Sunday, June 04, 2006

Bringing business to the restaurant business.

"Fewer and fewer chefs, it seems, strive to be the single-restaurant artist-monk."

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June 4, 2006
Style
The Secret Ingredient

By MICHAEL RUHLMAN

Over the past few years, Terrance Brennan, the chef and owner of Picholine, has been slowly expanding his portfolio, first opening Artisanal Fromagerie and Bistro and more recently the retail business Artisanal Premium Cheese. Like many chefs who are thinking big, Brennan has lots of ideas about what to do next but neither the time nor the connections to put them in place, so he hired the one man who he felt could: Adam Block. He said he hoped that Block, the deal maker who helped create the template for the celebrity-chef contract that transformed Las Vegas into a dining oasis and brought Thomas Keller, the chef and owner of the French Laundry in Yountville, Calif., to New York, could tell him what to do. Not that Brennan is used to being told what to do.

The two met earlier this spring in Brennan's office, far from any kitchen. Brennan, dressed in a pinstripe suit, had just returned from Chicago, where he was considering opening more bistros. Block started by conveying the, well, infelicity of this move (with new clients, he said, "a little bit of an education" is required) and to impress upon Brennan the importance of establishing a "core brand" in New York. Block said he believed that Brennan could open four bistros in the city without "cannibalizing" himself, and noted that five was the magic number that could bring buyout money, serious cash. The tricky part, Block said, "is how to grow something that represents the philosophy and the product, and how to do it without compromising too much." He paused for emphasis and warned Brennan: "It's hard to be all things to all people, as you once were. What you're creating is an iteration of the original. With growth, something is always compromised."

Brennan absorbed the information poker-faced. By the end of the meeting, he was swayed, although not convinced. As star chefs proliferate in the $500-billion-a-year restaurant industry, more and more of them need the business acumen of someone like Block to bring their work to the masses. Although not well known even within the food world, Block is influencing the shape of name-brand dining in this country.

Born in Chicago, Block, 46, began his restaurant career 20 years ago as a consultant — reviewing operational overviews, finances, concepts and check averages and suggesting ways restaurants could be more profitable — in the San Francisco Bay Area. In the early 1990's, as chefs rose to new heights, he stepped in to help them leverage their fame into lucrative contracts. Through the word of mouth that followed extraordinary deals for marquee chefs, Block has fashioned a career that resembles star-athlete management. While his job description seems to be continuously evolving, his main role remains that of an agent who can fit talent with golden opportunity, the alchemist who can help chefs make big money.

Beginning in 1992 with Paul Bertolli, the former Chez Panisse chef, (Block helped negotiate a partnership with the stagnant restaurant Oliveto, to which Bertolli would bring prosperity and national acclaim), he went on to work with such culinary lights as Alice Waters, Jean-Louis Palladin, Laurent Gras, Guenter Seeger and Eric Ripert. He negotiated the first celebrity-chef management contract in 1994, a deal with the MGM Grand in Las Vegas that gave the chef Charlie Trotter a free restaurant, a six-figure signing bonus and a percentage of sales or commensurate salary for the next 10 years (even if the restaurant closed, which it did after 15 months), a financial windfall for Trotter. All of this was unheard of in an industry where a chef who earned $150,000 a year was doing well.

This was the first deal in Las Vegas in which the chef had no ownership in a restaurant with his brand name on it, perhaps the first one conceived not to turn a profit but rather as an amenity for high rollers. "I was pulling numbers out of the air," Block admits now. Nevertheless, it provided a formula for chefs and hoteliers and the impending Las Vegas chef bonanza.

In today's restaurant-management contracts, a marquee chef is typically paid 3 to 5 percent of sales in return for opening the restaurant and spending as little as two weeks a year there; in Las Vegas, such a restaurant brings in between $10 million and $18 million annually, netting the chef between $300,000 and $900,000, an enticing secondary income, with the promise of a percentage of the profits if the restaurant succeeds.

Block's current projects have taken him around the world — from London (meeting with Terence Conran) to Bora Bora (with Trotter to consider the St. Regis Hotel there) to Singapore (he's marshaling an international group of celebrity chefs for a new hotel project) to his backyard, north of Oakland (where he negotiated Bertolli's exit contract from Oliveto), after which he returned to New York to help open a restaurant at the Carlton Hotel and explore other available real estate for Geoffrey Zakarian, the chef of Town, and the restaurateur Jonathan Morr.

Block raises the act of taking a meeting to athletic proportions — crunching numbers, reading contracts as others talk and arguing his points, sometimes it seems all at once — but with Brennan, Block was subdued, finessing the chef, getting a sense not of his business goals but of how these goals fitted into Brennan's life as a whole.

Brennan was anxious to get something started. "I'm most happy when I'm building something," he told Block. Noting that bad deals are simple to pull together, Block told Brennan: "One of my main jobs is to keep my clients from making mistakes. It's really hard to do a good deal."

"Terrance is in the infancy of his brand," Block told me later, adding that he liked the intelligence of Brennan's focus: his bistro — a simple concept that can be efficiently duplicated or, in industry jargon, rolled out — and a good retail product: hand-made cheese. Brennan "needs to build his core in New York first," he went on to say, "because of the economies of scale there, and he understands the market and people know him."

Block knows the New York market well. He was the prime mover of one of the highest-profile restaurant conglomerations in recent memory, the Time Warner Restaurant Collection, negotiating the deals of four of the original five restaurants with the co-developer, the Related Companies.

