For the past year, Collingswood has pitched the New Jersey Division of Alcoholic Beverage Control on a wide-scale alternative to population-limited liquor licensing. The plan would help its BYOB Restaurant Row survive a crucial economic period.
By Matt Skoufalos | May 31, 2023
In Collingswood, the abrupt closure of The Tortilla Press, one of its longest-tenured eateries, underscored the ratcheting economic pressure that chef-driven, independent restaurants have felt since the onset of the novel coronavirus (COVID-19) pandemic of 2020.
The specific circumstances of The Tortilla Press, however, belie another simmering issue in the borough dining scene.
Now more than ever, the longstanding prohibition of alcohol sales in Collingswood are being felt by the restaurant businesses that comprise its core economy.
Even as The Tortilla Press was failing in Collingswood, its owners Lydia Cipriani and Mark Smith simultaneously operated “a nearly identical restaurant in Pennsauken that has no problem whatsoever,” Cipriani told NJ Pen.
There, The Tortilla Press Cantina, which serves alcohol, “subsidize[d]our location in Collingswood for about two years,” she said.
Even with new management and a new chef, operating costs in Collingswood “increased to the point where our margins were not sustainable without alcohol,” Cipriani said.
Other Collingswood restaurateurs see Cipriani’s testimonial as evidence for their case for permitting alcohol sales in a borough business district built around bring-your-own-booze (BYOB) establishments.
Dominic Piperno, chef-owner of the critically acclaimed Hearthside, said he’d questioned the financial sustainability of operating a BYOB eatery even prior to the pandemic. That uncertainty motivated his acquisition of a liquor license in nearby Haddon Township, where Piperno’s team is readying plans for a tapas-and-cocktails establishment in the coming months.
When he heard not just that Tortilla Press was shutting down the Collingswood location at which it had established its brand, but that its Pennsauken eatery had been floating operations in Collingswood for two years, “I was in shock,” Piperno said.
“They’ve been here forever,” he said. “But it makes sense.
“What’s the point of losing money at one place and making money at another place?”
In the early 2000s, when Collingswood redeveloped its downtown business district around a chef-driven restaurant model, eateries in the area enjoyed profit margins of 15 to 20 percent; by 2018, that had fallen to 4 to 7 percent, Philadelphia magazine reported.
In a 2023 analysis from point-of-sale vendor Toast, average restaurant margins are now as narrow as 3 to 5 percent.
Market-watchers point to different complicating factors behind the tightening margins — from difficulty retaining workers, to sharply increased costs for raw ingredients — but the fundamental solutions remain unchanged: increasing sales and decreasing costs.
When alcohol sales can boost restaurant revenues by at least 15 to 20 percent, it’s easy to understand why restaurateurs continue to push for the change.
“My profit margin is 6 percent without liquor,” Piperno said. “At what point am I going to say, making this amount of money at Hearthside is not worth it when I could just move all my staff over to a liquor-licensed place, and do 200-300 covers a night, selling alcohol?”
The advantages of opening a BYOB in Collingswood’s densely clustered Restaurant Row used to be joining a concentration of small eateries that banded together for survival instead of hunting down a million-dollar liquor license in a much larger community like Cherry Hill.
But as ingredient and labor costs have continued to spiral, the potential profits from alcohol service are no longer something that restaurant owners can afford to concede as theoretical.
“Something you used to pay $9 a pound for is now $17 a pound; someone you paid $14.50 an hour, you now pay $20 an hour,” Piperno said. “And people complain if you raise prices.
“In order to do any type of refined food, where you’re ordering from local purveyors and using high-quality ingredients, it’s a struggle,” he said. “I can’t charge $31 for a ceviche; I can’t charge $280 for a steak.”
Controlling costs by adopting a prix fixe tasting menu, as eateries like Hearthside and Zeppoli have done, is an alternative solution, but one that’s not available to every restaurant. (Cipriani herself conceded that it’s difficult to imagine the Mexican-inspired Tortilla Press surviving on $125-per-person chef’s tasting meals when its competition includes taquerias.)
“You pick and choose your battles with the price point,” Piperno said. “We went to a prix fixe [menu] because it was the only way to stay afloat,” he said, “but the short answer is: booze.”
‘Everything you ever wanted to do, you can’t do that anymore’
Chef Michael DeLone, who overhauled the menu at Nunzio’s Ristorante Rustico when he took it over in 2021, said that the difference is “night and day” between operating a restaurant that’s permitted to serve alcohol versus one that is not.
