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An interview with Nick Valenti



by Matt DeLucia


1968 seems like such a long time ago. I was just eight, and we were still a year away from the miracle Mets and Neil Armstrong’s magical footsteps. In that year, Nick Valenti was hired by Restaurant Associates as a management trainee, over 38 years ago. 1968 also contained some of the most turbulent events in our nation’s history. Vietnam War deaths reached a peak of 500 a week, and both Martin Luther King Jr. and Robert Kennedy were assassinated. The fabric of our country seemed to be unraveling out of control, and the young people of this time period distanced themselves from the “establishment”, tuning out by using drugs, listening to some of the most influential music ever written, and protesting against an insulated and clueless government. While the short-lived cultural tidal wave of the hippie movement soon faded away, the music of that era never did, and never will.

Yet the most enduring message from this time period seemed to be a longing for individuality. So when Nick Valenti was looking for his first restaurant job, he wanted what most young people did at the time - freedom of expression. It didn’t take long for Valenti to take his hospitality background and combine it with 1968’s spirit of individuality and creativity, and create his own niche in the restaurant industry.

“Most of the Restaurant Associate’s competition was individual operators. There was an owner and a chef and you did what they told you, or you were thrown out. So there wasn’t a whole lot to be gained, I thought, by doing that. I had experienced that in our family business, and I wanted to get a different perspective. In those days what was going on at Restaurant Associates wasn’t going on anywhere else. The restaurants that we were creating then were really extraordinary in terms of the detail and planning and expertise that had gone into them, so that attracted me. I was recruited by Restaurant Associates, and the interview was held over dinner at one of their restaurants. The meal was good and I thought that the guy who interviewed me had a lot of interesting things to say. So that was the reason why I joined.”

Freshly graduated from a hospitality management program, Valenti initially went to work at JFK airport running one of RA’s restaurants, which at the time was less a place to eat when you were about to get on a plane, and more of a destination restaurant. Soon after that he was sent to Westbury, Long Island to run a restaurant called the John Peel Room, which was the restaurant inside Harry Helmsley’s Island Inn Hotel. It was at this restaurant, an authentic English steakhouse, where Valenti showed his talent for restaurant managing, increasing annual revenues from $1 million to $4 million and turning John Peel into one of the highest grossing restaurants in Long Island. Located by the old Roosevelt Raceway, the restaurant had always done well, and it hosted many celebrities from the nearby Myerberg movie studio, but Valenti saw much more potential than others did.

“It was doing okay, but it just wasn’t really fulfilling its potential. So we revamped the menus and introduced a complete dinner menu. New York has some of the wealthiest suburbs in the world, and people that live there can afford to do whatever they want. It was true then and to a certain extent it’s still true today, that people feel they have to go to New York to get a New York experience. I think that’s what we did, we sort of brought that level of quality out to the suburbs, and we did quite well. People would say that all the time, they would come in and say ‘to get a meal like this we’d really have to go into Manhattan.’”

RA ran the John Peel Room for the hotel on a management fee and a profit share basis, which attracted a lot of attention at the time. Meanwhile, some of Valenti’s other innovations that went far beyond traditional marketing were responsible for generating a large and loyal following. In additional to offering a complete five-course brunch for around ten dollars, they shunned newspaper advertisements in favor of unique marketing techniques that would soon become known as “guerrilla marketing” nearly two decades later.

“We did some things out there that hadn’t been done. If you came to Saturday night dinner and you came late, we’d give you the Sunday Times to take home as a reminder that you could come back for brunch the next day. Also, we were famous for these biscuits called “fat rascals,” and on Friday and Saturday nights when people were leaving the restaurant, we’d give them biscuits that had just been baked that they could take home. So we did that kind of marketing, because we thought that this was sort of a smart way to encourage word of mouth. It was a relatively inexpensive thing, but people would say ‘Gee, we went to this place and they gave us the next morning’s breakfast or the New York Times to read Sunday morning so we wouldn’t have to get up and go get the paper the next day.’”

