Recession Confession

Four years ago, my wife, Julie, came up with an idea—“a restaurant for kids to take their parents to”—that was essentially inspired by our then three-year-old son, August. Her goal was to share the glamorous fancy coffee shops of Los Angeles and New York in the seventies and eighties—our childhood experiences—with him, his generation, and generations to come (we hoped). I also saw this restaurant as a brand, one that had the potential to be quite powerful, maybe even global. I was hooked, but I already had three other jobs: literary agent, writer, and aspiring movie producer.        
                 
There were a couple of other important hiccups since neither of us had ever been in the restaurant business, and neither of us knew quite what we were in for. We needed to find an amazing location (which would take two years and three false starts), build a space whose design had existed until then only in our heads, and raise a gigantic amount of money: $2.5 million. Nonetheless, that very day Sweetiepie was born. I believe it was that same night in 2005 that I registered every Web domain I could think of and also applied for every trademark we could ever possibly need. If we were going to embark on what was to become a four-year, hyperintense, hellishly stressful journey, we were going to go for the jugular—we were going to create something special and large.
            
When you tell someone you’re opening a restaurant, you get an almost universal response . . . something along the lines of “Why do you want to go and do a thing like that? Do you know how hard it is to have a restaurant? Even a successful one?” And the often quoted but incorrect “Do you realize that 90 percent of new restaurants close in the first year?” (The actual figure is 26 percent.) What’s most noticeable about this blast of alarm is that the tone of voice delivering it is like that of the old man in Poltergeist II who, from behind the screen door, quiveringly yells, “You’re all gonna die!”
      
Running a restaurant is a profoundly difficult thing—I give them that. But there was something else lurking, something none of those jokers could have ever divined: We were embarking on this wild journey just as the most perfect financial storm in a century was brewing and would soon be headed right for us.
            
Meanwhile, Julie worked through the details of creating the extraordinary design: mirrored walls and ceilings; a nine-foot brass birdcage with table and chairs inside; tiny doors within doors for kids; seating inspired by the Beverly Hills Hotel Fountain Coffee Shop.

We were also in the process of a renovation on our own home, a town house in Greenwich Village that we had completely gutted and were three-quarters of the way to finishing. We were our ambitious selves, trying to pull off a timeless design that was classical in its proportions but very modern in its simplicity, which included unfinished raw wood floors in some places and honed white marble floors in others, brass toggle light switches, and Renaissance fireplaces.
 
Like all young couples, we were reaching as deep in our pockets as we could to create a family home. It was, as you may recall, a time when banks were very willing to fund big dreams; the world’s terminal cancer of bad debt was still invisible. But Sweetiepie was a business, and it was imperative that the money come from somewhere else like investors.
                 
Last July, I started to raise money; it had taken ages to get the legal documents of the offering plan together. Some friends were there right at the beginning to get the ball rolling—$75K here, $100K there. But I was pitching in all directions: old money, new money, garment guys, hotel guys, speculators, and innovators. And so far I had little to show for it.
             
Then, one of our key investors, a fellow from London, suggested I try there. At the time, the pound was killing the dollar, and a UK investor could by shares in Sweetiepie for essentially half price. I made some very promising headway there but no signed checks just then.
            
From London, I allowed myself to be willingly kidnapped and taken by private jet (owned by an Iraqi prince who lived in Dubai whom I had met the night before at two in the morning after Elton John’s big AIDS fund-raiser) to St.-Tropez, where a friend told me he would introduce me to some Russians who were always open to groovy investment opportunities and often took big stakes. There I commenced two days of surreal and white-knuckled fun hunting: There were helicopters (my first) to take us (and one, inexplicably to take our bags); midnight dinners with Naomi Campbell and her retinue, all in white linen; a bottled table at the Les Caves du Roy; a loud and blinding brunch at La Voile Rouge—all scored by an unceasing Studio 54–like disco backbeat. A few Nebuchadnezzars later and a desperate escape from private yacht to fly jet steerage back to London and I had procured another 200 large. But we were just a quarter of the way there, and the Russian contingent was apparently not looking at restaurant investments . . . and who could blame them?
              
By summer, oil prices were at all-time highs, and there was a shift in the air and national mood—not to mention my own. But carry on I did, getting no takers on investment invitations, having some investors back out, all while the renovation at 19 Greenwich Avenue was eating money faster than ever. The marble floors were going in. The custom mural in the back room, which Julie had designed and commissioned from a young Brooklyn painter named Kate Pane, was being finished. The exquisite bar and white marble counter were being installed. The kitchen equipment was on its way. The bills were unceasing. . . $100,000 a month.

Then the bottom drops out on September 15. Goldman Sachs posts record losses. AIG is in danger of collapse. Detroit has an aneurysm. Folks are muttering about the end of the age of America, which is officially in a recession, if not worse. How do you look anyone in the eye and ask for money in a world like that? So I started negotiating deals to defer payment to suppliers, the trades, and anyone else who would listen, given the highly unusual economic circumstances the world had suddenly found itself in.
            
Now, mind you, while things were getting worse by the day, and the media were as per usual whipping it all up into an impossible froth, the naysayers who were so naysaying earlier were getting worse, too. The folks who had tried to dissuade us initially were now in “I told you so” mode. As if we weren’t under enough strain, we were a young couple trying to realize a dream, and it was beating the hell out of us. Julie and I had ambitions to create. We always had. We were both in bands, had toured, and made records. We had always been attracted to big projects, and they had all taken a lot out of us but also given us an enormous amount back. But this one had pushed us to maximum extension, and we were suffering for it.

There was something in the air. It wasn’t just our restaurant endeavor. Like us, a lot of people we knew were experiencing real strains on their marriages, their financial security, their place in the world. Had we all made leveraged deals with the Devil? Had we put our families, our spirits, and our futures on the table and crapped out?

Then the true anxiety started and held on for weeks. What if something born of joy ended up bringing horror and destruction? I started building a figurative trap door to go through should this whole thing auger in. Could I sell the lease? Bring in an established emergency partner? Should I put the whole thing into hibernation and just try to keep paying the rent? Should I borrow money from a loan shark? Should I enter the Witness Protection Program?

I couldn’t help wondering if we had made a gigantic and naive mistake. But like the countdown on an explosive device in an action movie, there was no stopping it now. In the end, my friend and brilliant lawyer Peter Brav and I made some very complicated deals with the bank to ensure we’d have the money to open—and last year, right after Thanksgiving, we did.

And then it seemed our restaurant became something we had never imagined it would—the perfect place to escape it all. Sweetiepie isn’t expensive–you can get a grilled cheese for $8 and fried chicken with mashed potatoes and gravy for $20. The food is simple, done perfectly and beautifully presented. It’s a place to celebrate during dark times (and bright times as well) with the whole family, just as we had intended.

These days, when I walk in and see the place packed with people having a great time, I’m so pleased I forget the agony of its birth—and the fragility of its future. Regardless of the final outcome, we’re proud of what we’ve made and what the place means to the person we made it for—August. He is very happy in his saloon. It’s a place he likes to bring his lady friends to ply them with what he calls a “Shirley Rogers.” You’ll likely see him behind the bar, greeting the customers or playing chess and talking Star Wars Lego with me at the counter, tucking in to his mini cheeseburgers and a chocolate milkshake, Led Zeppelin playing in the background. I hope one day he can do the same with his kid at a Sweetiepie in Tokyo or London or—with a little more Janklow ambition—on the moon, for that matter.