In Philadelphia, DeLone’s restaurants could run special wine or bourbon pairing dinners to boost sales.
He isn’t afforded the same flexibility in New Jersey, and without it, DeLone said he’s constantly shopping around for a break on costs. Price increases have kept him from using his favorite purveyors, and remain an underlying consideration in everything he does.
“Since the pandemic, we have to rethink everything,” DeLone said. “Every $10 matters to me. They’re the ends that you have to meet. I’m trying to utilize as local as I can, and shop around, and it’s constant.
“Everything you ever wanted to do, you can’t do that anymore,” he said. “You can’t serve Wagyu or Kobe [beef]anymore; people aren’t going to buy it.”
Even when running specials, sometimes DeLone will bite the bullet and plate a dish that’s 40-to-45-percent food costs in the hopes of making up the difference in volume — but even those returns are slight.
“No one wants to run at 50 percent food costs,” DeLone said; “you’re going to fail. But I’d rather get these people in here and make something than sit here idle and try to get people in the door.”
DeLone’s customer base includes a mix of clientele from Philadelphia and South Jersey, both young and old. So far, private events and party bookings have helped keep the business going. Although the flow of guests might be steady, it’s far from jammed, he said.
“You can draw people early, and you can draw people a little later,” he said. “If nobody’s here when I open the door, that’s what I deal with. And then come 9:00, the town’s empty.
“Do I want liquor? 1,000 percent,” DeLone said. “That needs to happen. Do I need to go, day by day, worrying that that’s ever going to happen? I have to keep my head down and push until one day where I get that letter that says we can start doing that.”
Chef Rich Cusack of June BYOB, who recently expanded his operations, opening the brasserie Café Le Jardin in Audubon, said that without a liquor license, “you have to get super-creative” to keep a fine dining restaurant afloat.
“I don’t understand the workforce now,” Cusack said.
“Labor costs are up 10 percent across the board.
“It’s hard to find people, and when you do, you’ve got to pay a ton of money,” he said. “Food cost is up, so inflation kills you. There’s certain dishes I can’t put on the menu.
“It’s a combination of everything,” Cusack said. “We’re still in a market recession, but everybody’s acting like we’re not.” For most independent operators, the bottom line is, “you don’t own the business; the business owns you now.
“All my restaurant friends say they’re scared,” Cusack said. “They keep trying to change their concepts.”
The additional 15 to 20 percent of revenues that alcohol sales could add to his bottom line is “huge,” Cusack said, and would afford him the flexibility to negotiate the increased costs for food and labor.
‘They’ve all been struggling since pandemic, and we’ve been trying to come up with ways to help’
The problem for Collingswood, which bars alcohol sales by ordinance, is how to support the now-mature BYOB restaurant scene it began cultivating decades ago.
Mayor Jim Maley, who described dining as the anchor of the borough business district, said that restaurants need help, and officials are actively seeking a workaround that would support alcohol sales.
“The costs that they’ve gotten hit with are smashing, and we’ve been trying for almost a year now to help them expand that revenue in a conscious, deliberate way that maintains the restaurant scene that we have,” Maley said.
The chief dilemma is that New Jersey state laws limit alcohol licenses by population; with some 14,000 residents, Collingswood could theoretically be allocated as many as four licenses. That’s nonetheless an insufficient figure for a town built around a few dozen independent restaurants, and the chief reason the borough has maintained its dry status for so long.
“Going back 20, 25 years ago, that’s why we didn’t do it then,” Maley said. “The sense was that if we only had liquor, we were only going to get three or four restaurants [to open up in town].
“That’s the deliberate decision back then, and today, I still think we’re really rolling the dice if we do that,” he said.
“Doing four, all I’m doing is issuing a death knell for the ones that don’t get it. I think you’ve got to pursue the other options all the way to the end.”
For the past year, Maley and other Collingswood officials have been in talks with the New Jersey Division of Alcoholic Beverage Control (ABC) to propose an alternative arrangement that wouldn’t unfairly privilege one business over another.
Although the borough is home to a craft microbrewery and its restaurants are permitted to form partnerships with New Jersey wineries to offer onsite sales — both programs established by state law — Maley said Collingswood is looking into leveraging ABC rules around concessionaire permits to find a creative solution for its local BYOBs.
