The Power of New York’s Nightlife Reputation

By Gamal Hennessy

Time Out Publishing is releasing a book this week entitled “World’s Greatest Cities”. In the book, New York was singled out as the best city in the world when it comes to things like architecture, arts and quality of life. While most New Yorkers might feel nonchalant about this title, nightlife natives should take note of the impact our nightlife has on the city’s reputation and the impact of that reputation on our lives. The writers of this book singled out New York above all others because of our 24 hour culture. It is nightlife that gives New York its unique culture. Any moves to suppress that culture will have a direct effect on the economy and prosperity of the entire city.

Reputation for tourists

New York is known as ‘the city that never sleeps’. That reputation draws millions of tourists to the city every year. But when visitors think of a metropolis opened around the clock, what do you think pops into their minds? Do you think they are dreaming about a 24 hour Duane Reade? I don’t think so. Is it possible that people fly into New York from Sydney and Bali and Johannesburg to visit the all night bodega? Probably not. The concept that draws people to the city that never sleeps is the idea that we work all day and we party all night. Where do we party? If you have to ask that question, please close this page and visit a different site.

In 2004 a research organization called ARA conducted a study on the impact of nightlife on the New York’s economy. ARA found that 77% of all New York visitors identified visiting a nightclub or bar as one of their primary reasons for visiting the city. This means that almost three quarters of all our tourists came to New York to experience our nightlife. How much money would be lost from incoming tour groups, business conventions like the New York Auto Show, award ceremonies like the MTV music awards, and artistic events like Fashion Week if people decided that New York was no better than any other city when it comes to nightlife? It is hard to imagine how the reputation of New York would remain the same if people came to the conclusion that nightlife in New York, Cleveland, and Spokane were substantially similar.

Reputation for talent

It’s not just temporary occupants of the city that are lured by our nightlife. Every year job recruiters go around the country and around the world to find the top people from the top schools and try to lure them to New York. Recruits are seduced with money and the chance to work in the beating heart of their industry. They are also drawn in with images of high class bars, private parties and mega clubs. TV shows filmed in New York like Sex and the City, and Gossip Girl often have young workers hooked before the recruiter even shows up. People want to work in New York to get access to the nightlife.

If New York didn’t have the reputation for nightlife, how many young, bright people would choose to move to here to pursue careers? Other cities have cheaper rents, more space and other advantages. If New York isn’t unique when it comes to bars and clubs, what is the point of suffering thru all the difficulties of making it here? Other cities like Atlanta, Miami, Los Angeles and Las Vegas are trying to use a vibrant nightlife to attract the best and brightest. Can we afford to lose this pool of talent and still be the center of the universe?

It is not coincidental that financial networks like CNBC are focusing on the Time Out book. A city’s reputation can directly influence the economic power of an area. New York City is central to several different industries. We are not dependent on nightlife or any other single business the way Detroit, Orlando or Las Vegas are. But nightlife is still a vital part of the overall dynamic. NIMBY community groups, opportunistic politicians and other anti-nightlife advocates can willfully ignore the contribution that nightlife makes to New York. If we follow their lead or allow them to make decisions for us, we are going to lose more than the title of the best city in the world. We will lose the reputation that drives our economy.

Have fun.
Gamal

How Big is New York Nightlife? Part II

By Gamal Hennessy

Last night I described the size and scope of nightlife venues and what they do to directly stimulate the economy. Today we’ll look at the other side of the equation and look at the economic activity of patrons in New York clubs.

Patron Population

All the venues and operators are useless without someone to actually serve. The 2004 Impact Study concluded that the attendance in New York clubs is more than 65,000,000 entries per year. Keep in mind that ‘entries’ is not a direct measure of the number of people who patronize nightlife on an annual basis, since club hopping and bar crawling could take one person to several venues in a night. A tourist might hit a club on her vacation in New York. A nightlife native might visit 50 or 60 venues in a year. Although total entries do not translate directly into 65,000,000 patrons, it is more than three times the amount of attendance at all 8 New York sports teams combined. 64% of nightlife patrons live within the five boroughs with each New York native visiting an average of 2.14 clubs per night out. The other 36% of all nightlife patrons came into the city from out of town and they visit an average of 2 venues per stay.

