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Rent, Regulations Are Putting Fine NYC Restaurants Out Of Business, Owners Say

NEW YORK (CBSNewYork) -- In what some restaurants are calling a troubling trend, upscale eateries are caving to costs in fear of closing their doors in a city known for fine dining.

As CBS2's Jessica Layton reported, the trend means you might soon be seeing more restaurant space for rent.

The New York City restaurant scene is one of the richest in the world, but industry insiders said they are seeing way to many "space for lease" signs where high-end eateries are being forced to close in traditional Manhattan hot spots.

"It is not a pretty picture," said restaurant owner Leith Hill.

Hill has owned Ellary's Greens in the West Village for four years, and said regulations and rent in the city are strangling independent restaurant owners.

"The city makes it impossible," she said. "I think the restaurant industry is at a crisis."

Food halls and popups that are cheaper to run are in demand as longtime fine dining establishments close their doors.

"It's very humbling," said Ahmass Fakahany,

Fakahany knows firsthand, after closing a high-end steakhouse in SoHo.

"Just this year, there's been three restaurants that are Michelin star level that have closed," Fakahany said.

"Right around tax time is when you see everyone folding up and closing down," said restaurant owner Alex Rajj.

The New York City Hospitality Alliance said it has been relaying these concerns to the de Blasio Administration for three years. And now more than ever, the alliance said it needs City Hall to take action.

The alliance is pushing for the city to give restaurants the option to add an administrative fee to their menus to pay for the rising minimum wage and put money in the pockets of kitchen workers – who by law cannot split tips with servers.

The Mayor's office said it has "yet to hear how this fee on consumers would find its way to employees," adding. "The restaurant industry overall in New York City has never been stronger."

But people like Hill said their livelihoods are in limbo.

"The cost of doing business here is just too high," she said.

The Hospitality Alliance could not provide exact numbers on how many restaurants have recently closed. But one owner who spoke to CBS2 counted 59 in 2016 and 18 already this year.

Despite this, the city said the total number of food and beverage permits are up by almost 200 over last year.

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