A $20 Billion Megaproject's Key Ingredient: The Luxury Food Court
Related Cos. executive Kenneth Himmel and a friend walked into a fancy Manhattan restaurant a few weeks ago without a reservation, and once seated, started ordering from the menu like food critics on an expense account. Himmel, CEO of the developer's mixed-use arm, didn't want to give anyone a heads up he was coming, since he's in talks with the owner to open a new eatery in Hudson Yards, a small city rising on Manhattan's far West Side.
Himmel has been dining incognito a lot this year, trying to get the average customer's perspective on what high-end restaurants can whip up. On a hiring spree of sorts, he's been recruiting chefs for the Shops at Hudson Yards, a seven-level mall slated to open in 2018 at the center of the $20 billion project. He already signed Thomas Keller, the only American chef to hold three Michelin stars at two restaurants, for what Himmel says will be a steakhouse and an American grill. Also on board are Costas Spiliadis of Milos, a seafood restaurant with outposts in Montreal, Athens, and London, and Jose Andrés, who helped popularize Spanish cuisine in Washington, Beverly Hills, Calif., and Miami.
That's just the start. Himmel has room for six or seven additional “signature” restaurants and a similar number of smaller concepts. Keller, whose bakery-and-bistro brand Bouchon is working on two ideas, was hired by Related to help select restaurants. He said Danny Meyer’s Union Square Hospitality Group is developing a 46,000-square-feet food market at street level just next door, in an office tower Related is also building. (Kate Lindquist, a spokeswoman for Meyer's firm, said there's currently no deal in place for her company to operate the venue.)
Himmel, 69, has apparently never heard the phrase “too many cooks.” Then again, Hudson Yards is a really big kitchen, and culinary talent has become a central pillar to the often decadent, urban super-projects springing up across the country and around the globe.
“It almost begins with restaurants,” explained Himmel. “You cannot talk today about shopping centers or executing great urban mixed-use projects without them.”
Once upon a time, mall operators depended on retail anchors to attract shoppers. Increasingly, they’re using restaurants to draw foot traffic through their halls. Related’s restaurants are so important that they're baked into the pitch to prospective commercial tenants such as handbag-maker Coach Inc., software company SAP SE, and consulting firm BCG. They and others have committed to office space at 10 Hudson Yards, a 52-story office tower whose planned opening this year will serve as a milestone for the entire project—the culmination of a decades-long effort to develop an area west of Penn Station currently used as a Long Island Rail Road yard.
The Shops are a key component of what's taking shape on the banks of the Hudson River. Related, led by Chairman Stephen Ross and Chief Executive Officer Jeff Blau, is working with partner Oxford Properties Group to put up residential towers and two other office buildings, including a 1,296 foot-tall high-rise in which Wells Fargo & Co. and KKR & Co.
Brookfield Property Partners LP, a New York-based developer, is building 3.8 million square feet of office space in its Manhattan West development next to Related's site, plus a 62-story apartment building. And two other builders—Tishman Speyer Properties LP and Rockrose Development Corp.—have acquired nearby properties that could add a combined 2 million square feet of mixed-use space to the neighborhood.
One day, the area may resemble the watercolor renderings in builders’ pitch books, with office dwellers in slim-cut suits (no ties) strolling across leafy plazas and into gleaming buildings. Last year, the Metropolitan Transit Authority opened an airy new subway station just north of the project, directly connecting the area with Times Square, Grand Central Terminal, and Queens. To the south, the project connects with the High Line, a public park built on an elevated rail spur that threads its way from Hudson Yards all the way to the new Whitney Museum at its southern terminus, in Greenwich Village.
A diverse collection of fine restaurants can help brand a building, a block, or an entire neighborhood. In the meantime, they can also help prospective corporate tenants envision the construction site as a place where clients can be entertained, and where battalions of cube-dwellers can grab lunch. The potential flow of those white-collar employees lets retailers such as Neiman Marcus imagine them as shoppers, passing display windows every day as they shuttle to and from work.
