Taking a Hit Neighborhood Construction Projects Are Causing Restaurants to Suffer

By McCart, Melissa | Pittsburgh Post-Gazette (Pittsburgh, PA), June 8, 2014 | Go to article overview

Taking a Hit Neighborhood Construction Projects Are Causing Restaurants to Suffer


McCart, Melissa, Pittsburgh Post-Gazette (Pittsburgh, PA)


With many restaurants operating on razor-thin profit margins, being on the fault line of local construction projects - especially those that stretch over years - can be a major blow to their bottom lines. Some local restaurants are reporting drops in business of up to 40 percent - and a few have even closed - as they lose customers to a growing list of restaurants where parking is easier, traffic is lighter, noise pollution is minimal and debris is hardly an issue.

As restaurants swallow losses, community groups and developers are in various stages of acknowledging or addressing how much the work hurts surrounding businesses in the short term.

In other cities, restaurants and shops can apply for loans and are considered for tax relief. Yet Pittsburgh does not have plans that would help businesses taking a hit. In Washington, D.C., for example, business owners in the U Street neighborhood were eligible for no-interest D.C. Department of Small and Local Business Development loans during a streetscape rehabilitation project in 2012-13.

"The city has plenty of small business loans, including several that can benefit restaurants that may be renovating or relocating, but nothing that would offset the financial strain of construction," said Daniel Gilman, councilman for the 8th District. "It's an idea that I'd seriously consider."

Smallman Street construction

The midday-crowd at Lidia's has thinned as construction takes a toll. A financial backer of the restaurant, Walnut Capital, is also behind the demolition and construction next door that started in April to create a 160-room Hilton Homewood Suites Hotel. It is scheduled to open in June 2015.

Construction has "definitely had an effect on business," said Adam Greiner, general manager of Lidia's.

The restaurant is considering offering lunch-time valet service to ease parking issues for customers.

"As their landlord, we're happy to say that Lidia's renewed the lease in January, and that she [Lidia Bastianich] is committed to Pittsburgh," said Gregg Perelman, managing partner of Walnut Capital.

Ms. Bastianich has four New York restaurants and one in Kansas City. The chef, TV host and cookbook author is also the founder and president of Tavola Productions.

Mr. Perelman said Walnut Capital has boosted marketing efforts for Lidia's during construction, including signs along Smallman and extra promotion elsewhere and on social media.

"We have good rapport with the landlord and the construction crew," said Mr. Greiner, noting that work stops at the dinner hour and, at lunch time, workers head to projects on the far end, away from the restaurant.

The restaurant that's been open since 2001 will make cosmetic changes in time for the hotel debut.

"It gives everyone the opportunity to refresh before the hotel opens next door, which will provide major opportunity for them," Mr. Perelman said.

As the summer wears on, restaurants may take more of a hit as people flock to outdoor dining, leave town on vacation or take advantage of the bounty of the growing season to eat at home.

Yet Lidia's remains focused on the long term. Mr. Greiner cited an era when after-work in the Strip meant late-night clubs rather than hotels, restaurants and shopping.

"We're looking forward to having good neighbors," he said.

A couple of blocks away, Eleven is not yet seeing an effect of the Smallman Street construction, said Bill Fuller, corporate chef of Big Burrito. But he fears the effect of a second project slated to begin within the month, the Schreiber Real Estate's 59-unit apartment complex named 1100 Smallman, that will take at least a year to build. "If there's going to be construction on both sides of us, that's going to be a mess," he said.

He cited last year's work on the South Highland Avenue Bridge and its effects on Casbah, another Big Burrito restaurant, during the eight-month project. …

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