people tighten their belts in the face of economic uncertainty. While lobbyists for the liquor companies plan to fight against these measures, victory for them appears unlikely. If they get taxed, then the operators who serve the liquor have to pay more per bottle of liquor. If they have to pay more to buy liquor, guess who’s going to probably pay more to drink it….
I’ll give you a hint…it’s you. But before you bang your fist on the desk and curse the greedy club owner for stealing your hard earned wages, it would help to understand the economics of serving drinks.
Of course, the main source of revenue for a bar is the drinks that are served. Each drink also represents a specific cost that the bar has to pay before the bartender can throw that little napkin down on the bar and ask you what you want. The price the bar pays to serve each drink is based on the cost of the ingredients, the serving costs and the glass costs which combine to become what business plans call the cost of goods sold.
Understanding how the cost of goods sold works, we need to examine a drink and the costs associated with it. Let’s take a Vodka/ Cranberry for example because it’s simple. You go to the bar order it and the bartender charges you $8. You are shocked.
According to the Professional Bar & Beverage Manager’s Handbook, there are about 25 ounces of liquor in a 750 ml bottle. So if a bar uses a bottle of Absolut with a wholesale price of $15, then every ounce of vodka costs $.60 ($15 ÷25 ounces). If the bar puts 4 ounces of vodka in each drink, then each bottle can make about 6 drinks. So for every $15 the bar spends on liquor it pulls in $48 (6 drinks x 8 dollars).
But a vodka cranberry has more than vodka in it. Let’s say that the cranberry juice is $.20 per ounce and the ice and lime are $.05 each. When the bartender makes your drink, let’s figure a 4 to 3 ratio in a 10 ounce rocks glass. That means roughly 4 ounces of vodka ($2.40) and 3 ounces of cranberry ($.60), ice and the little lime wedge ($.10). Based on our initial prices, the bar pays $3 for the materials to serve you the drink. If the drink is $8 that means there is $5 in profit.
At this point, you might assume that you need to open a bar and make some money. Before you apply for your liquor license, you need to consider the additional costs. Drinks don’t just appear in front of you. This isn’t Star Trek. The bartender who served you the drink has to be paid. The bar back who gets the ice and cleans up the empty glasses has to get paid. Each glass that drinks are served in have to be paid for and each one has a potential to only be used once because it could chip or break completely in the hands of the drunk and clumsy. All those costs could equal an additional $.50-$.75 per drink. There is a tax on the liquor that figures into the price. If that tax goes up, then the cost of the drink goes up too.
Then you have to take a look at where you are. Unless you’re passing around a bottle of Mad Dog around a barrel fire by the highway, the space you’re drinking in has to be paid for. There is the rent for the venue and the taxes associated with that real estate (keep in mind that the cost per square foot in New York City is among the highest in the country). There are entertainment costs whether you’re talking about a satellite TV sports package, a DJ, a band or an internet jukebox. There are costs associated with the furniture you’re sitting on. There is a cost for the décor. There are costs for the security guard or hostess standing out front. The license for the computer system and touch screens that the bartenders use isn’t shareware. It costs money. Utilities like water, gas, telephone, heat, electricity and website maintenance associated with the venue also have to be paid. When you take all of that into account, you might have added another $2 to the cost of serving you that drink.
Then there are costs for things that patrons don’t see at all. There are insurance costs. There are costs for the lawyers, accountants and other professional services that a business needs. There are costs for maintenance associated with keeping things like the lights and the toilets working. You’re now talking about another $.50 to $1 cost per drink.
Finally, you have optional costs like marketing, advertising, uniforms for the staff and laundry costs for those uniforms. Or promotional deals like happy hour, two for one specials and other events designed to get people in the door by lowering the price of the drinks. If you decided to include these costs, tack on another $.20-$.50 per drink.
Now that $8 might cost the bar more than $7 to serve you. That leaves a per drink profit of less than $1. While that can be a decent return if you serve thousands of drinks per night, it doesn’t leave much room for error. If the tax goes up enough, most or all of that profit could be gone.
Of course, there are other ways a club can generate money, like covers, bottles and corporate parties. And if the state decided to let more bars open, it might not have to raise the liquor tax to generate more revenue. But this is not an argument to make you feel sorry for operators. The professional ones can keep costs down and be very successful, even in this economy. It is meant to serve as a more realistic look at the price a bar has to pay to keep the doors open. We want you to avoid sticker shock when you slide up to the bar. Just take a deep breath, pay for your drink and toast the inevitable end of the recession.
