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The Death of the Diner

What’s killing the cheeseburger deluxe?


Jon and Gus Tsolkas at the Happy Burger.  

One day last month, John Tsolkas stood behind the counter at the Happy Burger, the Upper West Side coffee shop he owned with his older brother Gus, taking down phone orders. Pinning the receiver between his shoulder and his ear while collecting a check and punching the cash register, Tsolkas answered, “Happy!”

But Tsolkas, who is 65, was far from happy. He and Gus had owned the Happy Burger for more than twenty years, and had been in the business since they arrived in the United States 37 years ago. America and diners have generally been good to the Tsolkas brothers. When they immigrated from a small town in Greece where only a few kids their age went to high school, they gravitated to a business that had drawn their unskilled countrymen since the turn of the century. Starting with a doughnut shop on Broadway, the brothers owned several classic coffee shops on the Upper West Side: a dozen or so booths, pastries under plastic covers, the mother of all menus, and a platoon of eccentric regulars.

As New Yorkers have seen, dinermen work like mad, and the restaurant, on Broadway at 93rd Street, was the Tsolkases’ ticket to the middle class. But just at the point when most small-business owners want to start collecting a payoff for decades of labor, their situation looked tougher than ever. “When my lease ends in 2008—finish,” John Tsolkas promised that day. “I walk away.”

The end would come much sooner than that. One Saturday at the end of June, regulars arrived to find the Tsolkas brothers gone, their restaurant gated and locked. (“I’ve been eating at Happy Burger for twenty years, and one day they vanish without a word?” said Oscar Weizner, a regular who had taken refuge at a coffee shop down the block.) Happy Burger’s landlord, knowing he could get much higher rent from a new tenant, had offered the weary brothers an attractive buyout for the four years left on their lease. Tracked down at his home in Queens later that week, John Tsolkas had little to say beyond “Nothing last forever.”

A pastry tableau at Tom's Restaurant (made famous by Seinfeld).  

Sad but true: The classic New York coffee shop is fading fast. The recession is part of the problem; according to Pan Gregorian Enterprises, a purchasing co-op for coffee shops and diners that has 475 local members, revenues were down 20 percent last year. But there are other forces at work, from skyrocketing rents to Starbucks hegemony, that are forcing coffee-shop owners like the Tsolkas brothers into retirement. Though traditional coffee shops do well in the outer boroughs, where the pressure to turn over leases isn’t as high, it is likely that over the next decade, those in Manhattan will go the way of Jewish delis and Irish bars—morphed beyond recognition or driven so close to extinction that the remaining few become nostalgia items or theme-park curiosities. (That’s already happening to Tom’s Restaurant, the neon-lit place at 112th and Broadway that became famous for the exterior shots on Seinfeld, and was briefly closed a few weeks back after a skirmish with the Department of Health.) “They are going to turn Manhattan into a museum,” Gus Tsolkas warns, as he gripes about the traffic enforcement that dissuades customers from double-parking to dash inside for a coffee, light and sweet, to go.

Consider the predicament of the Cosmic Coffee Shop, just south of Columbus Circle. “Everything high in sky,” moans Elias Tsinias, who says he’s seen his rent rise from $3,000 a month to $35,000 in the 32 years he has owned the place. Needless to say, his prices haven’t matched that elevenfold increase, and the rent is clobbering him. Furthermore, business continues to deteriorate despite the opening of the mammoth Time Warner Center a block away. “Big building,” he sneers, “but nobody come here. They want to spend $20 for eggs, instead of $6.” According to restaurant consultant Roger Fields, rent should not exceed 12 percent of sales. For the Cosmic, that means a gross of about $3.5 million a year. In fact, it brings in about $1 million a year—fine a few years ago but problematic now. Next year, the lease comes up for renewal; the owners say the landlord wants $75,000 a month, and “we won’t be here.”

Another problem is the trademark epic menu. Meant to appeal to a range of customers from the little old lady to the young couple who’ve just bought an expensive co-op in the neighborhood, it tries to give everyone everything. It worked for decades, but it isn’t working anymore. Certain high-volume, low-cost items do fine: A $5 burger, for example, costs about a buck for ingredients and requires less labor than most dishes—say, 25 cents’ worth. Add in the rent, electricity, and other miscellany, and that plate returns a 60 percent profit, which is why coffee-shop owners love to yell “Cheeseburger, cheeseburger.”

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