Cash Flow

Pre-Club Activity: Patrons don’t just magically appear on the dance floor at night. There are many activities that they engage in and spend money on before the night begins. The Study found that each native spent an average of $67 per person on these ‘pre-club’ activities including purchasing clothing, dining out and other activities. In addition, 82% of patrons used some form of transportation to get to the venue, for another $15 per person. So in total, each New York resident spent about $80 before she even walks inside the club. Tourist spending at non nightlife venues was even higher than resident spending. 86% of tourists people engaged in some other activity when they went to a club including dinner shopping, but also including hotels, theaters and sightseeing for an average of $90 per person. The out of town group also spent an average of $110 to get to and from the city and the venues they decided to visit, bringing their per person spending total to almost $200.

Liquor Purchases: The Study and the Zagat guide don’t estimate how much patrons spend when they are actually in a venue, but we can develop an educated guess. In our estimate, we’re going to assume that a person goes into a bar or club and buys four drinks; two for himself and two for the person he is with. I’m assuming a social unit of two, even though larger groups are just as common in clubs. I’m also assuming basic manners here, which means people not going Dutch. This might be overly optimistic in New York City, but in my experience New Yorkers can be very generous with alcohol, especially if they’ve already had a drink or two.

To keep things simple, I’m not including cover fees, coat check fees or bottle service, which would raise the numbers exponentially Let’s say each drink is $10. This is an average between the $5 beer and the $15 martini. That means in every club this guy goes into, our theoretical patron spends a total of $40. Let’s project that out to the total group. If there are 65,000,000 entries per year and only half of them pay for drinks then that’s 32,500,000 “drink entries” per year. If each drink entry is worth $40, then the estimated spending by nightlife patrons in clubs is 1.3 billion dollars.

Effect on the City

The amount of jobs, patronage and spending in nightlife might seem abstract until you put it in context. To place the numbers in perspective, we can look at the local film industry. According to the Mayor’s Office for Film, Theater and Broadcasting, local TV and movie production generates $5 billion dollars in economic activity for the city. In comparison, nightlife generates twice the revenue. The film industry has a government office to support and promote it. Nightlife has no such office despite repeated calls from operators to create it. If and when the city puts its full support behind the nightlife industry the benefit to the city could rise exponentially.

Have fun.
Gamal

How Big is New York Nightlife?

By Gamal Hennessy

There is a movement building to transform millions of nightlife patrons into a political force. As organizations like the Nightlife Preservation Community begin to gain momentum, it makes sense to look at what nightlife brings to the New York economy in hard numbers. When you look at the number of jobs, the number of patrons, the amounts the clubs spend and the amounts the patrons spend you begin to see how vital nightlife is to the financial health of the city.

Where the numbers come from
The New York Nightlife Association (NYNA) is an organization that represents the nightlife industry in New York. The NYNA commissioned a study in 1998 and again in 2004 called “The $9 Billion Dollar Impact of the Nightlife Industry on New York City”. Two weeks ago, Zagat released its 2009-2010 New York nightlife Guide with an updated analysis of the club industry. The numbers in this article are based on these two studies and my own calculations. The numbers coming out of the study have been verified, but since I can hardly add, my calculations are suspect at best.

Venues and Operators
According to Zagat, New York City currently has more than 1,300 nightlife venues, including 100 new venues added in the past year. This finding is supported by our own Trends Report that has continued to track new venues opening almost every week in spite of the economy. While there is no mention of how many venues were lost in 2008, the number of new venues is remarkable considering the economy and the stiff competition for drinking dollars.

Each venue needs several different people on hand to service and entertain customers on a nightly basis. The employees included management, security, bartenders, bar backs, dancers, waitresses, sound and light technicians and food service people such as cooks and chefs. It did not cover people who worked in the club, but were not direct employees of the venue, like musicians, DJ’s and promoters. According to the Impact Study, each bar has an average of 17 people on staff and each nightclub having approximately 38 people working there for an average of 27 operators per venue. That means that the total number of operators currently hovers around 35,000 people. The secondary group of natives who work in the club but do not work for the club is also considerable. Based on the study, nightlife generates 8,600 more local jobs as a direct result of its activities. This means that nightlife employs almost 44,000 people locally.

