By the spring of 2010, PYT was showing a profit, and by the summer, Updegrove had paid back the loan. “Bart bet on me and won,” he says. Blatstein hedged his bet by suing Updegrove for $56,000. Though he won the case, he hasn’t pursued the award. “Bart could have pulled the trigger and put me out of business, but he didn’t,” Updegrove says. “He gave me another chance. I doubt many other landlords would have been so patient.”
Patience is indispensable in the Piazza, a nascent commercial zone that some say echoes a headline in The Onion: “Variety of Unsustainable Business Models Make Up Extremely Hip Neighborhood.”
Speck’s own model, according to one source familiar with the deal, was extremely Blatstein-friendly: a monthly rent of about $6,000, in addition to three percent of gross sales, common-area fees and debt service. Blatstein was due to be paid back before any investors—which made running a tight operation essential. Most restaurants are deemed modest successes if they show an eight percent profit, highly successful if they clear 10 percent. Were the 70-seat Speck to be a runaway hit and rack up $2 million in sales during its first year, the net profit might approach $200,000. Of that, Blatstein’s gross percentage would equal $60,000.
CONSTRUCTION ON SPECK was underway around the first week in April 2010. Lakhmna, the general contractor with crews already working in the Piazza, took care of labor and building supplies. Shola raised money for high-tech kitchen appliances—pasta extruders, infrared salamanders—that he would later road-test at StudioKitchen. He hired Robert Amar, a well-regarded veteran of Stephen Starr’s Buddakan and Tangerine, as general manager.
Lakhmna initially told Amar he wanted Speck to open by the end of May. “You’re dreaming,” Amar replied, “but dreaming is good.” The ever-confident Shola announced Speck would open on Memorial Day 2010. “You’re dreaming, too,” protested Amar. “You’ve got to account for building inspections, health certification, and the food-prep and liquor licenses.” He said the Fourth of July was more realistic.
Nevertheless, in late April, despite the absence of a working kitchen, Shola brought in onetime Buddakan and Barclay Prime executive chef Dan Kremin as chef de cuisine. In early May, he enlisted sous-chef Akiko Moorman, a line cook under David Chang at the cutting-edge Momofuku Noodle Bar in Manhattan.
Amar says the first sign of trouble came that month when Lakhmna started laying out significant cash for fabric and millwork. Nearly $300,000 had been spent, and the rough inspection was still a long way off. About $200,000 off, according to Amar. When Blatstein wouldn’t chip in, construction stopped for a few weeks, and no one got paid.
Before contributing anything more, an increasingly testy Lakhmna asked Shola to sign a binding agreement. According to Amar, the document had many of the same stipulations—a no-compete clause, right of first-refusal on future projects—that Lurie was said to have sought. Shola was reluctant to sign, but by the end of June, he and Lakhmna reached an accord and things seemed to be back on track.
Though Kremin was out as chef, construction hummed along until August, when Speck suffered its second financial implosion. “Though the restaurant was hugely over budget, Shola insisted on buying the best of everything,” complains one subcontractor. “He recoiled from decision-making and wouldn’t take responsibility for anything.”