Twenty years ago, the idea that success for a 17-million-square feet mixed-use project may depend on bringing in the right mix of restaurants would have a made a developer choke on her Cinnabon. In 2003, when Related opened the Time Warner Center opposite Central Park, it struggled to get the dining component off the ground. “I tried desperately to get Danny Meyer to come to Time Warner Center,” says Himmel. “He didn’t want to come off the street.”
Two high-profile chefs who did sign on for that project never opened their doors. Restaurant groups lacked the sophistication to manage multiple restaurants at the highest end, and many chefs considered the idea of leaving their traditional stand-alone venues déclassé.
“They call it vertical retail,'' Jean-Georges Vongerichten, who had a short-lived steakhouse at Time Warner Center, told New York magazine. ''I call it a mall.”
Much has changed since then. TV turned chefs into celebrities, and Las Vegas casinos opened their checkbooks for top-tier names, turning restaurants into global luxury brands. In 2012, Related bought a stake in Union Square Events, the catering arm of Meyer’s empire. In 2019, Related hopes to open a cocktail lounge on the 75th floor observation tower at 30 Hudson Yards. The once-recalcitrant Meyer will be in charge of food and beverages, said Himmel. (Lindquist, Meyer's spokeswoman, said the two sides haven't inked a deal.)
On the landlord side of the equation, building operators have grappled with lower consumer demand, the rise of e-commerce, and an oversupply of shopping centers. In cities, developers began paying attention to the role restaurants have in “placemaking,'' real estate-speak for attracting people to up-and-coming neighborhoods.
“You don’t hear mall operators saying food court anymore, it’s all about the ‘dining terrace,’” said Laura Sagues, an urban retail specialist at CBRE Group Inc. “It’s no longer about bringing in a Cheesecake Factory. They want someone who is a local chef or a regional chef, and they’ll do an aggressive deal to get them because it serves as a kind of branding.”
Clark Wolf, a restaurant consultant-based in New York, put it more bluntly: “If you let real estate people believe something is a moneymaker, anything can happen.''
Himmel saw the restaurant trend coming from a long way off. In the early-1980s, he got frustrated with the lack of venues to entertain business associates near Copley Place, an upscale shopping center he was building in Boston, so he opened a steakhouse nearby called Grill 23 & Bar. (Boston magazine recently called the city's 18th best.)
Later, he built mixed-use projects in Reston, Va., and Chicago around fine dining, and reeled in ultra-high-end eateries to the Time Warner Center, including two of New York City's handful of Michelin three-stars: Masa, at which dinner is $595 (and a late cancellation is $200), and Keller’s Per Se, which charges $325 for a single seating. Needless to say, diners with cash to spare are drawn to these destinations, but they must first pass through what is essentially a luxury shopping mall.
For the Shops at Hudson Yards, Himmel and Keller decided they wanted formal restaurants in a variety of styles: a Japanese restaurant, a steakhouse, an Italian place, a tapas joint, and so on. There would be something for everyone, and the chefs wouldn’t have to compete directly. Both men said they want world class-chefs doing accessible fare, though accessibility is a phrase best defined by whoever is picking up the check.
So how do you get top-rated kitchen talent to come to a mall? Keller pitched tapas master Andrés after a 10th anniversary dinner at the legendary Chicago restaurant Alinea. As the chefs in attendance caught a breath of fresh air on a nearby stoop, Keller pounced. For others, he worked the phones or e-mail, talking up the advantages of Hudson Yards, including shared infrastructure and millions of affluent office workers, condo owners, and shoppers passing through each year. Not to mention the prestige of being part of the latest addition to the world's most famous skyline. “Chefs get approached all the time by developers,” said Keller. “But to have a chef talk to you about a project like this is somewhat unique.”
Related wants chefs who can muster millions of dollars to build out their space, as well as organizations experienced with operating restaurants globally. There are currently about a dozen restaurants in the running for the open spots; Himmel has also been auditioning restaurants for mall projects in Dubai and Santa Clara, Calif.
“I work out every morning for an hour and a half so I can eat every night,” Himmel said. “It’s a terrible assignment, but someone has to do it.”