Valenti stayed at John Peel for seven years and soon became known as a specialist in turning around restaurants that were not doing well. One of his next challenges was to run the food service operations at the U.S. Open tennis event in Forest Hills in 1976. He created all the food concepts for the tennis center, and while RA did a $250K business that first year, they are bringing in $15M a year now in Flushing Meadows. RA was the first company to introduce restaurant-quality food at sporting events, and they transferred that concept and applied the same principles to corporate dining, museums, and performing arts centers.

“We took over the U.S. Open from this little mom-and-pop organization. They sold a lot of hot dogs and beer, so the first year we went in we changed the way the hot dogs were prepared. We had them specially made, and served them with sauerkraut that was steamed with beer. We changed the mustard from the regular mustard to what was then a fairly revolutionary mustard, Grey Poupon. It was a relatively simple thing, but I remember that in our first year at Forest Hills, the president of Coca Cola sent me a note saying that he thought it was the best hot dog he had ever tasted! So I sort of got a big kick out of that.”

The improvements that RA made to the U.S. Open tennis tournament occurred gradually over time, from one high-end food stand in 1976 to twelve the next year, and culminating in the first-ever food court at a sporting event in Flushing Meadows in 1978. Today there are 9 suites, five restaurants, and a huge QSR component. All together, these components serve as a model for upscale food service at sporting events.

“Very often people say to me, ‘What do you guys do, you’re in the restaurant business, you’re in the sports entertainment business, B&I, museums and performing arts centers, those are all very different businesses,’ when in fact, they’re not. But at the end of the day, what has made the company successful is that we’ve offered this quality level of food in these venues where you may not expect it.”

With his successes adding up, Valenti was eventually given more and more responsibility within the company, and in 1980 he was made president of RA’s restaurant group. While their restaurants were successful, at the time the food service business was growing even faster than the restaurant business.

“We had developed the food service into something that hadn’t existed before. We called it sort of a premium food service industry, and we did the same thing that we had done with sports entertainment, we introduced restaurant quality food. Most companies were viewing corporate food services as having a captive audience, and we did just the opposite. We viewed it the same as we would view a restaurant audience, and made it a destination place.”

Edward Brown
Executive Chef
Sea Grill

Edward Brown has been executive chef of The Sea Grill, one of RA’s premier seafood destinations, since 1984. After graduating from CIA, Brown worked with Christian Delouvrier and Alain Senderens before traveling to Paris to work at the three-star Lucas Carlton for Senderens. During his stay in France he was introduced to Japanese cuisine and cooking techniques, and today these techniques are evident in the combinations, flavors, and simplicity of his menu at The Sea Grill.
He also has the distinction of having created the model for the opening and closing of the Aces Restaurant every year at the U.S. Open tennis tournament, and he does this every year with the same team of people. “I arrive on the scene with my entire crew three days prior to the opening, and set up the whole thing from scratch. There’s not a lick of salt, a drop of oil, nothing in the place. We wrap up in three days, and run a full scale restaurant like it’s been there forever.”
Although Aces caters to the upper-class health-conscious type, Brown said that the menu has evolved to include many comfort items as well. “At dinner this year, the biggest selling specialty item was a grilled filet mignon. It was really a luxury surf-and-turf, a grilled filet mignon with half of a butter-poached lobster and lobster sauce. This thing is about as rich as it gets!”

Around the same time, RA began to add B&I (Business and Industry) food service customers, almost by accident. One of the first locations they took over was the Ford Foundation. The quality of the food in one of RA’s restaurants led an influential customer to ask them to come and look at their existing food service account, with which they were not very pleased. That request led to their first B&I food service account in 1968 and would lead to many more in the years to come.

“We weren’t the cheapest caterer. It was more expensive to have us. But generally we produced better results. And we were fortunate because some of the people who served on the board at Avery Fisher Hall also served on the board at Kennedy Center in Washington. They were familiar with us and they knew that we lived up to the promises that we would make in terms of these contracts.”