Have fun.
Gamal
By Gamal Hennessy
Many major cities have designated areas where nightlife concentrates. Vegas has the Strip. New Orleans has Bourbon Street. South Beach has Ocean Drive. London has Leicester Square. New York has pockets of venues scattered all over the city, but what if there was a central area that was easy to get to, isolated from local residents, and big enough to house the next generation of mega clubs? Could something like that work here? Would we want it to?
Diane Vacca of Chelsea Now reported last week that members of community boards 4 and 5 in Midtown are in the initial stages of a plan that would designate areas in the Garment District (between 34th and 41st Streets and 6th and 9th Avenues) as a manufacturing zone. By using a non residential area for larger nightclubs like the venues currently in West Chelsea, the boards hope to give the residents of the quality of life they are looking for while providing space for a vital part of New York’s culture and economy.
Clubs have had conflict in recent years with local residents, community boards and police where local residents complain that the club’s activities are detrimental to the neighborhood and club operators complaining that they don’t have the tools or authority to solve the problems and remain in business. The encroachment of residential buildings into traditional nightlife areas has exacerbated the problem, which probably had a lot to do with this proposal.
Creating an Ocean Drive in Midtown wouldn’t radically alter the geography of most of the cities venues. Local bars, live music venues, lounges, speakeasies, and wine bars would still flourish all over New York. But mega clubs like the historic Palladium, Roxy and the Limelight, recent venues like Crobar and Lotus and current clubs like Webster Hall and Home need more space, generate more street noise and cause more late night traffic congestion than the smaller venues. Creating an area for them could help isolate the inevitable issues that come up.
There are at least two issues with the current plan, both turn on economics. The first question is “How do mega clubs fit into the future of New York nightlife?” The desire for operators to sink money into a mega club might not be very strong. Real estate costs are still fairly high, even in a recession. Liquor licenses are still a time intensive process that can tie up an investment for up to a year. Operating costs might be prohibitive in this district if patrons are planning to hop from club to club like in New Orleans, but are unwilling to pay substantial covers five or six times in one night. And the ability to pack a mega club with patrons on a consistent basis might be challenging without a point of difference to set them apart from the club next door. Steven Lewis has noticed a dispersal of nightlife from a few large venues to many small ones. In that kind of environment, can a mega club survive?
The second issue has to do with the zoning of the area itself. Ms. Vacca reports that the city is unwilling at this point to rezone the area for a nightlife district. Altering their position may take some time. Even if they succeed, operators run the risk of sinking investment capital into properties in a nightlife district only to find that the area is rezoned for residential once they make the area trendy enough for residential developers. This pattern has played itself out in the Meatpacking District and West Chelsea. Vegas and South Beach have created nightlife zones and maintain that status. If a similar New York zone is going to exist, local government needs to have the same commitment to maintain it.
Neither of these obstacles is insurmountable. A specific nightlife zone could spark growth in nightlife similar to what we saw in the mid 1970’s with the rise of Studio 54. Fresh capital and new ideas like a nightlife zone could be the start of a new age in the nightlife industry.
Have fun.
Gamal
By Gamal Hennessy
We go out to have a good time. We want to forget the recession, the housing slump, the credit crisis and the soft job market. We want to drink, dance and seduce each other for a few hours before reality sets in again. The last thing we need is for thieves, pickpockets and scam artists to invade our refuge and make us even poorer than we were before by stealing our wallets, clothing or purses. But that’s what’s happening and this is what people are trying to do about it.
The NYPD recently approached the New York Nightlife Association with an educational campaign to help patrons guard against petty crime in the clubs. While most of the advice is common sense and straight forward, a little prevention can go a long way. Patrons are in a vulnerable spot. They are often intoxicated, literally in the dark and focused on everything except their personal belongings. Operators can only watch and do so much (like coat check or to a certain extent security guards) to prevent theft. This gives predators space to operate. Ultimately, we are responsible for our own stuff, but the NYPD flyers can make us a little more vigilant on the dance floor.
The underlying dynamic to this situation is threefold. First, there is a historical tendency for different types of crime in nightlife to rise in a down market. The city is trying to reverse that trend in an attempt to maintain its reputation as a safe city for tourism. Second, nightlife itself doesn’t need the negative publicity of higher crime in a time when patron spending is already down. Any steps taken to make the public feel safer are helpful for the bottom line. Finally this gesture between the police and nightlife comes at a time when relations have been slightly strained. The safety flyers might not settle the allegations of phony drugs busts and potential law suits but like the crisis in the Middle East, any steps toward reconciliation have to be taken with cautious optimism. If the NYPD and the NYNA continue to focus on the well being of patrons instead of attacking each other, then thieves and scam artists will have less room to maneuver and we can escape in relative peace.