“We’ve been working with the restaurants and with the state for close to a year now to try to find ways to open more doors with respect to the serving of alcohol for more restaurants,” the mayor said.
“It would be in a controlled way, where it’s not bars; it’s not even bars in restaurants,” he said. “It would be restaurant table service, all alcohol, in addition to the Jersey wines. I can’t say that it’s a wide-open path, but we’re trying to make it work.”
Under New Jersey administrative code, concessionaire permits are issued to entities that are “authorized to sell alcoholic beverages for immediate consumption in any public building or on any property owned by or under the control of the State of New Jersey or any political subdivision thereof.”
The implication of the statute, Maley said, is that such agreements are contingent upon government involvement — typically, property ownership.
In order to effectuate such an arrangement, the municipal government would take ownership of the land on which a restaurant is established, and lease it back with the concessionaire’s license, for which the state charges $2,000 annually.
Taxes on the building would still be paid to the borough, and taxes on the land would be applied to the concessionaire’s license. The process would be reversible at any point upon the wishes of the property owner.
This approach differs from that of providing liquor licenses via a sealed bid, which most communities do in order to generate one-time revenues, and to avoid the politics of favoring one business over another. But that process would obligate the borough to award the licenses to the highest bidders, whether they’re local or not.
“We wouldn’t want to put it up for auction, and have Houlihan’s open up a new restaurant at the Teamsters [building],” Maley said.
“It’s intended to try to sustain the anchor businesses in our downtown.”
The concessionaire structure has an established precedent that has succeeded elsewhere, the mayor pointed out.
The Camden County government has such an arrangement that allows La Scala’s Birra to serve alcohol at Cooper River Park; another enabled Glassboro to recruit Chickie’s and Pete’s for the Rowan University campus.
In Collingswood, The Tortilla Press would have been the first business to attempt the concessionaire permit, but the plan didn’t come together in time to keep it open, the mayor said.
“Lydia and Mark have been our test case for that,” Maley said. “We’re really sad to see this happen; we’ve been aware that they’ve all been struggling since pandemic, and have been trying to come up with ways to help.”
Governor Phil Murphy has made alcohol reforms a priority of his second term, even calling for them in his State of the State address, but legislative process has extended the timeline beyond what Maley said would be useful for Collingswood restaurants.
“It’s well-intentioned, it’s just going to take way too long,” he said. “It would not address our issue of so many restaurants that would need the help.”
So far, the concessionaire plan has found a lukewarm reception with ABC officials, in at least some part due to its scale, Maley said.
“We’ve met with [the ABC] a couple times, and been very frank with them that we could have 20 [restaurants seeking permits], and I think that gives them pause,” he said.
“We’re trying to do something that benefits the most that we can, but it’s tough,” the mayor said. “The smallest of restaurants would love to be able to serve a guy a beer with his burger.
“There’s a lot of state laws, and we’re still plugging.”
(Requests seeking comment from NJ ABC were not answered by press time.)
‘We all need to grow together’
Even if the concessionaire plan were approved at the state level, as well as at the scale the borough is requesting, its technical complications might give some property owners pause.
The Tortilla Press was the ideal test case because owners Lydia Cipriani and Mark Smith own the storefront in which their restaurant is housed.
Not every Collingswood restaurateur has that option.
Cusack, who leases the building in which June BYOB is housed, said he couldn’t see his landlord agreeing to such a deal just to support his restaurant.
“I don’t see him doing it, but I also don’t disagree with him,” Cusack said. “If somebody said, ‘Sell me your land,’ and you were only doing it for your tenant, I probably wouldn’t do it.”
Although Piperno agreed that concessionaire licenses would be “a game-changer” for Collingswood, he believes the borough should auction off full liquor licenses at the same time, and allow bigger investors to leverage the market interest he believes is there.
“If you’re going to do the concessionaire’s license, and that’s my only option, then let’s do it,” he said. “I would remodel the inside of my restaurant; I would renovate the outside if I had to, to accommodate a full-service bar.”
DeLone favored the concessionaire’s approach as a more equitable solution for Restaurant Row.
“If it came down to signing my deed over to them, to be able to sell without any fallback to me in the long run, I would do it tomorrow,” he said.
DeLone also endorsed the concessionaire license approach over the option of bidding for a handful of population-based licenses.
“I think that if you’re going to make them available, everyone should have a crack,” he said. “I’m at the point where everyone over here needs to thrive, not just certain people.
“We all need to grow together.”
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