Spending by Operators

Wages: There are three major costs that operators pay for to keep their businesses running; wages, operational costs and taxes. Employees on the payroll of venues earn approximately $531,000,000 in wages and salaries every year. Freelance operators pull in more than $320,000,000 dollars per year. I can tell you from personal experience that the distribution of these funds varies wildly. If an unknown DJ spins at a club, she might get free drinks. If I DJ at a club, I might get $250 for a night. If a superstar DJ spins for a night, he could get several thousand dollars. While the distribution of these funds fluctuates there is still more than $850,000,000 in wages being generated by this industry, with a majority of those funds getting pumped back into the local economy.

Operational Costs: A bar or club has to purchase a significant amount of goods and services in order to offer its service to the public. While liquor and food are obvious examples, venues also have to purchase capital improvements to their spaces, furniture, cleaning and sanitation, electricity, climate control, accounting, legal advice, advertising, marketing, permits, music licensing fees and financial services. According to the Impact Study, nightlife spends more than $755,000 million dollars worth of goods and services in the city every year.

Taxes: Nightlife venues have to pay business taxes, sales and use taxes and in certain cases real estate taxes to stay in operation. The employees have to pay income taxes on the wages that they have earned (although I believe some payments are made on a cash basis to avoid taxation). The Impact Study estimates that nightlife pays the almost $104,000,000 million dollars a year in taxes to New York City and another $46,000,000 million dollars to New York State.

Part II of this study will be available tomorrow…

Have fun.
Gamal

Are Police the New Health Inspectors or Tax Collectors?

By Gamal Hennessy

Imagine this. You’re sitting in your favorite bar nursing a drink and wondering how you’re going to convince the waitress to give you her phone number. Without warning three cops walk in, push behind the bar and start poking around with their flashlights, making everyone in the room very nervous. As you gather up your belongings and discreetly make your way towards the door, would you assume that this was a raid? Would you guess that the cops were looking for drugs, guns or child pornography? Would you believe they were looking for fruit flies?

Fruit flies are drawn to alcoholic beverages and bar owners are required by the state law to keep them out of liquor bottles as a matter of public health. As part of the routine inspections by the Department of Health (DOH) bars are inspected for fruit flies and any venue that has fruit flies on or in the bottles is subject to a fine that could run between $700 and $1,000 per infested bottle. This is a normal part of the nightlife business and isn’t really a cause of concern among operators. The problem arises in the way the law has recently been enforced. Even if you are a nightlife native who frequents various venues, you have probably never seen a DOH inspection taking place. That’s because inspectors keep a relatively low profile while conducting their business. Patrons usually have no idea what is going on and they don’t have to. But there have been reports of layoffs at the DOH, which could mean fewer inspectors. But inspections still need to be conducted, especially since every violation can lead to fines that cash strapped city and state governments are desperately looking for. So somehow the DOH has been replaced with the NYPD who is anything but low profile when they come into the bar.

One operator commented on the climate that the NYPD creates; “By sending a uniformed officers from the NYPD behind your bar with a flashlight looking for fruit flies and whatever else they can find at the height of your business hours creates a stressful situation for you and your customers. It looks like a crime was committed in your place and they are looking for evidence. It gets people talking about your establishment in ways you don't want.”

Bar and lounge owners in various parts of the city have described this scenario happening in their bars with increasing frequency. Some operators think that the NYPD has been given a mandate to perform random inspections as a way to “find” violations and provide the city and the state with much needed revenue. Various operators have voiced opinions about the situation: “What they are thinking is that they are going to get funds for a broke state and city no matter what the consequences. No thought is given to the outcome except that those cops better come back with some violations. With cops conducting their random inspections, we are at the whim of whoever is giving these cops the orders to do these. It is much more invasive and detrimental to our businesses. “I don't think this has anything to with revenge against a particular venue. All bars are suffering this treatment. This has more to do with the city's need to collect more revenue in the shape of fines and the fact that they've laid off a number of health inspectors.”

So instead of increasing state revenue by working with the nightlife industry, local government is trying to increase state revenue by intimidating and attacking it, using the police as its instrument. We have pointed out in previous articles that ending the backlog in liquor license applications and increasing the number of venues would actually increase state revenue significantly. And as dangerous as fruit flies are to public health, the police are probably better utilized deterring and preventing crime outside of venues instead of poking around behind the bar looking for bugs. We know that the state wants to use liquor consumption as cash cow and nightlife is an economic resource that the city can use for its benefit, but only if it takes more of a cooperative stance instead of being antagonistic.

