It’s a tenuous time to be a restaurant owner in Ballston. Restaurant closings have become a common occurrence, and even those with stellar reputations are not immune—as evidenced by last week’s announcement that Willow, the widely acclaimed restaurant owned by chefs Tracy O’Grady and Kate Jansen, will close its doors on Sept. 19. The news comes on the heels of three other restaurants that shuttered this summer, and more last year.
In case you’re counting, the last 15 months in Ballston have seen the shuttering of Matsutake Steak and Sushi, Protein Bar, Pizza Vinoteca, Ted’s Montana Grill and Vapiano.
County and business leaders say the pattern is simply a sign of growing pains as Ballston makes the transition from suburban outpost to urban destination—with the higher rents and steeper competition that come with redevelopment.
For his part, Willow operations chief Brian Wolken said he was unable to negotiate a new 10-year lease that was economically feasible.
Operators like Wolken lament that area landlords are increasing rents, even in the face of rising office vacancy rates that are eroding the customer base restaurants rely on to survive. According to the real estate data company CoStar, which tracks economic indicators for Arlington Economic Development, Ballston’s vacancy rate was 18.3 percent in the second quarter of 2015, up from 15.3 percent the previous year.
That’s still better than vacancy rates in Crystal City (23 percent) and Rosslyn (28.5 percent), but worse than those of Clarendon/Courthouse (16.8 percent) and Virginia Square (8.7 percent), according to CoStar data.
“It’s a very tough market right now,” Wolken says. “Everyone is struggling.”
It’s a common refrain. When Pizza Vinoteca closed in June, its owner, Ari Malcom, said through a spokeswoman that there wasn’t enough business to sustain the rent.
Marc McCauley, director of Arlington Economic Development’s real-estate development group, attributes the turnover, in part, to Ballston’s increasing emphasis on chef-driven restaurants—an overt branding strategy meant to position the area as a dining destination. “[The chain restaurants that closed] are places you can get anywhere,” McCauley says. “In a highly competitive market, you’ve got to have a great concept.”
No one knows that better than developer Kevin Shooshan. His company hired restaurant and retail guru John Asadoorian (whose clients include DGS Delicatessen, Georgetown Cupcake and Rappahannock Oysters) to attract top-notch eateries to its newly-built Liberty Center, a complex of buildings that straddles Wilson Boulevard between Randolph and Quincy streets.
“We look at retail as a way to differentiate a project and make it attractive,” says Shooshan, who oversees the Shooshan Company’s leasing and marketing operations.
Shooshan acknowledges that Ballston is not yet the destination that Clarendon is, but he’s hoping that will change with a restaurant mix that now includes celebrity chef Mike Isabella’s Kapnos Taverna, Pepita and Yona; Neighborhood Restaurant Group’s Rustico and Buzz Bakery; and the fast-casual spots Sweetgreen and Taylor Gourmet.
Ballston’s impending mall makeover, set for completion by 2018, will only sweeten the neighborhood’s appeal, Shooshan says. “That, to me, will really shift Ballston from a couple nodes of places that do well to a major destination.”
For now, real estate prices suggest that the transformation (or at least the promise of it) is well underway. Commercial rents are nearly comparable to those found in certain parts of D.C., says Isabella, who celebrated his three new restaurants at Liberty Center by hosting a block party on Saturday. “But you are five minutes away from D.C.,” he says.
The former Top Chef contender attributes his success to unique concepts, such as those behind his Greek-inspired Kapnos, the Mexican-cantina Pepita, and the Japanese ramen-focused Yona. By comparison, American and Italian menus “are things you have multiples of,” he says, so it’s easier for those kinds of restaurants to get lost in the crowd.
Robert Wiedmaier, the powerhouse toque behind Marcel’s and Brasserie Beck in D.C., has held fast at 800 Glebe Road with his Belgian-themed Mussel Bar & Grille—even as neighboring restaurants on the same block have met their demise.
Wiedmaier says restaurants have to be careful in negotiating lease deals, adding that it’s tough to find good service staff in the local market—two factors that can quickly lead a restaurant to lose its footing.
“It comes down to four things,” he says. “Great service; great food; perception of value; and great customer service. If you can do those four things, people will come.”
Ballston’s location, he says, is an asset. “The density is there. The people are there. There’s residential, there’s foot traffic, there’s young people with families. I think it’s a great place to have a restaurant.”
According to the Ballston BID, 75 percent of Ballston residents are under 45, and the average household income is $125,000. Ballston BID chief Tina Leone touts those demographics to prospective restaurateurs, and will begin a retail analysis this fall “to help property owners make long-term decisions about being sustainable,” she says. “With the mall coming on, we want to be proactive in helping our retailers around the rest of our district.”
To date, the BID has already helped lure several new restaurant tenants to Ballston, where many of the office buildings have street-level spaces that are either awkwardly sized or too big.
As the winner of the BID’s Restaurant Challenge last year, Spanish restaurant SER was the beneficiary of an 11-year lease at 1110 Glebe Road—a deal that included the first year rent-free, and the remaining years at rent below market rate. SER proprietors Josu Zubikarai and Javier Candon also received an interest-free, $245,000-loan. “That’s a challenging restaurant space, and the property owner acknowledged it,” Leone says of the building, which sits north of Fairfax Drive near the on-ramp to I-66.
Next on Leone’s agenda: Willow. “It’s a real personal and professional blow,” she says, to see such respected establishment close.
Perhaps it’s not goodbye. Leone says she hopes to connect Willow owners Tracy O’Grady and Kate Jansen with other Ballston property owners in an attempt to keep the chefs (and their cult following) in the neighborhood.
“We’d be real pleased to see [O’Grady] move into a new space, and have a new concept, perhaps,” Leone says. “It’s heart-breaking right now. We’ll do everything we can to help her, and hopefully she’ll decide to reopen here in Ballston.”