Pedestrians walk on Union Street past the former Walter’s restaurant, one of several that closed this year. Staff photos by Derek Davis

When Guy and Stella Hernandez opened Bar Lola in 2006, the Portland restaurant landscape was already fermenting and creating fresh excitement about eating in the city. That was the same year Vignola and Hot Suppa opened. Duckfat and The Front Room had opened the year before, and in 2007, the city would welcome Miyake and the Green Elephant.

“Portland was undergoing a little restaurant boom,” Guy Hernandez recalls, “and people were already saying that there were too many restaurants in the city.”

Things haven’t changed much in the past 13 years. Every year, it seems, locals have worried about a pending “restaurant bubble” that, when it bursts, will result in restaurants and bars furiously closing their doors like a stack of dominoes. This year was particularly troubling to city residents who saw a lot of favorites close – places like Silly’s, Lolita, Walter’s, Vignola Cinque Terre, Local Sprouts Cafe, the Irish pub Brian Boru and Andy’s Old Port Pub. And yet, roughly twice as many other restaurants and bars have opened to take their place. This was the year we welcomed Flood’s, Gross Confection Bar, CBG, Other Side Diner, Royale Lunch Bar, Maiz, Bird & Co, two cider houses, a whiskey bar, a cocktail bar and several smaller eateries.

If there is a bubble, it doesn’t seem to have burst yet. The number of new restaurants opening is at least replacing the number that has closed. According to city licensing records, Portland had 173 restaurants and bars in July 2018; as of November, that number had risen slightly to 176, which includes eight pending licenses.

The closings have been blamed on everything from bad management and too much competition to plain old exhaustion. Is a wave of more closings on the horizon?

Michelle Corry, co-owner of Five Fifty-Five and Petite Jacqueline in Portland, is one who thinks the city has become too saturated with restaurants. “To be honest, I think it’s only a matter of time before the ceiling falls,” she said.

Overall, fewer places have been opening in the past five years, she said, and she thinks that trend will continue in the coming months, while more places close. Food costs are going up, the minimum wage has increased, and a shortage of workers is driving up labor costs, she said. “You would be shocked by how many restaurants are barely getting by,” she said. “There are a lot that are breaking even, or just getting by.”

Pliny and Melanie Reynolds, owners of Terlingua restaurant, pose for a portrait in the window of their future space, the former Silly’s restaurant, on Washington Avenue.

But not everyone agrees. Pliny Reynolds, who is taking over the old Silly’s location so he can expand his Latin barbecue restaurant Terlingua, now located down the street, said it seems as if the city is “looking at more growth than anything else,” noting that there should be four new restaurants on inner Washington Avenue by next June – the new Terlingua, cider and tapas bar Anoche (which opened last week), ramen shop Ishi Ishi and a new venture from Chad Conley, owner of modern Jewish deli Rose Foods.

“It seems to me that the goal post is getting pushed further back,” he said. “Everybody is talking about restaurant bubbles, but they seem to be false alarms. I can’t speak for other businesses in other parts of town, but obviously Washington Avenue is thriving and experiencing a renaissance.”

Steve Wiley, a 69-year-old retired schoolteacher who lives in Portland and dines out two to three times a month with his wife and their friends, thinks it’s all a matter of perspective and percentages.  “When the Pagoda closed in the 1980s, that seemed like a big deal because there weren’t as many restaurants then,” he said.

Wiley, who grew up eating at the Sportsman’s Grill but now considers Emilitsa his favorite restaurant, likes the turnover in Portland’s restaurant scene and trusts the marketplace to sort it all out. The Wileys enjoyed eating at Espo’s Trattoria, for example, when they didn’t feel like cooking dinner at home. That restaurant has now closed, “but Maria’s is going in there, and that’s good,” Wiley said.

“I think it’s an opportunity for new restaurants to come in, and those may excite people – different tastes, different foods,” he said. “I hate to see anyone lose money, lose their jobs, but it always seems like more restaurants come in.”