Unfortunately, some operators don’t see things getting better because they don't feel the lobbying efforts are strong enough to support their position. “With all due respect to our lobbying groups, I really don't think they have the stomach for this kind of fight. We are just going to have to put up with this intrusive behavior by our government and keep our bars as clean as possible.”

So if you see a couple of cops climb behind your favorite bar, it might not be a raid. It might just be an abusive health inspection.

Have fun.

Gamal

Balancing the Budget at the Bar

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

Where is New York’s Nightlife District?

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

Be Aware, Take Care

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.

Bottle Service Debates, Club Priests and the Best of 2008

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

New York Nights: The Year in Review

Over the past year, New York Nights has offered a unique perspective on the issues that affect the culture and business of nightlife. I’m looking forward to offering you more insight and information in 2009 but if you’ve missed any of our weekly features, don’t worry. I’ve provided links to all of them below.

Let me know what you think; what you want to know more about, where you think nightlife is going in the New Year and what you enjoy about NYN. Thank you for all your support and have a great year.

The New York Nights Weekly Recap for March 28, 2008
The New York Nights Weekly Recap for April 4, 2008
The New York Nights Poll: How has the Smoking Ban Affected You?
The New York Nights Weekly Recap for April 11, 2008
The New York Nights Weekly Recap for April 18, 2008
Last Call: A New York Nights Special Report for April 25, 2008
The NYN Weekly Recap for May 2, 2008
The NYN Weekly Recap for May 9, 2008
The New York Nights Insider for May 23, 2008
The New York Nights Insider for May 30, 2008
The New York Nights Insider for June 6, 2008
The New York Nights Insider for June 13, 2008
The New York Nights Insider for June 20, 2008
New York Nights Insider: The Pride Issue
The New York Nights Insider: The Independence Issue
The New York Nights Insider: The Alternative Venue Issue
New York Nights Insider: The Turning Point Issue
New York Nights Insider: The Mid Summer Issue
New York Nights Insider: The Liquor and Sex Issue
NYN Insider: The Down Market Issue
New York Nights Insider: The Image Issue
The NYN Insider: The Common Sense Issue
The New York Nights Insider: The Outside Influence Issue
New York Nights Insider: The End of Summer Issue
NYN Insider: The Down Side Issue \
NYN Insider: The Economy Issue
NYN Insider: The Sub Culture Issue
NYN Insider: The Controversy Issue
NYN Insider: The Woman’ Issue
NYN Insider: The Food and Wine Issue
NYN Insider: The Future Issue
NYN Insider: The Experience Issue (with Election Update!)
NYN Insider: The Crime Issue
NYN Insider: The Election Holiday Issue
NYN Insider: The Music and Fashion Issue
NYN Insider: The Culture Issue
NYN Insider: The Perception Issue

Have fun
Gamal

Will the Recession Cause an Increase in Crime?

By Gamal Hennessy

Even with welcomed change in White House, the US recession is predicted to last well into 2009. In the past, recessions have led to a dramatic rise in violent crime. Nightlife specifically gained a reputation for being dangerous. Will history repeat itself? If so, what can natives and operators do to mitigate the problem?

Historical parallels
There is a historical link between economic stagnation and violent crime. “Every recession since the 50’s has led to higher crime” usually with a year lag between the economic trouble and the onset of the crime wave. While nightlife in New York experienced an injection of creativity during the last downturn, crime was also an issue. Nightlife was associated (and not always fairly) with muggings, rape, robbery and drug related crimes. Last week’s Trends report predicted an upswing in the nightlife industry. Do those same factors point to more crime?

Unclear Causes
Predictions are mixed because there are distinct differences between past financial crises and this one. Some experts say falling wages and fewer jobs will lead to higher crime as people become more desperate. Others claim that there are fewer potential victims today because electronic banking and video surveillance are so widespread. Mayor Bloomberg has used the specter of increased crime as one of the justifications for his rewriting of the term limits laws, but California has been embroiled in a prolonged financial crisis without seeing a rise in crime. Part of the reason that predicting crime is difficult may stem from the fact that some of the factors that link economics and crime are indirect.

It is easy to assume that if people lose their jobs, they can turn to crime as an alternative to work, but the more likely culprit in a crime spike will be stress not greed. When people suffer from large amounts of anxiety they are less likely to cope with situations in a rational manner. They are more likely to lash out as a way to release their pent up emotions. This lashing out can translate into more crimes including assault, domestic violence and rape. The crime isn’t committed to make money. It is committed without thinking. When the alcohol use increases to deal with the stress and the hormones inherent in nightlife are added to the mix, the threat of increased nightlife crime rises.

