Economy keeps Las Vegas restaurants reeling

Las Vegas lovers of fine dining were dealt two more blows in the past couple of weeks with the closings of west-side stalwarts Rosemary's Restaurant and Nora's Osteria and Wine Bar. And the pain is being felt by fellow restaurant owners as well.

"It's absolutely horrible," said Jeff Wyatt, who, with his wife, Rhonda, owns Marche Bacchus at 2620 Regatta Drive in Desert Shores.

"We know these folks," he said. "We've known them before we owned this restaurant, as individuals. ... We'd cross-fertilize. We'd send customers, and vice versa."

"It's devastating," said Todd Clore, owner of Todd's Unique Dining at 4350 E. Sunset Road in Henderson. "It's a very sad statement as to what is happening in Las Vegas -- two big players."

"What a shame," said Bob Morris, who's not a restaurant owner but a professor emeritus with the University of Nevada Cooperative Extension, who became acquainted with Nora's owner Giovanni Mauro through their shared interest in the Slow Food movement.

"He was the very first chef to really show an interest in locally grown foods in the valley," Morris said. "It was my favorite restaurant in Las Vegas."

Mauro could not be reached for comment last week (and while Nora's Osteria at 1031 S. Rampart Blvd. has closed, Nora's Cuisine at 6020 W. Flamingo Road remains open). But Wendy Jordan, who owned Rosemary's, 8125 W. Sahara Ave., with her husband, Michael, was philosophical Friday. She said that when they jointly made the decision to close the restaurant, she told him, "You taught me that change brings opportunities."

"I said that?" was the reply.

Michael Jordan said the closure of the restaurant that opened for business in May 1999 was "very tough."

He said there wasn't one precipitating event, but a slow progression, tied to the lingering dismal state of Las Vegas' economy.

"A whole lot of little things added up to a big one," Jordan said. "We always kept hoping it was going to make that turn. It was a hard choice, thinking about our family and our kids," who, at 14 and 9, have grown up with Rosemary's. "We were moving toward a point of really jeopardizing ourselves."

Rosemary's -- which was named for his mother -- had had three revenue streams: a catering division, a wing for private parties and the restaurant itself. A year and a half ago, the demand for catering dried up, Jordan said. Then, about eight months ago, private events started a sharp decline. They were down to the restaurant itself, and business there had fallen off sharply, with a normal evening serving 160 to 170 dropping to 60 to 70.

"That's a problem," he said.

They tried to make adjustments to compensate -- such as reducing lunch service to one day a week, and introducing promotions -- but "since March, the feeling has been in my gut that this is what we're moving toward."

"I'm in complete understanding of what happened," he said. "We're a luxury item, and those tend to have problems in these times."

Stephen Brown, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas, agreed.

"Restaurants are something that people cut back on when they feel that their discretionary income is pinched," he said. "And the Las Vegas economy has been pretty weak for the last four years."

He doesn't see things improving anytime soon.

"We were beginning to see a recovery late last year and early this year," Brown said. "But as I looked at the numbers that are coming in for the second quarter, it appears that the national slowdown is weakening our visitor volume, and we're not seeing quite the pickup that I was hoping for in the second quarter."

Catherine Pawelek, who with her husband, Jose-Luis, owns Elements Kitchen and Martini Bar at 4950 S. Rainbow Blvd., said they frequented both Rosemary's and Nora's.

"You know, the recession has hit a lot of restaurants, but I never would have anticipated those two," she said. She had heard that Nora's had declared bankruptcy, but "you can survive that. The closing made us squirm a little bit."

"Rosemary's, especially, hit us really hard because they were such a staple," she said. "Everybody would always talk about them."

Clore, who will close for his annual vacation Aug. 1-21, said independent restaurant owners continue to be squeezed on numerous fronts. Average revenues, he said, have dropped 30 percent, but rent still is increasing 4 percent a year.

"Purveyors charge for gas," he said. "You're getting beaned left and right. Food's not getting cheaper, wine's not getting cheaper. Our prices can't go up, because we lose a percentage of business."

David Robins, managing partner/operations with the Wolfgang Puck Fine Dining Group in Las Vegas, said the closings were "unfortunate, but seem to be the wave of where things are right now."

He said the group's business remains strong, in part because he and senior managing partner Tom Kaplan "pulled back right when the economy was crashing," restructuring menu pricing and their management team.

"We always felt there was an oversaturation of restaurants and also an oversaturation of rooms in Las Vegas, and we knew the bubble would burst," Robins said. "We felt it coming; we saw our numbers slipping. We just decided to react. We were fortunate enough to time it correctly.

"There were times when our goal was to break even -- just to be able to pay the rent and bills and pay our staff. Now we're back to making some small profit and we're happy with that."

Robins conceded that larger groups have more opportunities to roll with the times.

"It's hard when you're a small-time operator, such as the restaurants that are closing," he said. "The economies of scale are very tough."

Last week, the Jordans were remaining philosophical. They said they had 35 employees at the end (down from a peak of 50 to 60), and that some had already had leads on new jobs.

"Rosemary's looks good on a resume," he said, adding that he told them, "I hope your time here opens doors for you."

Wendy Jordan will continue as a chef/instructor at Le Cordon Bleu College of Culinary Arts Las Vegas.

"I've got to see what opportunities are out there," Michael Jordan said. "I don't want to walk away from my industry. We'll see where I land."

Wendy Jordan said response since the closing was announced has been heartwarming.

"You know it, but you don't know how a restaurant can affect someone's life," she said.

All of the restaurant owners interviewed for this story said they're grateful for their loyal customers, and the Jordans said they've been grateful to be a part of the community.

"We want to make sure people understand that we appreciate everything," he said. "We're sorry it happened, but thank you for everything you gave us, because without you, we wouldn't have improved. That thought is heavy in our hearts."

But Clore also sounded a cautionary note.

"I think, truly, shame on the people that liked Rosemary's and liked Nora's, that they didn't visit and now they're crying on Facebook," he said. "They go to these chain restaurants and they wait for two hours to get in. The only way for the food to get better in this town is to support the people that they like. Because when they don't, that's what happens."

Contact reporter Heidi Knapp Rinella at hrinella@review journal.com or 702-383-0474.