A ‘Perfect Storm’ Leaves Hamptons Restaurants Scrambling for Staff

(Bloomberg) -- Later this year, the iconic Amagansett seafood shack Lobster Roll will open the first new location in its 55-year history. The outpost will have the same name and occupy the former Silver Lining Diner on the Montauk Highway in Southampton, N.Y. 

It’s not opening to summer crowds, however. The Lobster Roll will wait until September to begin welcoming customers, in part because there isn’t enough staff. One of the owners, Tilray Inc. Chief Executive Officer Irwin Simon, suggested opening on July 1 to cater to high-season demand, but that wasn’t an option. “Even if there [were] staff, they’ll all have jobs by then,” says co-owner Andrea Anthony. 

The staffing shortage is also affecting their flagship, a Hamptons destination long before it featured in the Showtime melodrama, The Affair. For the first time in more than five decades—apart from last year’s pandemic-related closing—the Lobster Roll will be shut on Tuesdays, because there aren’t enough employees to dish out seafood seven days a week.

The national restaurant staffing deficit will be especially acute in the Hamptons, where factors that range from a lack of housing to the dearth of rental cars are exacerbating matters. 

The shortage is occurring despite advance efforts to recruit cooks, general managers, and bartenders. “Every year, seasonal hiring for the Hamptons started at the end of April,” says Alice Cheng, founder of Culinary Agents, a restaurant placement agency. “This year, we saw recruiting starting strong in February.”

Mark Smith, managing partner at the Honest Man Restaurant Group, which includes Nick & Toni’s, says that its Rowdy Hall will stay open only five days a week, instead of seven, unless more people can be found. “Workers that are tipped or hourly—the economics are hard to justify when [they’ve] got to spend over 50% of what [they’re] making on living in one room.”

When Honest Man held its first job fair this year, only about a dozen people showed up. Smith hasn’t had luck getting the children of second home owners here to work the dining room. “Rich brats—that doesn’t happen much. It just doesn’t seem to be what they’re doing.”

A Shortage of Housing

Marc Miller, who operated the popular Bay Kitchen Bar and just opened the modern-Mexican eatery Rita Cantina in the Springs, says the Hamptons’ housing crunch is the biggest problem. “The rental housing stock has disappeared,” he says.

For the larger workforce, houses that traditionally functioned as rental stock—six- or seven-room homes that could house a kitchen brigade or waitstaff in less desirable parts of town—have disappeared. People escaping New York “had money to buy crappy houses in areas they never would have looked at before,” says Miller. “They knocked them down and built something nice.” 

Patrick McLaughlin, associate broker for Douglas Elliman in the Hamptons, agrees. “There’s no housing,” he says. “A few seasons ago, a six- bedroom, six-bath in East Hampton Springs that went for $75,000 for the season—it’s gone.” He says prices in the area are up 30% year over year. In the past, McLaughlin helped find stock housing for major New York restaurants opening in the Hamptons. “I couldn’t help them this year,” he says.

Some restaurants, like East Hampton’s power dining room Highway, provide housing for employees. Others are dealing with the realities of this year’s market. The new Il Buco al Mare on Main Street in Amagansett, an offshoot of the popular Manhattan spot, have workers contribute an undisclosed amount toward housing. “We are renting two houses and an apartment for our team, and are able to subsidize a substantial amount of the costs (nearly six figures worth),” says Marc Ellert-Beck, Il Buco’s director of restaurants.

A ‘Perfect Storm’

Justin Finney, chef de cuisine at Highway, has dealt with hiring in the Hamptons for 15 years. “This year is by far the most difficult,” he says.

He believes that the repercussions from the pandemic have created a “perfect storm.” The extension of unemployment benefits is one reason, but he, too, counts housing as a major issue. “There’s very little affordable housing for the backbone of the restaurant: the bussers, the dishwashers, the line cooks.”

The seasonal workers who would historically come from a winter working in high-rent ski areas such as Aspen, Colo., aren’t coming, either. “They used to follow the money,” he says. “But it doesn’t make sense with what the cost of living out here has become.”

Added to that is a question of transportation. “If we can find someone to work, they have to come from at least Hampton Bays, which is 30 to 40 minutes away, and there’s no public transportation system in place to get them here. So they’ll find work in Hampton Bays.”

Some of those workers migrated to other businesses that boomed in the Hamptons during the pandemic. “When people lost restaurant jobs, they went to landscaping, or construction—anything that was still operating. And that money is good. There’s so much construction now.”

The spike in home improvement has exacerbated another perennial Hamptons problem that’s become a particular headache for restaurateurs: traffic. “With all the landscaping vehicles, it’s taking people two or three times longer to get anywhere, and it was already bad,” says Finney. “It’s also caused a blanket increase in what we’re paying hourly. It’s gone up $3 to $4 an hour in the last 12 months—not even to incentivize them. It’s what they’re asking for.”

He says the increased wage demands are not for someone with Michelin-star experience. “This is someone you need as a line cook, and they’re asking for more money. It’s challenging for a restaurant that is already having trouble surviving, based on such narrow profit margins.”

Miller echoes the traffic concerns. “Getting people up island to work can take 1 ½ hours,” he says of the commute from a more centrally located, less pricey town such as Manorville, N.Y. “It can take an hour to go 10 miles.”

No Visas, Big Problems

For David Hart, chef at the popular Sag Harbor taco spot K Pasa, yet another problem is the lack of  overseas workers, who traditionally came over on J1 work visas. Those were suspended in June 2020 by President Donald Trump during the pandemic. The suspension ended early last month, but not in time for many potential job hunters. Normally, Hart receives around 100 emails from applicants in Eastern Europe and Jamaica. “This year, we got one, and even that didn’t work out,” says Hart. 

The consequences of the staffing shortage is that he’ll have to close one of three seating areas for most of the summer. “If it’s nice out, we’ll only open the bar and outdoors; if it’s not nice, only the bar and indoors. Normally, when it’s great weather, you make $15,000 to $20,000 revenue a day. This summer, it will be $9,000 to $10,000—about a 30% loss.” Hart is considering an end-of-season bonus to incentivize workers to stay, even as he is starting to lose dishwashers to families who have arrived for the summer, looking for babysitters. “They pay twice as much. In cash,” he notes.

Jenny Escalante, manager at Main Street Tavern in Amagansett, says the national car shortage is the issue plaguing her efforts.  “I’ve reached out to city friends to offer them jobs, but they don’t have a car—and can’t find one.” 

Last spring, Escalante thought a rental car would be her best option for Hamptons work, but “for three months, it was going to cost me over $6,000.” Buying a vehicle, as she did, is not an option for many. “If you haven’t been working, spending several thousand dollars on a car for a job you have for the summer is hard, too.”

And then there’s the challenge of keeping those who do show up because of guest behavior. “A lot of the bigger hitters spent the whole time in Miami and Palm Beach, and they’re used to no rules,” says K Pasa’s Hart. “I don’t know how they’ll behave here, where people have been good about social distancing, but I can’t pay staff enough to police people in the Hamptons.”

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