At first, Block dismissed the Time Warner Center out of hand for a client, the New York chef Gray Kunz, because it lacked street access, but when Thomas Keller — also a client at the time — asked Block to consider it, Block realized that if he could finesse the right kind of deal for the chef-owner of the French Laundry, it could be worth Keller's while, not to mention make him the linchpin restaurateur for the developer.

With Keller attached, the project became appealing to other big-draw chefs. Block asked Keller whom he wanted in the center. He said Masa Takayama, the country's best-known sushi chef. Thus Block not only became Takayama's negotiator but also helped raise money, hired a design team and, in the middle of construction, secured a collateral-free bank loan for what would become the four-star restaurant Masa. (The chef pays off the balance of Block's fee shrewdly: in meals.) With Keller and Takayama in the group, as well as Jean-Georges Vongerichten (who was brought in by the Related Companies), Block said he felt it was now feasible to bring in Trotter and Kunz, who'd been in the culinary desert for years after leaving Lespinasse.

"He'll customize the needs or desires of the chef with what the circumstances are," Trotter said. "He'll mesh the two together. It's really incredible. He works on everything from making a deal happen to arranging for financing if that's desired. There's no one who does exactly what he does."

Professionally, Adam Block is a one-man band. He recently bought a two-bedroom apartment in Chelsea but does not have a New York office. He logs more than 200,000 miles a year on airplanes. He's a knot of contradictions: a pugnacious negotiator who wears his heart on his sleeve; a behind-the-scenes operator who heretofore shunned the press yet is starved for acknowledgment of his successes.

"Everyone has a gift," Block told me. "And my gift is my ability to be able to read how people think on both sides of the table." His clients are sometimes hotel operators who want chefs and sometimes chefs who want restaurant deals. "I'm not speculating, I'm telling you the way it is," he says, adding, "I know how far I can push each side when I'm negotiating."

But it's exactly this advantage that has compromised the confidence of some of his clients — most important, Keller. (Full disclosure: I worked closely with Keller on his two cookbooks.) In 2005, after six years as a member of Keller's inner circle of advisers and as a personal friend, Block was out. Questions had been raised about how well he represented Keller's interests in Bouchon Las Vegas and in Per Se. Block remains bitter about the divorce.

The suggestion that he had a conflict of interest — Block worked for both Keller and the Venetian Hotel, an owner of Keller's Bouchon — is especially frustrating for Block. "They can't have it both ways," he says. "They can't get the benefits of my relationships and doing deals for them that they want, through the relationships I have, and then complain that I have these relationships."

The break with Keller, friction with other high-profile chefs and the termination of Charlie Trotter's restaurant project in the Time Warner Center due to disagreements between the chef and the developer have left him disenchanted both with his role as middleman between developer and celebrity chef and with his income. This is why he has recently become a partner with a chef in opening a restaurant.

Initially hired by the Carlton Hotel in New York to lure a big name to its restaurant space, Block has become an investor with Zakarian and Morr in the resulting restaurant, Country. Putting his own expertise to work for him is a way for Block to earn more than his $500-an-hour fee (he does not receive a commission on his deals, and claims to feel often like the uninvited guest after the papers are signed). Echoing his own advice to Brennan, Block is also working with Zakarian and Morr on a simple concept, opening a burger restaurant in the East Village modeled after Morr's Manhattan noodle house, Republic — the kind of restaurant they could "reiterate" in New York, Las Vegas and beyond. Their plans reflect what many successful high-end chefs are doing: simplifying their work in order to sell it to more people, creating their prêt-à-porter line.

Fewer and fewer chefs, it seems, strive to be the single-restaurant artist-monk. "I don't want to just stay in one kitchen," Zakarian said on the opening day of Country, dressed in street clothes while tasting dishes brought to him by a sous-chef. "I have way more interests than just cooking." He continued, "There are so many ways to enjoy this métier" — everything from multiple books to opening a boutique cooking school to developing kitchen products to designing kitchens for other chefs and operators.

"What I think is going to change," Block predicts, surveying the celebrity chef landscape, "is that people are going to become less and less caring about who's the chef, and more and more caring about how it is done and what the food is actually like." He thus urges his clients to create what he calls an "esoteric brand," a restaurant that is associated with the chef but that doesn't require his name on the shingle or his presence in the shop. Artisanal Fromagerie and Bistro, for instance. Brennan, education complete, decided that opening in Chicago was in fact felicitous, and he has also found real estate on Manhattan's Upper West Side for his bistro's second location.

What's on the horizon for Block may be the ultimate reflection of top chefs' simplifying their work. Robert Goldstein, the president of the Venetian Hotel in Las Vegas, has put Block in charge of developing an 18,000-square-foot food hall, inspired by markets like San Francisco's Ferry Plaza Farmer's Market, for a new Las Vegas hotel and casino, the Palazzo. Featuring high-quality food at low prices — in effect, a Slow Food court — it is scheduled to open in fall 2007.

"We're trying to combine art and commerce in a way that's never been done before," Goldstein says. "Great food on a mass scale." Goldstein says he is hoping to see, for instance, shops selling Emeril Lagasse's po' boys, Mario Batali's pizza and Thomas Keller's oysters — a challenge Block is perfectly poised to choreograph.

If the idea works in Las Vegas, Block says he hopes to replicate it throughout the country, a portentous ambition: star chefs setting up in the food courts of America's malls, with Adam Block quietly leading the way.

Michael Ruhlman is a freelance writer. His most recent book, "The Reach of a Chef," was published in May by Viking.

Copyright 2006 The New York Times Company

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