What’s happened in Portland in many ways mirrors what’s going on in the rest of the country. But the ultimate outcome – continued boom, or bust – may be different here.

Kevin Alexander, author of the new book “Burn the Ice: The American Culinary Revolution and Its End,” said Portland is “a super-charged example” of the restaurant revolution that began in the other Portland around 2006. Portland, Oregon, he said, birthed the model of the independent, chef-owned restaurant filled with reclaimed wood and Edison bulbs and offering farm-to-table food and craft cocktail menus. These were no-frills spaces, often serving fast-casual style, that nevertheless cared about their food and challenged diners with their menus. Chefs who were tired of waiting 20 years to open their own restaurant in big cities like San Francisco or New York could now “jump the line” by moving to smaller cities where they could build their own place, pay cheaper rent and take more chances in the kitchen.

This template soon started spreading around the country, aided by the rise of social media, television food shows ranging from competitions such as “Top Chef” to the more thoughtful explorations of Anthony Bourdain and online sites such as Serious Eats and Tasting Table. “You got this 24-7 food coverage,” Alexander said, “and those places wanted to champion smaller, cooler spots, so it was like one thing feeding the other.”

There are 100,000 more restaurants in America than there were 10 years ago, according to Alexander, who has visited Portland, Maine, every year or two since he was in college. He calls the explosion of restaurants here “incredible.”

“It’s not surprising,” he said, “but what’s more unique about it is the density (of restaurants) with the smaller population, and how welcoming to such a variety of palates it is. It doesn’t always work like that, and I think that’s sort of special for Portland.”

The density and diversity of restaurants was also cited by Andrew Knowlton, editor-at-large at Bon Appetit when the magazine named Portland its 2018 Restaurant City of the Year. And it’s the thing that Portland resident Eric Gunnoe and his wife love most about the city’s restaurant boom. The Gunnoes make it a point to dine only at immigrant-owned restaurants, and over the years, they have sampled Salvadoran, Eritrean, Vietnamese and Middle Eastern cuisine, among others. “We pick the ones that are struggling the most,” Gunnoe said, “and then try to go there and give them a boost.”

Their current favorite is the Shawarma and Kebab House on Forest Avenue, owned by a couple from Iraq and Syria. Gunnoe loves the food, saying everything there is fresh and made to order.

“I think this is the new permanent state, and I’m happy to say that,” he said. “I’m sure some of the new high-end restaurants will come and go, but as far as diversity, I’m sure this is the future.”

Lolita restaurant on Munjoy Hill had one of its busiest summers before closing this year so the owners could spend more time with their son. Derek Davis/Staff Photographer Buy this Photo

The future of the overall restaurant scene is perhaps less certain. The city now appears to be growing as quickly as its hunger for good food. New residents are occupying the housing that restaurant workers can no longer afford. Restaurateurs are struggling to keep up with rising rents and to hire qualified workers at newly mandated minimum wages, because the same Mainers who complain about their favorite places closing also want restaurant employees to be paid well.

“With more restaurants opening, there’s more people looking for the same talent pool,” Corry said. “It drives up overtime, which is a huge expense over your straight hourly.”

Jay Villani, owner of Salvage BBQ, Local 188 and Black Cow, all in Portland, agrees that a lot of places are feeling the pinch, but that’s not the only reason restaurants are closing. Restaurants are finite, he said. “They take a toll on people, and sometimes they close. It happens. I remember when the first wave, like The Good Egg and Bella Bella, were the old throwbacks. People had the same reaction then.”

Villani knows firsthand how much hard work goes into keeping a restaurant open. He said that 10 years ago he was serving twice the number of customers he is now. “I was one of two restaurants in (Longfellow Square). Now there’s six or seven of us,” he said.

Most restaurants operate with an average profit margin of 3 to 5 percent, so there’s not a lot of wiggle room to accommodate rising rents, labor and food costs. Villani said his personal goal is to end the year with a 10 percent profit margin, and he has “come home maybe twice at 8 percent” in recent years. More usual is an average of 5 percent.

