Why Is It So Damn Tough to Open a New Restaurant in Portland?

Rent, Labor Shortages, High Costs Are Keeping Newcomers in the Weeds

Comments

1
The only labor shortage described in the article is line cooks. There are many people looking for work in this city, the easy solution is to train your own line cooks, which restaurants used to do.
2
GB1's Comment above about there being NO LABOR SHORTAGE, however, NO LINE COOK training seems about right. Yet, it begs the question: With all the culinary academies turning out graduates, and not much access to start-up capital available, how low is the pay being offered to line cooks?

Not only can nobody live on $9.25 per hour minimum wage in Po'town, but with the remedy we've chosen of phasing in the climb to $15.00 per hour being years away (unlike Seattle, where with the sensible exception of businesses with fewer than 50 employees their $15.00 minimum 4 years ago has created more money circulation on the city's streets and even the PUGET BUSINESS JOURNAL which cried Cassandra in greeting Socialist Alternative council member Kshama Sawant when she and her fellow labor activists launched the $15.00 NOW! minimum wage movement, the same PUGET BUSINESS JOURNAL went back after 2 years to study the results and headlined their own admission of error in screaming there'd be a mass exodus of locally-owned businesses from Seattle by declaring "APOCALYPSE NOT."

Moreover, this week's EAST BAY EXPRESS down in Oakland-Berkeley-Richmond-Albany-El Cerrito-Emeryville etc ran the same scare tactic of floating the ridiculous claim of a LABOR SHORTAGE in explaining why food carts are not the low-overhead remedy to the boom\bust cycle of commercial real estate markets. THE EB EXPRESS' reporter Luke Tsai used long-time Oakland food cart and restaurant entrepreneur Gail Lillian as his illustration of why a LABOR SHORTAGE was forcing her to close her popular LIBA FALAFEL food cart. See: http://www.eastbayexpress.com/oakland/li…

I support alternative weeklies that try to broaden coverage, but both the MERCURY & EB EXPRESS could use a BUSINESS section that broadens the discussion of failed local businesses to the wider trends of the 1/10th of 1% that can access capital to start up businesses with asking Kickstarter friends to assume the risk of a new venture. Even the mainstream business community, so slow to recognize the Reagan-Bush-Norquist-Wanniski SUPPLY SIDE HOAX about who creates jobs and who should be able to shift costs & risks to the public while keeping all the profits, even SUPPLY SIDERS are facing the contradiction of cutting costs of LABOR so much over 40 years of Stag-flation on worker wages that DEMAND has dried up because there is no money left for working folks to spend. All those GLOBAL TRADE DEALS never did create a middle class in slave-labor states like Mexico and China so DEMAND has never been made up from where the NIKE's and other off-shore labor-seekers have gone in shredding the Social Contract and reasonable tariff and trade barriers that once made U.S. internal markets and the growing middle class the envy of the world.

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3
The people who opened restaurants 8-10 years ago, and are now successful, took risks to save money. North Williams was crap, Division was ugly, the West End was not the West End.

All these new, wanna-be restaurateurs are complaining because they are moving to established areas that were once shitholes and wondering why the prices are higher than they used to be... well, they are higher because the place is not a shithole anymore. Here's an idea: find your own up and coming shithole.

Open on Foster. Open on 72 by Mt. Scott Park. Open in Lents. Open in downtown Milwaukie. Open on Woodstock --east of 52nd. Don't just follow the trends. Do some demographic trends searches, do real estate searches, and monitor local business journals for trends-- find some promising spots.

Then, open the City of Portland zoning map and find commercially zoned parcels in the target areas. There may be a cheap convertable house or older commercial building in one of these zones.Talk to the owners to see if they will lease it to you, then talk to the city to see how much permits and SDCs will cost. You may be to get a great lease deal with great terms on an underutilized property.

If the property is house, you might even be able to live in the converted attic while you start your business or stick a food cart on there and utilize the yard for seating without touching the house when you are just starting out.
4
Please don't let restaurant owners who don't understand Capitalism 101 get away with lazy arguments like "labor shortage." If there is a shortage of line cooks/restaurant staff, basic economics says you have to either offer higher wages in order to lure workers away from current jobs. Or you go out of business. My guess is that restaurant owners simply want workers to take the low wage on offer and make patrons deal with the wait times. Those who won't pay higher wages will go under, and that's probably what they deserve. Also, basic economics says that this is the best way to fight Portland's housing market price inflation. If workers earn more, they can buy houses and other things and put other people to work through their spending. In this way we can avoid fancy schemes like subsidized housing that don't really work and which also provide fuel for the 1% to complain about "socialism".
5
Sara Dailey was our real estate broker... and our landlord's. She worked really hard to get us into an overpriced space with a batshit insane landlord in a 'hot central location,' We were out of business year one. Yeah, we should have known better... not blaming her... just a cautionary tale: all you idiots going into food - the numbers don't add up. The only winners are real estate agents like Sara.
6
Portland certainly needs more restaurants. Make sure the decor is industrial. That's a sure win.
7
small players should not be looking for leased space in 'hot central locations.' Do you want to complete with Fat Heads, 10Barrel, Marukin, etc? No. Watch the movie Moneyball: your goal is to find unknown/underutilized niches. It will take research and vision.