Complications
The threat of increased crime also brings new complications to natives and operators in the nightlife space. For the past year, venues affiliated with the New York Nightlife Association and the NYPD have been working together to create a safer nightlife environment. But recent friction between the police and the clubs is building. Within the past month, there have been reports of a major lawsuit from certain clubs against the police. If relations between clubs and the police deteriorate just as a crime wave is building, the results could be a decrease in overall safety for everyone and more animosity between the two groups. There are anti nightlife officials gaining power. They could be willing to use any perceived link between crime and nightlife as a weapon to attack our lifestyle.

Be aware, take care
Nightlife natives need to be aware of their own internal situations when they go out. Stress relief doesn’t need to descend into amateur displays of violence. Over indulgence will only make your situation worse.

At the same time, nightlife operators need to be aware of potential spike in both financial and stress crime and plan accordingly. The image your venue has might be more important as reality, since it will only take a few incidents to draw increased scrutiny.

Beyond the Vodka Redbull

By Gamal Hennessy

The New York nightlife industry is extremely competitive. There are more than 1,000 places for people to choose from and new spots open up every week. Venues are constantly looking for ways to set themselves apart so they don’t lose business. While they are not universal, specialty drinks are becoming a tool in this arsenal in the same way that music, décor and exclusivity can be used to offer people a different type of experience. This is creating an environment where the visibility of the bartender is on the rise.

The economics of drinking
Recent history has not favored signature cocktails. In the era of bottle service bartenders were little more than unseen warehouse attendants, fetching bottles and filling carafes so shapely hostesses could deliver the generic cranberry, orange juice and coke with the marked up liquor. But that situation is changing. The soft economy has put a dent in the bottle service concept and it is unclear if it will survive the downturn. If bottle service is going the way of Merrill Lynch, then clubs and lounges will need new tricks to get people in the door.

Many new venues are opening with a unique menu of signature drinks to break away from the pack. In this system, the bartender becomes analogous to the DJ blending fresh juices, berries and flavored liquor in the same way a DJ blends songs and beats to create something different. Similarity between drinks at different bars is probably inevitable in the same way different DJ’s in the same genre can all sound the same after a while but the opportunity for a distinctive reputation exists with signature drinks in a way that doesn’t exist with bottle service.

Signature drinks can also be a good source of revenue in a down economy. These new drinks normally go for $12-$20 each (while this is exorbitant outside of Manhattan, it doesn’t raise many eyebrows here) so a person who has three of these creations can easily be spending $50 without the tip. Add snacks into the mix and a night of cocktails for two can bring in almost as much money as a couple having dinner. While it won’t completely replace the revenue lost from bottles (it would take five people buying five $20 cocktails each to replace one $500 bottle of Grey Goose) it can soften the financial blow.

Winners and losers
Signature drinks offer something to customers, bartenders and to the club owners. It also signals a shift within the bartending market. No comprehensive study has been done, but anecdotal evidence suggests that some older bartenders who learned on the job over a period of many years are being replaced by younger, professionally trained, and often better looking “mixologists”. Can the older bartenders learn to make the new style drinks? Absolutely. But when presentation counts as much as the taste of the drink the younger bartender has a distinct advantage.

Keep in mind that there is a specific market for specialty drinks. They are primarily geared toward women who are willing to experiment. Guys aren’t usually interested in Asian pear martinis or chocolate cosmos, and there are women who will cling to their vodka red bull like a crack head to a pipe. But nightlife caters to women. Women will go where the drinks are. Men will go where the women are. Everyone will spend more money. Any thing that will bring more women through the door is worth a try. So more places will probably come up with their own specialty drinks…

Are the Clubs Planning to Take on the Cops?

By Gamal Hennessy

The struggle between the nightlife industry in New York and local government might be moving from the blogsphere to the courtroom. A prominent nightlife figure has reported a lawsuit planned by local clubs against the NYPD. Is this the beginning of a new period of freedom for nightlife, or is the struggle about to take a turn for the worst?

