Inflation, high rents and a perception that crime is a problem have been pushing restaurants out of Fells Point as business owners struggle to recover from the devastating after effects of the pandemic.

Four restaurants in the neighborhood have closed their doors since the first of the year alone.

First came Baja Tap, a one-year-old Mexican restaurant and bar on South Bond Street, which shuttered Jan. 3. Cocina Luchacoras, a beloved family-run Mexican eatery on East Lombard Street, followed five days later after eight years in business.

Bondhouse Kitchen, a Southern cuisine hotspot that was also on South Bond, went under on Jan. 12 after four years in operation, and Riptide, a seafood outlet with live music and animated crowds every weekend, closed on Jan. 15 after six years on Thames Street.

Owners of the businesses — two of them family-owned, two run by out-of-town companies — were grasping for answers last week, and so were observers of the beleaguered industry.

“You can talk to 10 experts, and you’ll get eight or nine different stories,” said Joe Spinelli, president of Restaurant Consultants, Inc., a College Park, Md., which specializes in restaurant development. “It’s usually not one thing, it’s a combination.”

“Part of it is the economy, including inflation and high costs,” he added. “People’s disposable income is less now. And Baltimore is always a tough market, but it also has a bad brand name due to the perception that it’s high-crime. The murder rate may be down, but very few people are actually saying that. That makes it even harder.”

Couple that with an notoriously tough industry, where 60 percent of restaurants fail in their first three years, a study by Ohio State University found, and many restaurateurs are scrambling to stay afloat.

As goes Baltimore, so goes the nation

It isn’t just Fells Point restaurants, or even Baltimore restaurants, that are feeling a financial crunch.

The cost of food rose rose 29% in the hospitality business across the United States between 2020 and 2024 even as labor costs jumped 31% — and at a total of 33 cents for every dollar earned, those are the two most significant line items for any restaurant, according to the National Restaurant Association.

The cost of supplies was also up 20 percent and the cost of occupancy 12 percent, the association reported last year.

The combination hit restaurateurs hard. Owners had to hike their menu prices by an average 27% to keep their already slim profit margins above the bare minimum break-even figure of 3.5%, according to data supplied by the Bureau of Labor Statistics.

All that combined to squeeze a sector already struggling to claw its way back to profitability in the wake of the pandemic. The food-service industry lost more than $200 billion in 2022 alone, association figures show. And about 1 in 6 restaurants nationwide, totaling roughly 100,000, were wiped out.

Though the number of operational restaurants in Maryland held steady at about 10,000 over the past decade, Baltimore saw a decline during the span, Marshall Weston, the president of the Maryland Restaurant Association, told The Baltimore Sun last fall.

That doesn’t surprise Justin Brockmeyer in the least.

“Everything changed during Covid,” said Brockmeyer, who owned and ran Riptide Seafood. “The world changed. The entire service industry changed. People got used to not going out anymore. And with a downturn in the economy, and that’s something that can happen at any time, people have less money to spend. We really haven’t gotten over it.”

Baltimore is always a difficult market for a number of reasons, Spinelli says, especially in comparison to “recession-proof” cities like Washington.

Competition is strong, startups usually come thick and fast, and in an industry that has such small profit margins, location becomes exceptionally important.

Locales such as the Inner Harbor and Federal Hill may have higher prices than the average, Spinelli says, but they’re heavily frequented by out-of-town tourists, and that can make all the difference, whereas a close-knit neighborhood like Fells Point may rely more heavily on a local customer base.

That, experts say, places more emphasis on the nature of the neighborhood. In the best of times, that’s good news for Fells Point, a part of the city with a seafarers’ pedigree, proximity to a waterfront, and streets that exude Colonial charm.

But those can lose their appeal when safety becomes a concern, and most agree that a perception exists that crime is a problem in Fells Point.

Crime or not, patrons are wary of the city

Brockmeyer and Rosalyn Vera, the owner of Cocina Luchadoras, agree that city crime prevention tactics such have had a strong positive effect, including beefed-up police patrols and increased law enforcement presence.

