Some hopeful restaurateurs may have jumped the gun in South Lake Union, where recent closures show a healthy lunchtime and happy-hour bustle from Amazon’s workforce has yet to carry over into evenings and weekends.
When Amazon.com chose a rundown part of downtown Seattle as the site of its future headquarters, various food entrepreneurs and chefs eagerly joined in on the effort to create a bustling, lively city neighborhood from scratch.
Few were as famous, and bullish, as Josh Henderson, who last year opened five restaurants on Amazon’s downtown campus. But it hasn’t been an easy fight.
The area is not yet a destination like Capitol Hill or Ballard, and crowds thin out in the evenings, normally the best time to turn a buck in the restaurant business. Last March, Henderson was forced to chase trends and turn a failed taco spot, Bar Noroeste, into a ramen house.
And on Aug. 12, three of Henderson’s restaurants on Westlake Avenue — Vestal, Poulet Galore and Cantine — closed on the same day, despite multiple attempts at reconcepting.
“We just don’t have the financial appetite to double down again,” Henderson said.
Other entrepreneurs say they’re having trouble, too — and fear they may not hold out long enough for the new district to blossom. These restaurateurs’ woes underscore the challenges that come with Amazon’s fast-paced transformation of downtown Seattle.
Amazon holds one-fifth of the city’s prime office real estate — more, both in percentage and in total square footage, than any other single tenant in the 20 biggest U.S. cities.
Such weight gives it the force to reshape entire sections of the urban core, a power it’s determined to wield. Amazon has even become a landlord, carefully choosing the dozens of retail businesses that go into the buildings it owns. The company rents out space to 32 businesses, 24 of which are cafes and restaurants.
Amazon’s head of real estate, John Schoettler, said the massive build-out around South Lake Union and the Denny Regrade is turning the area into an “18-hour district,” where citizens can live, work and play, nearly around the clock.
To an extent, the company has succeeded: Thousands of Amazonians crowd streets where empty storefronts and former furniture shops and theaters have been turned into restaurants by big-name local chefs like Tom Douglas and Ethan Stowell. Bars are packed during happy hour, and grocery stores such as Uwajimaya are catering to residents of fancy, new apartment blocks.
“We definitely see a positive trend,” said Wassef Haroun, the owner of Mbar, a rooftop bar that on a recent sunny Saturday had a 45-minute waiting list. By building relatively small company cafeterias in relation to the size of its workforce, Amazon is “effectively driving people out to the street, which is very helpful,” he said.
For Amazon, the success of the revitalization is a matter of time. Schoettler said that in South Lake Union and downtown, some 8,000 apartments are scheduled for completion in the next 18 months. And Amazon’s growth continues: The company will have space for 55,000 employees in Seattle by the end of the decade, up from more than 40,000 now.
“It’s all coming together,” Schoettler said.
But for now, nights and weekends are slow: scarce bar crowds after happy hour, many dining rooms empty at 8 p.m. Even on sunny evenings, many patios sit half-filled.
Henderson bet big on Amazon’s 18-hour district.
In addition to Bar Noroeste, a Mexican-themed restaurant that later turned into Kiki Ramen, Henderson opened a Shake-Shack-esque chain called Great State Burger and a European-inspired rotisserie-chicken counter, Poulet Galore.
For an after-work hangout, he opened the craft-beer bar Cantine. High-end dining: Vestal.
In the year that followed, Henderson retooled his menus repeatedly.
Cantine opened as a retail bottle shop as well as a craft-beer bar, then adjusted to focus on just being a bar. With business lagging, the concept changed again, to opening in the morning as a coffee shop with espresso and pastries. That never gained traction, and Cantine reverted to serving just alcohol.
Vestal’s failure was more personal to Henderson, those close to him said.
From its start, the contemporary American restaurant was ambitious. It put Henderson back in the kitchen and was critically acclaimed, but the dining room often sat completely empty on Tuesday and Wednesday nights, a former employee recalled.
Vestal temporarily closed in the spring and reopened in late May with a cheaper, salad-and-sandwiches menu, counter service and an extended happy hour.
A few weeks into that second act, a former employee (who asked to not be identified) said that Henderson wasn’t optimistic the changes would turn a profit, and that he told senior staffers it would be cheaper just to pay rent than to keep Poulet Galore, Cantine and Vestal afloat.
On Aug. 12, all three closed. Henderson’s restaurant group, Huxley Wallace, posted the following note on their entrances: “Despite an amazing staff and effort we weren’t able to make these concepts work in this location.”
As for what he’ll do now, Henderson declined to comment other than to say he would try to sublease the spaces.
Henderson is not alone in his struggles to drum up nighttime business.