In the meantime RA’s sports entertainment business continued to grow. The successful U.S. Open business led to a contract with the Professional Golfers Association of America, which also led to a relationship with the USGA, the United States Golfers Association. Today RA has about a dozen golf tournaments where they handle the food service. As their success continued in the food service business, one might wonder why other companies were not successfully duplicating their success. While many other companys offer RA’s services, and while some copy their philosophy of ‘we brought restaurant quality food to these venues,’ RA was unique in the respect that they owned many successful restaurants and could back up their ‘restaurant quality’ philosophy. Owning and running 45 restaurants throughout the country also gives RA an enormous amount of resources, which comes in handy when they are creating a 14-day restaurant every year for the U.S. Open. It also allows them to get the best prices from vendors.

Two other major sporting events that RA handles are the Olympics and professional football. After a particularly horrible food experience recently at Giants Stadium, I was hoping to hear that RA would be taking over that gig, but so far it’s not in the stars.

“We do the premium food at two NFL stadiums. One is the Cleveland Browns, and the other is the Philadelphia Eagles. In both cases the ownership is relatively new, by NFL standards, and their ownership wanted something better to enhance the image of their team. So we do all the suites, which in the case of Cleveland is 150 suites. I think there are 130 in Philadelphia. There’s also premium seating, which is a relatively new element in stadiums.”

In 1986, Valenti began to wheel and deal with RA’s vast empire. That year the company, which was then public, was taken private in a leveraged buyout. Four years later, in 1990, the company was sold to a Japanese firm called Kyotaru, and when Japan’s recession caused that company to sell in distress, Valenti bought the company back for $60 million, a fraction of what it was worth.

After selling off two of their major chain restaurants, the still-huge RA was sold to the Compass Group, an international food services firm, for $87.5 million. If you combine this transaction with the chain restaurant sales, which were rumored to be in the area of $50M each, these transactions represented a two-year profit of nearly 300%. In 1999, RA purchased the Patina group which was founded and operated by star restaurateur Joachim Splichal. This was not an unlikely purchase, as RA had already been operating in L.A. for several years, providing food services at the Music Center and catering parties after major events like the Academy Awards, so Patina was actually something of a rival that would often bid against RA. Finally, in 2004 Valenti formed a joint venture and he took back ownership of about half of the assets that he had sold to Compass.

One of Valenti’s crowning achievements has undoubtedly been the founding of the Citymeals on Wheels annual fundraiser event, which RA has hosted since 1984. There was one year, however, when there was construction at Rock Center and the event was moved to the Metropolitan Opera.

Franklin Becker
Executive Chef
Brasserie

Before coming to RA in November 2005, Chef Franklin Becker worked at Capitale, Local, Mesa Grill, and Trinity at the Tribeca Grand. He has also been private chef for Ronald Perelman, and has helped Philadelphia restaurateur Stephen Starr oversee his Atlantic City restaurants Buddakhan, Continental, and Beach Bar. At Brasserie, he has once again demonstrated his ability to fuse a bold use of flavor to classic French brasserie cuisine.
When he was young, Becker volunteered to take over his mother’s cooking duties when she became ill. As a teenager, while working as a busboy at a local Italian cafe, he filled in for an absent chef and was immediately promoted to cook. After finishing school at Brooklyn College, he went on to get formal culinary training at the Culinary Institute of America.
When Becker found out just after finishing school at the CIA that he had diabetes, he thought that his culinary career might be over. But he learned how to eat very well despite his illness, and in 2005 Becker wrote a cookbook called The Diabetic Chef, which features recipes for people with diabetes.

“We had all the best Italian chefs from America as well as about 10 of the best chefs from Italy, and it was kind of a face-off. This was really an over-the-top event because we had these chefs cooking on the different tiers at the Metropolitan Opera. We also had a fashion show that took place during the celebration. And then we auctioned off the dresses. And it was a masked ball. So there was a lot going on that night, so this year we’re going to do Tutto Italia II. We’re not going to make it a costume ball though, we’re going to have our core chefs that have been coming for 25 years. Then we’ll bring in a dozen chefs from Italy and all the best Italian/American chefs from the United States.”