Vera raved about the strong support her restaurant received from a loyal surrounding community, which she said was enhanced by the city’s city efforts.

And her observations lined up with Mayor Brandon Scott’s view.

“Inflationary costs, rents in prime neighborhoods, changes in the industry since COVID, and the competitiveness of Baltimore’s culinary scene all absolutely play a role in the natural changeover of restaurants and bars in prime neighborhoods like Fells Point,” his office said in a statement it shared with The Baltimore Sun.

“Given the historic reductions in violence that Baltimore is seeing, blaming crime or perceptions of crime for having an outsized influence on Fells Point restaurants is disingenuous and does not align with the broader trends and feedback we’re seeing,” it read.

Brockmeyer sees things differently.

In his view, crime did spike in and around the neighborhood during the pandemic, and that hasn’t fully faded away. And though police efforts have been effective, he believes word hasn’t gotten out that things are “safer than people think.”

“I don’t know why, but if there’s a shooting or a robbery anywhere around us, it gets reported as happening in Fells Point,” he said. “I got a call from my parents a while ago. They said, ‘There was a carjacking near you; are you okay?’ It happened 20 blocks away! People in the county hear about crime here, and if they’re going out, they’re looking for bars in their own neighborhoods.”

That makes sense to Spinelli, a Harford County native who has owned restaurants in Baltimore. His properties have included Ida B’s Table, a soul-food hotspot near War Memorial Plaza just north of the War Memorial Plaza that closed operations two years ago.

He agrees from his perspective outside the area that, true or not, Baltimore in general, and Fells Point in particular, have reputations for being the kind of places that families tend to avoid.

“The city has been trying these new programs, investing in crime prevention, and they seem to be helping,” he said. “I’ve seen the mayor and chief of police talking about it, and that’s a big thing. They’re doing the work. But I don’t think people are getting it. They’re not sending the right message. They need to market it better, show people what they’re doing.”

Brockmeyer said he thinks it could take “a couple of years” for the message to get out. He’s hoping the city will sponsor festivals or other fun events in Fells Point to spread the word that things are better.

A tough industry struggles to adjust

Even in the best of times, it’s a tough industry, Spinelli said, one that requires a lot more capital than people realize. He spent $2 million on Ida B’s, for instance, only to see it fall short in 2023 for reasons ranging, in his view, from location (it was a few blocks away from the most well-traveled harbor areas) to inexperience on the part of restaurant staff early on.

Vera is one of the many restaurateurs who, in his words, can often find themselves spending a lot of time “borrowing from Peter to pay Paul.”

After Covid in 2020, Cocina Luchadoras “made it through,” she said, in part thanks to a pair of $1,000 grants out of a $250 million relief from the Maryland Department of Commerce provided for restaurants in the state that year.

“But things are still getting more expensive. Costs are like the stock market: every day is different,” she said “Sometimes eggs are $100 a case. Every year, my rent goes higher, but that doesn’t mean my sales go higher.”

For two years, she said, she had to help pay her five employees out of her own pocket.

“There’s no way, after two years, to be able to sustain all the expenses. I tried, I tried, I tried.”

The restaurant entered an arrangement with nearby Saunter Corner Bar on January 6 and now serves its fare there during lunch hours. All five of Vera’s employees are still with her.

The owners of Baja Tap and Bondhouse Kitchen, both out-of-town companies, did not respond to requests for comment for this story.

For their part, though, owners like Brockmeyer and Vera are keeping their spirits up.

Brockmeyer will return to business in Fells Point after taking at least a few months off to rest, he said, and a positive early response from customers old and new at Saunter Corner Bar has Vera feeling hopeful.

She hopes to offer Saturday and Sunday brunches in the space soon and plans to keep expanding Cocina Luchadoras from there.

“”It’s inspiring how everyone in the industry here in Baltimore is supporting each other,” she said. “And more than anything I love offering great food and a great experience to the community. I’m not giving up.”

Have a news tip? Contact Jonathan M. Pitts at jonpitts@baltsun.com.