The nature of the conflict
In the nightlife blog Good Night Mr. Lewis, Steven Lewis recently wrote that clubs have recently decided to file suit against the police department. According to the post, the clubs will claim that vice cops staged phony drug buys in their venues in an attempt to implicate the club in the crime. The clubs will then claim that the NYPD abused the Nuisance Abatement Laws (NAL) by selectively choosing to enforce the law in a way that would do the most economic damage to the venues. The combination of these acts results in a situation where the police are “ruining lives and business” and violating due process. The damages sought by the clubs in this suit are said to range in the tens of millions of dollars.

These issues have been simmering for some time. Local nightlife leaders have been aware of this problem since the NAL has been more strictly enforced by the police. While they don’t argue the merits of the law, they think the current enforcement of this law is a problem because it is largely politically motivated.

Robert Bookman, the head of the New York Nightlife Association sees an entity behind the police pulling the strings: “Its not police directly but the Civil Enforcement Unit; they’re not talking amongst themselves. The precinct has no control over it [the closings]; the cops who may have given you the underlying summonses have no control over it. There’s a unit called the Civil Enforcement Unit, they’re the ones who get these complaints from the captains, you know, 'This is a place we want you to consider for NAL.' And it’s the attorneys in this unit that put the papers together, who go to court, get the judge to sign it and choose to serve it almost universally on Friday night. Having said all of that, the situation is better now than a year and a half ago.”

The manipulation of the law might go even deeper than the Civil Enforcement Unit. There is a sense in certain sectors of the nightlife industry that larger real estate developers are trying to manipulate the NAL, the community boards, and using other tactics to reduce nightlife in New York City to make room for more housing construction. If the suit is filed, then all these players and their motivations could potentially be brought to light.

Timing is everything
If this situation has been going on for some time, why are the suits being contemplated now? According to the NYNA, the number of NAL closings has gone down since 2007. The police and the NYNA have made progress in working together to make nightlife safer during that period. In the past, individual clubs were reluctant to take action against community boards, police, or city hall because the backlash could close them down through votes against their liquor licenses, more raids or higher scrutiny from the DOH. So why go to court now?

NYN can only speculate on the actual timing of the suit. It is possible that the recent real estate slump and the political concerns swirling around City Hall make this a good time to go on the offensive with the police, whether or not they are initiating the abuse or just pawns for another group. It could be that the clubs found a way to avoid retaliation, giving them more freedom to act. It is also possible that the economic slowdown makes repeated weekend closures under the NAL impossible to absorb. If clubs are closed for too many weekends they might not reopen at all.

New York nightlife needs the NYPD to maintain the safety of its customers and workers. A protracted court battle between the two groups could lead to a more friction that would ultimately be detrimental to the people who enjoy the nightlife lifestyle. Hopefully, the announcement of a potential suit will induce both sides to come to an amicable agreement before the issue gets dragged through the courts. No matter which direction this goes, NYN will continue to follow the story.

Have fun.
Gamal

Bloomberg’s Nightlife Record

By Gamal Hennessy

New York City Mayor Michael Bloomberg is expected to announce plans to run for a third term in office tomorrow. Various groups are weighing in before the official announcement and the outcome will be controversial no matter how it shakes out. Nightlife, as a distinct facet of the city, also needs to consider the implications of Bloomberg’s tenure. What has the mayor done to support or hinder nightlife during his term? Is nightlife better off with a new mayor?

To get a better picture of how the mayor has impacted nightlife recently, NYN went through all of its past coverage to find Bloomberg’s influence, even though all these events cannot be directly tied to him. Here is a sampling of his programs affecting nightlife since 2003.

Supporting the nightlife industry

October 2007: New York Nightlife Association and New York City Police Department create a new plan to improve security conditions after two separate nightclub murders.

October 2007: New York City launches multi-media campaign to attract tourists to various aspects of New York City, including nightlife.

February 2008: NYC expands its free condom offering to bars and restaurants in the face of rising HIV rates.

July 2008: Mayor signaled willingness to rescind the cabaret law, although that willingness has not been backed up by actions at this point.

Opposing the nightlife industry
March 2003: New York City institutes a smoking ban in bars, clubs and restaurants. While smoking rates have gone down citywide and anecdotal evidence suggests that non smokers now go out more, the ban has amplified issues between local residents and clubs.

June 2007: Mayor’s plan for congestion pricing in midtown threatened to create residual traffic jams on nights and weekends when the tax wouldn’t be in effect.

September 2007: Arguments between the city and local taxi drivers over GPS, credit card, TV screens in the back of all cabs boil over into a cab strike.