Restaurant Associates has always liked to go into landmark locations such as the MetLife building, the Seagram building, or Madison Square Garden - places that won’t be going anywhere soon, places that have staying power. But I had read in a previous interview that Valenti said that ‘you won’t find us on a side street of Tribeca,’ and I asked him if he had changed his mind about that.

“That’s the problem when things are written down, someone like you comes around and wants to know why! Yeah, I think the answer is yes, it’s going to change, but of course the side streets have changed too. I think that some of the neighborhoods in Manhattan have developed into something fairly significant. Take Soho as an example. It’s no longer just a New York neighborhood, it’s an international destination. And along with those visitors comes business, so that’s a good thing. So we would look at some of these other locations as well, where we might not have considered those in the past, like downtown, and especially the upper west side. There’s a lot of opportunity up there.”

All right, so you’re the largest restaurant group in the country. Does that mean that it’s easier for you than for others to find new locations in a tight real estate market?

“We have a couple of brokers that we work with in town, but generally we get calls directly from landlords who are looking for a tenant that has a track record. We also get offered a lot of locations because of our different relationships. The people on the board of one of the museums or performing arts centers will be in the real estate business. Tishman Speyer Realty is our landlord here at Rock Center, and they’re one of the largest real estate holders in Manhattan, so if they have an opportunity they’ll call us directly.

We continue to look at restaurants that are a part of either a real estate development or an institution. But we’re looking at something right here in midtown now, which is just a space. It’s in an office building, but it’s a restaurant opportunity and it’s not necessarily connected either to another venue or an attraction of some kind. And space is harder and harder to come by.”

When Patina was purchased by RA, there was some industry speculation that New York firms might start buying up L.A. restaurant properties. While that talk soon died down, I asked Mr. Valenti what would stop a huge company like RA from approaching other ‘star chef’ restaurant groups such as Daniel, Jean Georges, or Laurent Tourendel for instance, and purchasing them as well?

“The most important thing when you acquire companies, whether it’s this business or any other business, is whether the cultures match. If culturally they’re very different, it’s going to be difficult. With Patina, Joachim Splichal and I had shared the same philosophies and values, which was to produce high quality experiences. You have to make sure that your partners, whether you’re looking at the big company side or the small entrepreneurial side, share those values, because there is life after the transaction.”

Now that Valenti’s big deal making seems to be slowing down a little, he seems to be emphasizing the restaurant business, and lately RA has opened several new establishments and food service accounts.

“We’ve done a couple of new things recently. We’ve opened up food service in a Palm Springs hotel in California. We’ve created a restaurant for Opus Entertainment in Nyack. And we opened up a new restaurant in Washington D.C. called Drinks. We are currently looking at a couple of locations here in Manhattan for new restaurants. We haven’t made the deals yet, but wherever we get the right partnership with the right landlord, the right deal and the right location, we’ll do that.”

Overall, Nick Valenti has a lot to look forward to. Not only on a personal level, where he is now a grandfather for the first time, but also on a business level. He sees vast potential in New York, and draws a parallel between the success of his businesses and the retail business. When department stores and specialty retailers are doing well, that helps the restaurant business as well.

“I see a terrific future for the restaurant industry in New York City. I think it’s going to continue to flourish, and people are going to want to come to New York. The city has done a phenomenal job of attracting business. NYC & Company, has done a terrific job in terms of getting the message out. And the other thing is that it’s a relative bargain. Compared to going to London, where you can’t afford a hotel room and the restaurants are expensive, I think New York City is quite attractive to visit, both domestically and internationally.

“Hospitality at the end of the day is word of mouth, and providing service that is a cut above the rest drives repeat business. It drives word of mouth. I tend to think in terms of interacting with guests and then following up with the Internet. We need to talk to our customers directly, whether it’s in the store, and hopefully it’s in the store, but beyond that to communicate with them over the Internet or in a letter and try and speak to them one-on-one. The easiest and best thing is in the store. Because you don’t have to convince them to come either from their home or from their business, because you already have them, and I think you have that opportunity to make an impression. I think that’s the most valuable thing that we can do.”





           

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