“That’s why I have several establishments,” he said. “That’s why you see restaurants opening at several locations. Everyone thinks you’re rolling in it, and that’s not the case.”

Jason Loring, co-owner of Nosh, Slab and the new CBG – which took the place of the old Congress Bar & Grill this year – empathizes in many ways with those who mourn lost restaurants but agrees with Villani and others who say that closures are part of the natural ebb and flow of the restaurant industry. “The thing that everybody’s ignoring,” Loring said, “is that all these places are closing for different reasons.”

He noted that Rhum, the tiki bar he opened with Michael Fraser, his business partner in CBG, closed last year not because of too much competition but because of the combination of a bad location and too much debt. “Nobody understands the amount of debt that goes on in a restaurant, then how little profit” comes out of it, Loring said.

Loring boils down all the bubble talk to this: “Nobody likes change.”

Loring and Fraser have done their part to save some of the old favorites in the past few years. Fraser reopened the Bramhall pub and the Italian restaurant above it, The Roma. Loring and Fraser together reimagined Congress Bar & Grill, keeping it open but making needed changes. They’ve already gotten some blowback from fans of the old place who complain that the old $8 cheeseburger now costs $14. In addition to paying their employees what they consider a living wage, Loring and Fraser have tried to upgrade the quality of the food, including the beef in those burgers – and that means charging more.

“You can’t have it all,” Fraser said. “You can’t want to pay people $15 to $18 an hour but then complain that your cheeseburger costs too much. There’s a balance there.”

Loring has always believed that competition can be a good thing, forcing everyone to be better and weeding out the restaurants that have an inferior product or service. He said he constantly worries about keeping Nosh current: “Is it going to change with the times? Is it going to turn into some dead dinosaur one day?”

Adapt or die, as Alexander puts it. Holding on to nostalgia when rents and labor costs are rising, and at a time when Americans’ tastes are changing, can be the death knell for older restaurants.

Increased competition in a saturated market also means losing regular customers – the lifeblood of a restaurant – to, as Villani calls it, “the shiny new thing.” When Portland was named Restaurant City of the Year, restaurateurs noticed that diners were coming in with checklists to make sure they hit every spot mentioned in the Bon Appetit article. “That’s how Americans dine now,” Alexander said. “There’s that list mentality.”

Count the Wileys among the diners whose habits have changed since being confronted with so many more choices. “We love Emilitsa,” Steve Wiley said, “but we would like to try some of these other places.”

The couple have also embraced the trend in smaller plates. Sometimes they visit two or more restaurants in one night, ordering just appetizers everywhere they go. They call it an “app-about.”

“It’s wonderful in the summertime, because there’s so many restaurants we can walk to,” he said.

Competition keeps restaurants “on your toes,” Corry said. “Maybe (restaurants) were doing fine, but fine’s not going to work anymore. They have to change and grow.”

The Corrys have responded to competition by offering private party bookings, more staff training, changes to the food menu (including launching a three-course “pre-theater menu”), and changes to the bar menu and happy hour. They hired a marketing person to help with social media. They’ve started catering to vegans, vegetarians and people with food allergies.

Not all of the competition comes from other restaurants. Fraser and others note that the food landscape has changed with the introduction of so many craft breweries. It used to be that if someone wanted to try local beer, they would go to a bar. Now they make the rounds of local breweries instead, “and that hurts the bar business,” Fraser said. “That’s a fact.”

There’s often a food truck or two parked at the breweries as well, which also eats into restaurant profits.

Dan Steele, the former owner of Brian Boru, thinks craft brewers have their own crowded field that will be weeded out one day by too much competition and waning public interest. “The big dogs, like the Bissell Brothers, might be the survivors,” he said, “but I think you’ll see some correction in that market.”