April 2008: The NYC Department of Health targets select gay clubs for violations while possibly ignoring a majority of others

Real Estate Issues
The mayor enjoys support in the voting community and in the business sector. Their basic argument is that the extraordinary economic times that we live in call for a mayor that has the business experience to see the city through this difficult time.

When you look at how business has fared in New York recently, it is worth noting that the real estate sector, which experienced a boom under Mr. Bloomberg, is in full retreat now after years of wild profit speculation and uncontrolled growth. It also makes sense to point out that the encroachment of residential real estate into formerly commercial areas where nightlife thrived added to the conflict between clubs and local residents who didn’t want to have their illusion suburban quiet disturbed while they slept in the middle of the city. A more balanced investment by the city between more residential real estate and more support for local nightlife might have been the wiser business strategy.

It is easy to see how Mayor Bloomberg’s term in office was more beneficial to New York nightlife than Mayor Giuliani’s, since Rudy would have preferred to close all clubs. It is difficult to say that his impact on New York nightlife has been wholly negative, given some of his actions. It is impossible to tell if nightlife would be given more support to thrive under a new mayor because we don’t know who the opposing candidate might be. But it is possible to see that he is willing to impose his own lifestyle on others and circumvent or rewrite laws to achieve his goals. If that kind of brazen cowboy attitude to power fails miserably on a national level with Bush/Cheney, what makes us think it will work better on a city level?

Have fun.
Gamal

Source: Michael Barbaro: New York Times

Give us your opinion on what’s going on. Use the comments space below to tell people what you think.

The Beginning of the End for Bottle Service

By Gamal Hennessy

The state of the financial markets has a ripple effect on New York nightlife. The most immediate impact will probably be on the pervasive practice of bottle service. Certain clubs are already scaling back their bottle service promotions. While it might not disappear, bottle service won’t be able to survive as a widespread practice. How will the nightlife landscape change if the bottle goes the way of Lehman Brothers?

When you order bottle service, you’re basically paying for temporary prestige in a club. You and a few of your friends get to skip the line and sit at a table instead of standing. Your one (or more) bottles of liquor and mixers are served by an attractive waitress so you don’t have to fight for drinks at the bar. Your area is often defined by a velvet rope so you don’t have to mingle with commoners.

The cost of this prestige has no realistic relationship to the actual cost of the liquor. A $70-$80 bottle of Gray Goose can easily go for $500. When you buy bottle service, you’re sending the social message “I am a VIP. I can afford to be extravagant.” Club owners have profited from people’s need for prestige. One owner said that bottle service accounted for up to 70% of his bottom line revenue.

Bottle service has been a staple in nightlife for more than 10 years. It survived the bursting of the internet bubble and the war on terror. When the housing market began to soften, bottle service was still a widespread practice fueled by hedge fund managers, i-bankers, and corporate sponsored credit cards. The fall of several key financial houses in the past two months will probably dry up money available to FIRE workers (finance, insurance and real estate), who make up 20% of the nightlife patrons, so bottle service might not be able to withstand the current storm. It will be difficult for bottle service to survive if there the only people who can afford it are movie stars, drug kingpins and oil barons.

The backlash has already started taking shape. Prominent clubs like Prime are announcing a retreat from bottle service and a renewed commitment to ‘catering to the customer’. Prominent nightlife insiders are predicting that the overall club market will contract as poorly run clubs die off and well run spots adapt to the new environment. While the economics of bottle service compensate for the realities of operating costs, clubbers like me (who can’t justify the cost of bottle service) see a positive change for the better. The average club customer who couldn’t afford a bottle may no longer be treated like a second hand citizen. Clubs might become more about pleasure and less about posturing and prestige. History has shown that people continue to drink during bad economic times, so even the i-bankers will still belly up to the bar. They just won’t be able to separate themselves from the commoners.

Have fun.
Gamal

Is Dating Too Expensive in New York?

By Gamal Hennessy

Dating in New York is a contact sport. The ones who succeed have confidence, determination, charm, wits and the ability to improvise. We need to find a way to pay for the costs of dating. We need a way to live in the city on one income. Forbes has released its annual list of best cities for singles and New York has barely cracked the top ten. Has the high cost of living made New York an inhospitable dating environment?

