New Orleans dines on newfound prosperity

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Posted: Wednesday, December 4, 2013 12:00 am

NEW ORLEANS — By one count there were already 65 restaurants on the three miles of Magazine Street, a major artery through this city's upscale districts. But on a recent Monday, diners were eager for No. 66. The minute the lights went on at Ivy, an autumnal little lounge with an as-seen-on-TV chef, the curious were at the door.

This city, of course, has always been food-obsessed. But these days it has reached new levels of insatiability. Though the city has fewer people than it did before Hurricane Katrina hit in 2005, it has 70 percent more restaurants, according to a count by Tom Fitzmorris, a local expert who does not include fast-food or chain restaurants.

“It's really something,” said Fitzmorris, between callers to his daily radio show about eating out. “It has never stopped going up, even in the summer, which is not a good time for us in the restaurant business.”

Economically speaking, the restaurant boom is a barometer of a city that is more affluent and more educated than it used to be.

“Richer cities have more restaurants per capita,” said Jed Kolko, the chief economist of Trulia, the real estate website. Kolko said New Orleans already ranked 14th in the nation on restaurants per person in 2010, just a few years into the recent boom (San Francisco was No. 1).

At the same time, the high concentration of restaurants here has built on itself, as chefs are attracted to a city where eating out is so popular and the most successful ones expand. In that sense, it represents an industry cluster along the lines of the financial industry on Wall Street or high technology in Silicon Valley. More than 10 percent of the jobs in the metropolitan area are in the restaurant business, compared with an average of 8.2 percent nationwide.

To be sure, the newcomers on the restaurant scene do not necessarily bother with traditional notions of New Orleans fare. They include Vietnamese storefronts and austerely chic establishments that could as easily be in Brooklyn or Chicago. An Israeli-owned steakhouse that just opened in the French Quarter sets prices according to how long the beef has been aged.

But the old standbys have not been left out of the action. Several of the city's most distinguished French Quarter dining rooms are under new ownership. John Georges, a grocery distribution magnate, newspaper publisher and recent political hopeful who bought the storied Galatoire's, opened a new restaurant, Galatoire's 33 Bar & Steak, next door. The lobster thermidor is $52.

In March, a group of brothers who got their start with a chain of frozen daiquiri bars acquired the 93-year-old Broussard's and spent more than $1 million refurbishing it. The group, Creole Cuisine Restaurant Concepts, owns nine French Quarter restaurants. Sales are up 13 percent compared with the same period last year in the same locations, said Zeid Ammari, the chief operating officer.

Despite the abundance of competition, banks have not reduced financing for new establishments, said Jeff Ehlinger, a senior vice president at First Bank and Trust in New Orleans. “That might happen, but it's not currently happening,” he said. “Most of these restaurants would have to start going by the wayside, and right now they're doing pretty well.”

Increased tourism explains part of the industry's success. It has been on the rebound, with 9 million visitors last year who spent, according to the New Orleans Convention and Visitors Bureau, $6 billion, up from a low of $2.8 billion in 2006. Adjusted for inflation, last year's total was about the same amount as visitors spent in 2004, the year before the hurricane.

Back then, though, the city had only 809 restaurants. Now it has almost 1,400, which means locals are also driving a lot of the new business.

Thanks to the rebuilding boom after the storm, New Orleans largely escaped the recession, losing far fewer jobs than the country as a whole. But the city lost many of its poor families. Though the median household income in New Orleans is still below the national average, the population has more college degrees and more households that earn more than $75,000 a year than it did before the storm.

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