At the South Lake Union incarnation of Cactus, a local Mexican chain, owner Marc Chatalas tried adding a late-night happy hour, “but it has not been effective. Simply, the neighborhood has not developed,” he said.
Like many bars and restaurants on Amazon’s urban checkerboard of a campus, Chatalas is waiting for all the tenants to fill the thousands of new apartment units that Amazon has been touting. “Everyone is hanging their hats on these numbers,” he said.
Stowell, who owns 16 restaurants in eight different neighborhoods, said the South Lake Union location of Ballard Pizza Company is “the slowest” due to low foot traffic in the evenings. No traffic in the evening means no alcohol sales, a major source of revenue for all restaurants, he said.
“I have zero regrets about going down there,” Stowell said. “Now if you ask me would I open another restaurant down there, I would probably wait until the nighttime business developed more.”
Stowell added that, “South Lake Union has grown so fast, I don’t think it really has had a chance to grow a soul. It’s a business district, and it takes time to develop that funkiness that Capitol Hill has, that Belltown has, that Ballard and Fremont have.”
Nevertheless, Stowell said it’s hard to gripe when Vulcan, Amazon and other landlords are giving restaurants like him “tenant improvement allowances” or matching funds to cover some of the build-out costs of moving in.
Seizing the day
Tom Douglas, who operates Brave Horse Tavern, Serious Pie and other restaurants in the area, said success is a matter of adapting to the rhythm of the neighborhood by, for example, adding happy hours and more outdoor seating space.
“You have to adjust the model to take advantage of when people are there,” he said.
So, restaurants are forced to focus on the Amazon lunch rush.
It’s like operating in an airport food court. The goal is to get customers their meal and on their way quickly to turn as many tables as possible.
“Most restaurants make their money or do the majority of revenue during the evening time,” Chatalas said. “We flip the model.”
But lunch doesn’t bring in the same amount of money as dinner or weekends, several restaurateurs said.
Dinner is more profitable because customers usually linger and order alcohol and more expensive food when they don’t have to rush back to the office.
Staffing is also an issue. A few owners and managers say that since tips are low, they’ve had trouble hiring experienced front-of-house staff, and others say they can’t lure young, talented cooks who would rather focus on ambitious fine dining than the lunch rush.
Chicken or egg?
Some restaurateurs say they’re caught in a chicken-or-egg situation. What comes first — the patrons or the establishments?
Amazon’s stance is that the restaurants come first. Lease requirements for restaurants in its Doppler Building property stipulate that venues must stay open late on weekdays and on weekends. That makes some tenants grumble.
Two former employees at Henderson’s now-defunct Bar Noroeste said it was cheaper to close early if sales were low.
On several Saturday and Sunday nights, revenues amounted to only about $100, not even enough to cover the cost of staffing, so management sent the staff home and called it a night, a common practice in the restaurant industry.
Henderson confirmed the restaurant got in trouble after Amazon’s security took note of the early closure, and the company then threatened to fine Noroeste for breaking the lease terms. Henderson said that’s no longer an issue at its new iteration, Kiki Ramen.
Two former employees there were less conciliatory, complaining that Amazon security guards micromanaged and created an uncomfortable working environment by tracking their every move and reporting what time they closed up shop.
Another restaurant owner, who asked not to be identified, said it’s like “Big Brother is watching.”
Amazon downplayed the role of its security staff. Schoettler said there’s no mandate on its guards to keep track of restaurants’ closure times; their job is to provide safety on campus and report maintenance issues. That said, they will report any abnormalities.
Schoettler added that the company works with restaurants “to make sure they’re staying healthy.” It sits down with the operators to discuss their business model and helps with some marketing expenses.
“As we grow in Seattle, we recognize the importance of investing in our hometown in ways that benefit our neighbors and our employees — that includes working with our retail tenants to ensure that they have every opportunity to grow in the neighborhood and be successful long-term,” Schoettler said.
So far all the restaurants operating on Amazon’s property have survived except for Henderson’s Noroeste, which reopened under the same owner.
Roz Edison, co-owner of Marination, a casual Hawaiian-Korean restaurant, understands that Amazon needs all the restaurants to “hold the line” and stay open at night to give people a reason to come.
But the restaurant’s business drops 50 to 60 percent on weekends, prompting Edison to ask Amazon to allow her to close on Sundays or at least close earlier because there’s no foot traffic, she said.
Amazon denied her request.
“It’s like in high school,” she reflected. “Some parents are casual. You can be home around a certain time, just not too late. And then you have parents that go ‘Nope, you have to be home exactly at 9 p.m.’ Amazon is the strict parent.”