The Forbes Best List for Singles compares U.S. cities across seven different categories including culture, nightlife, number of singles and cost of living. While New York City is ranked #1 for nightlife, beating out L.A., Las Vegas and Miami for the top spot, it ranked dead last when cost of living alone was taken into account. So the person dating in New York is cut by a double edge sword. We can do anything we want at night, but we have to find a way to pay for our days and our nights.

The basic problem with lists of this type is that they measure quantity as opposed to quality. It’s fine to count the number of single people or the number of bars in certain cities and rank them based on density, but it doesn’t really take quality or variety into account. Does each city have the same range of nationalities, education levels and backgrounds? Is a bar in Charlotte and a bar in Vegas the same just because they both serve beer? Is the experience the same when you can walk to a bar in one city instead of driving for 20 minutes in another? If you think about single life by only tracking the numbers, you might be missing something.

Even taking that potential flaw into account, these findings are in line with personal experience. New Yorkers have always had to find coping strategies to balance high prices with opportunity and we have specific tactics when it comes to nightlife. But in the current market, even the most resourceful among us might be tested. In addition to job conditions in some sectors and higher prices across the board, now we have to compete with an influx of foreign clubbers who have a lot more disposable cash. For some, the burden of New York prices and the emotional impact it can have on dating lead them to the conclusion that dating is easier and more natural in other cities.

But when New York throws us a curve (which is almost every day) New Yorkers don’t leave the city. We turn the challenge into an advantage. We’ve always used roommates, and commuting to our nightlife from outside the city to offset the cost of New York rent. Almost all of us have some kind of hustle to get more money or at least get more of the things we want. And instead of losing the ability to date, we can find new dating ideas that are less dependent on our income. Dating in New York is a contact sport that requires wits and improvisation, but just living in New York proves that you have those qualities.

Have fun.
Gamal

Is the New Limelight a Sign of Things to Come?

By Gamal Hennessy

Most of the iconic New York clubs are gone. Studio 54 is a theater now. Palladium was torn down and replaced with an NYU dorm. CBGB became a John Varvatos boutique. There were recent rumors that Limelight would be turned into a shopping mall. Just before the specter of mediocrity fell upon us again, a new deal was announced to turn Limelight into a corporate event space. Will other clubs turn to corporate sponsorship to deal with rising costs and outside pressure? If they do, what happens to our nightlife?

Limelight was a staple in New York club scene. Housed in a historic church, it drew the biggest names in house and techno music. It was the playground for the Club Kids of the 80’s and 90’s and became one of the most prominent clubs in the country. It was also infamous as a criminal haven. The venue was closed several times on drug related charges and was connected to Michael Alig’s murder of Angel Melendez. The venue reopened as Avalon in 2003 and closed again a few years later. In January of this year, there were reports of the whole space being torn down and turned in to a shopping mall. New York was set to lose another influential club in an era of shrinking nightlife.

A group of investors has offered another option. Instead of leeching the heart out of Chelsea with a huge JC Penney, the new plans for Limelight include a space for film, TV, corporate and special events. With 30,000 square feet, it’s easy to see the club used during the Tribeca Film Festival, or parties for the Grammy’s and other events. It could have concerts, fashion shows and launch parties of every type. Would it go back to being a focal point for dance music? Probably not. Would it be little more than a glorified crack house? Probably not. Corporate sponsorship may not be the ideal legacy for Limelight, but it’s better than being a Spencer’s Gifts…

You might not like the idea of a corporation taking over a club space, but this isn’t a new phenomenon. Corporations already wield huge influence over sporting events, stadiums and live concert venues. Most of the clubs and lounges in the city are taken over by corporate parties during the holidays. You even see a corporate presence during non holiday periods. I was at 230 Fifth over the summer and there were sections for Citibank and Goldman Sachs and several other banks, complete with easel signs. I thought I took a wrong turn and went to the Javits Center by mistake. Big companies already have their hands in nightlife. The question now is how it will affect us.

Corporations have money and manpower to control, alter and maintain a space. While most of them don’t want to be in the club business, they might see the traditional club spaces as good investments for marketing, promotion and as pure real estate plays. If New York continues to turn its back on nightlife, more owners might see the logic in making money in corporate entertainment as opposed to nightlife. If that happens, how will that affect the economic and cultural impact on the city as a whole? Where will our underground music, dance, fashion and art come from? Where will the 65 million club entries go if they don’t work for a corporation? Will we be shut out of the party?

Have fun.
Gamal


Source: Good Night Mr. Lewis