Have fun.
G
What’s your opinion? We’d like to know.
Nightlife News for January 21st, 2009
By Gamal Hennessy
Time for a New Sin Tax
David Kesmodel of the Wall Street Journal reported on the growing trend of lawmakers across the country to increase taxes on liquor to lower state budget deficits. While sin taxes have been used in the past for governments to get through lean economic times, New York might want to couple that tax increase with an increase in liquor licenses so that more jobs and more taxes are created at the same time.
Playing Well Together
Heather Murray of Chelsea Now found a positive story in the residents vs. nightlife situation. Cafeteria in Chelsea has been working with neighbors to install sound proof windows, police the area around the building for noise and amateur behavior and early waste removal. The situation offers good ideas to operators trying to peacefully coexist with people living near their venues.
Notorious Crimes Taint Movie Opening
The Gothamist reported that four people were stabbed at a party thrown to celebrate the hip hop film Notorious. In a separate incident, the Times reported that a teenage girl was shot and killed at a teen only party in the same weekend. If the film was supposed to be a cautionary tale about the connection between hip hop, crime and violence the message didn’t get through to every one.
What do you think? Should we support more liquor taxes? What else can venues do to work with communities? What will it take to separate hip hop from violence? Add a comment and let us know.
Have fun.
Gamal
Nightlife News for January 13th, 2009
By Gamal Hennessy
Is Squadron in a position to carry out his plans?
Roy Edroso of the Village Voice reports that new Democratic State Senator Daniel Squadron has been chosen to head the cites committee of the New York State Senate. Given his anti-nightlife position during the election, the question is will the new position but Mr. Squadron is a position to carry out his Nightlife Control Plan?
Club security guard sentenced for kidnapping charge
Darryl Littlejohn got 25 years for stuffing Shanai Woodward into a van. He still claims he’s innocent and that his trial was unfair because his name was also linked to the Imette St. Guillen kidnapping, rape and murder. Newsday.com didn’t specify when the St. Guillen case will be tried, but Littlejohn will continue to be a bad example of security the industry will have to deal with
Does the SLA need more inspectors?
A TV station in New York might have found the reason why liquor licenses are so hard to get. According to a spokesman for the SLA, there are only 21 SLA examiners in the whole state, and they process over 6,500 applications per year. But if New York needs to create jobs in a recession, and liquor licenses can create more jobs, why not hire more inspectors?
Watch out for the DOH before you light up
Grub Street has confirmed that the Department of Health has been conducting more raids and handing out more fines for venues that violate the smoking ban. The raids might be in response to more venues turning a blind eye to smoking in 2008, so smoking might become a contentious nightlife issue again six years into the ban.
What do you think? Should we worry about Squadron? What will it take to get more SLA inspectors? Will the DOH crackdown lead to club closings? Add a comment and let us know.
Have fun.
Gamal
Nightlife News for January 5th, 2009
By Gamal Hennessy
Bottle Service isn’t dead. Or is it?
David Hauslaib asserts that the bottle service trend is alive and well, although his argument using the Eldridge is less than compelling. While Scott Solish of the New York Observer provides anecdotal evidence that that economic trend is suffering and may not come back.
If Your Bar Moves, Will You Move With It?
You’ve owned a spot for years. You have a good set of loyal regulars. The economy forces you to change locations in an attempt to save money. Will your loyal regulars be there for your grand re-opening? Glenn Collins of the New York Times isn’t so sure…
When Generosity is Clearly a Sin
Did you hear the one about the priest who holds down the VIP? Well, Sean Evans and Tracy Connor of the Daily News reported on Father Greg Malia living the high life in New York’s most expensive clubs. Unfortunately Fox News followed up that story with news that the church rewarded his nightlife attraction by firing him.
The Best of 2008
Good Night Mr. Lewis author Steven Lewis highlights his picks for best club, best DJ, best party, best blog and best trend in nightlife. Unfortunately New York Nights wasn’t picked for best blog, but we’re hoping to do better next year.
What do you think? Is bottle service on the way out? Will patrons follow a bar? What was your favorite spot of 2008? Add a comment and let us know.
Have fun.
Gamal
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