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Update August 15, 2014- Reuters reports that the private equity firm Leonard and Greene and Partners LP purchased the 40% stake in USHG, not Goldman Sachs as were guessed.
June 24, 2014- By Steven E. Greer
Will Danny Meyer relocate his original Union Square Cafe to BPC? The NY Times reports that he is closing the original restaurant in Union Square as the rent has risen too high. The new location is yet to be determined.
Also, Danny’s tone-deaf hearing problem might be caused by investment bankers making bad decision for him. The NYT article states that Danny sold 40% of his empire to bankers. We believe the name of the bank to be Goldman Sachs.
Only a banker would think it is couth to open a restaurant in the 9/11 Memorial and sell booze, as if it is Disney World and not a cemetery on par with the Arlington National. Only bankers would think it is a great idea to expand into Moscow, right as Vladimir Putin was becoming a raging homophobe, then invading Ukraine.
Recall, BatteryPark.TV first analyzed the valuation of Union Square Hospitality Group, using investment banker methods (that we pioneered), and concluded that Shake Shack was worth more than all of his fine dining restaurants put together. We derived a valuation of $3 Billion, being conservative, if he expands the Shake Shacks and Blue Smokes.
The NYT article states, “The latest casualty is Union Square Cafe, a pioneering restaurant that became the mother ship of the fleet run by the entrepreneur Danny Meyer. It will forfeit its lease at the end of next year, close its doors and move to a location to be determined. The East 16th Street space it has occupied for nearly 30 years will go on the market this week, brokers said.
Mr. Meyer, who also runs Gramercy Tavern, the Modern and the forthcoming cafe in the National September 11 Memorial Museum, said Union Square Cafe would reopen, but not necessarily in or near Union Square.
In recent years, his Union Square Hospitality Group has focused expansion not on fine dining, but on its profitable Shake Shack burger chain: the 48th store opened Monday in Washington, D.C. In 2010, the company closed its high-end Indian restaurant Tabla; in 2011 it sold the prestigious Eleven Madison Park to its chef and general manager; and in 2012, the company sold a 39.5 percent stake to an investment bank, which helped fuel growth for Shake Shack, now serving in London, Dubai and Kuwait City.
“There’s no such thing as a New York restaurant that is immune to real estate,” Mr. Meyer said in an interview. If Mr. Meyer, a mogul with acclaimed and successful restaurants all over the world, can be compelled to close Union Square Cafe, they ask, what hope is there for the rest of them?
“Eventually, they’re going to drive away all the people and places that make New York City interesting,” said Bobby Flay, who last year closed Mesa Grill, the Flatiron district restaurant that put him on the national map, when the rent doubled. A Midtown landlord offered him a prime location near Rockefeller Center, but ultimately leased the space to a TD Bank branch.