There probably isn’t a Capitol Hill restaurant bubble, right?

screen-shot-2017-02-07-at-12-43-25-pmCHS ended January reporting on “30+ Capitol Hill bars and restaurants to look forward to in 2017.” We also spent a lot of the month reporting on a wave of closures at Capitol Hill bars and restaurants — some of them more surprising than others. Meanwhile, the rest of the city also saw a small burst of shutdowns. Perhaps inspired by the shutterings, a few readers sent us this essay from the Thrillist, of all things, about the “restaurant bubble” about to burst across the country —

The American restaurant business is a bubble, and that bubble is bursting. I’ve arrived at this conclusion after spending a year traveling around the country and talking to chefs, restaurant owners, and other industry folk for this series. In part one, I talked about how the Good Food Revival Movement™ created colonies of similar, hip restaurants in cities all over the country. In the series’ second story, I discussed how a shortage of cooks — driven by a combination of the restaurant bubble, shifts in immigration, and a surge of millennials — is permanently altering the way a restaurant’s back of the house has to operate in order to survive. This, the final story, is simple: I want you to understand why America’s Golden Age of Restaurants is coming to an end.

“Rising labor costs, rent increases, a pandemic of similar restaurants, demanding customers unwilling to come to terms with higher prices…” — you can read the whole thing but the argument pretty much comes down to the list above and these two chef quotes:

  • “Too many restaurants have opened in the last two years. There are not enough skilled hospitality workers to fill all of these restaurants. This has increased the cost for quality labor.”
  • “If one guy opens a cool barbecue place and that’s successful, the next year we see five or six new cool barbecue places… We see it all the time here.”

Beyond the joys of living and hanging out in a neighborhood rich with local food and drink creators, the economic tides of Capitol Hill’s bars and restaurants are, of course, crucial to the industry workforce that has grown around Central Seattle and the city. These are our “third places” — and, for many of us, these are where we earn a paycheck.

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CHS’s yearly tallies are probably missing a name here or there, include some stretch-y borders, might include a double-count or three, and… well, you get the idea. (Source: CHS)

Many of the factors listed in Kevin Alexander’s restaurant bubble report are in play here in Seattle and on Capitol Hill. And in 2016 and the start of 2017, we may have seen a few signs of a softening if not an all-out pop.

Some 36 new restaurants, cafes, and bars made our 2016 openings roster last year but, as we noted, the period of bigger investments from the most successful Seattle restaurateurs was replaced by a time of smaller, more surgical entrepreneurial strikes. A wave of pizza joined the neighborhood — “We can make this into something that is a little more entry level that can still have my stamp when it comes to quality level,” longtime Capitol Hill chef John Sundstrom told CHS about his new 12th Ave Southpaw pizza joint. Meanwhile, Bai Tonganother “street”-branded Thai venture is coming to 12th and Pike.

There will still be massive investments in Capitol Hill food and drink in 2017. Redhook, owned by the Craft Beer Alliance, a company partly owned by Anheuser-Busch InBev, has adjusted its time target for opening its 10-barrel brewery and pub on E Pike to this summer. Global high-end cycling brand Rapha will soon bring its “clubhouse” concept to Melrose and Pine. And coffee giants Starbucks will fiddle with its premium Capitol Hill roastery recipe while the AB-InBev folks double down with an upgraded E Pike Elysian Brewery.

CHS has no idea if there is an American restaurant bubble, let alone one on Capitol Hill. But the neighborhood’s booming food and drink economy continues to shift and the smarter players  — Naka trading out caviar and gold flakes for comfort as Adana, for example — are already optimizing for what comes next.

There are also other ways to measure. January’s closing of Ernest Loves Agnes didn’t fill CHS comments with concern the way Clever Dunne’s final days did. But as far as gauging the health of the neighborhood’s food and drink economy and its resiliency against a bubble bursting, a venture from an experienced group of locals involving a significant investment lasting just over a year and calling it quits seems, well, a little bit bubbly. But even on 19th Ave E, there is a new investment lined up to give seasonal pasta and pizza — and making a profit — on the street a new try. No pressure, Contadino and Brian Clevenger.

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4 thoughts on “There probably isn’t a Capitol Hill restaurant bubble, right?

  1. The thing with any market or “bubble” is nobody knows when things have fundamentally changed. I don’t go out for the same reasons or in the same way that my parents did. I don’t think the good times are over.

  2. Ernest Loves Agnes had mediocre food and less than mediocre service. I wanted it to succeed but it suffered from issues that any mediocre restaurant must endure. Ultimately those issues brought it down. I expect the next venture in that location will be successful because it is chef driven, and most importantly, by a chef who has successfully operated other restaurants in similar neighborhoods. Good luck to them.

  3. We are in the beginning of a restaurant recession. Increasing costs (taxes, rent, wages, etc) and competition and lower economic growth in Seattle all contribute. It will continue until landlords lower rents by 25%.