Several restaurant and bar owners who have called it quits have cited their desire for a better work-life balance. After so many years toiling in the industry, they are simply tired and want to do something else, or spend more time with family. When Walter’s closed in May, Cheryl Buerhaus said that the demands of the business had become too much for her and her husband, chef Jeff Buerhaus, as they got older, and they wanted to spend more time with their children and grandchildren. The owners of Andy’s Old Port Pub cited several issues, including staffing and exhaustion. Stella Hernandez said that Lolita was having its busiest summer ever when she and her husband decided to close in September so they could slow down and spend more time with their son.

“I think your heart has to be in the game,” said Anne Rutherford, who closed Grace on Chestnut Street at the end of last year. “I think that’s what makes it exciting and invigorating. I wasn’t there anymore.”

Rutherford said her chef was looking to move, and after 10 years in business, “we had nothing new and innovative left to give.” She now prefers her restaurant in the Portland suburbs – Foreside Tavern, a more casual neighborhood restaurant frequented by bread-and-butter locals who are not just checking the place off a list of restaurants to try. “You’re not competing for tourists, and you’re not competing for accolades,” she said. “I work a lot less there.”

Others have closed their businesses because the hot real estate market has made selling the buildings they were in a no-brainer. That’s what happened with Steele, who also cited rising costs in a “highly competitive” environment as a reason for closure. When a “highly motivated buyer” came along, he couldn’t resist.

A look through the window of the empty former Silly’s restaurant on Washington Avenue, where nearby Terlingua is relocating.

Colleen Kelley, former owner of Silly’s, also sold her building. Kelley declined to be interviewed but said in an email that “my biggest reason for leaving is doing business with the city of Portland. The city of Portland government wore me out with stupidity and lack of vision.” She did not elaborate.

How do you know when there’s a bubble that’s ripe for bursting? Some of the warning signs, Alexander said, include the public grumblings about longtime favorites closing and complaints that smaller, restaurant-rich cities like Portland are becoming “foodie tourism playgrounds to be exploited for their riches and left.” The restaurants themselves, he said, start cutting corners. Chefs stop being creative with their menus, or have to reduce the size of their menus. And there’s the beginning of what he calls “luxury creep.”

If a recession is near, Alexander said, the canary in the coal mine is seeing more upscale restaurants with expensive tasting menus opening up. “When costs get so much that you have to pull in investors, they can’t all agree on a menu,” he said. “Everyone just agrees to do upscale French because they all understand it.”

That’s what happened when the recession hit in 2008, he said. “When you start seeing all these cutting corners moves and you also see this creep in luxury, that’s when I really start to worry because it means that people are trying to make back their costs however they can.”

Portland may be in a better position, however, because so many restaurateurs have started opening places in the less-crowded suburbs – think Tipo in the Back Cove neighborhood or Woodford F&B – and nearby communities such as Biddeford. It’s like opening a steam valve that releases some of the pressure on everyone else.

“I would take that as a good sign,” Alexander said. “When you’ve got spaces cheap enough for industry people to live in, cool projects will happen in them.”

But things are unlikely to go back to the way they were in those heady days when young, ambitious chefs held the reins and followed their vision. Guy Hernandez notes that the cost of opening a restaurant here has increased significantly. “Fifteen years ago, you could open in a space your friends painted with equipment you bought out of Uncle Henry’s and a crew of like-minded mates,” he said. “It was more like the Wild West, with pop-ups and small projects opening all the time.”

It’s easier now, though, to find investors to back a project, Fraser said. “People have made money in the market; they’re a little afraid of the market, potentially, and they want to diversify a little bit,” he said. “The restaurant thing is sexy for investors, so you can find investors who will throw a little money at someone. And the cost of entry in Portland for restaurants is a lot less than it is in Boston and New York and places like that.”

So, as long as the economy doesn’t tank, it’s likely restaurants will continue to open.

“I think once genies are let out of the bottle, they’re hard to put back in,” Villani said. “Restaurants are going to be built in this town. I mean, that’s our raison d’etre now. We’re a restaurant town. Restaurants are going to open, and they’re going to close.”


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