Business Monday

Myles Chefetz, Michael Schwartz dominate Miami’s fine-dining scene

Myles Chefetz is distracted.

One hand clicks a computer mouse as he tries to unload his pair of $1,500 courtside seats to that night’s Heat game. His other hand reaches for a cellphone incessantly buzzing with text messages.

“I’m really just a high-priced reservationist,” joked the owner of Myles Restaurant Group, a four-unit empire in Miami Beach’s South of Fifth neighborhood that includes Chefetz’s goldmine steakhouse, Prime


“Celebrities, athletes, they text me all day asking to get them a table and, ‘Will you be there?’ ” Chefetz said. “And if I’m not there, I feel like I’ve let them down. It’s like I’ve created this prison that I can’t get out of because people expect me to be in the restaurant all the time.”

Chefetz’s lockup is a lucrative one. Prime 112 enjoyed its highest-grossing year to date in 2013, with $23 million in revenue, and Chefetz projects that his total revenue from Prime 112, Prime Italian, Big Pink and the newly opened Prime Fish will hit $45 million this year.

Meanwhile, across town in the Design District, another preeminent Miami restaurateur is conflicted.

Michael Schwartz, chef-owner of The Genuine Hospitality Group (and Chefetz’s former business partner), is about to meet with his core managers to decide whether to change the format of the lunch menu at his flagship, Michael’s Genuine Food & Drink.

“Lunch is incredibly busy, people love it, the check average is high. It’s a restaurateur’s dream, so we don’t want to [mess] that up, but we also don’t want to be afraid to innovate and take chances,” Schwartz said. “We’ve changed the content of the lunch menu, but the format has remained the same since we opened. It works. I just don’t want that day to come when it doesn’t work and I’ll be like, I should have changed the menu.

“We’re in our eighth year at Michael’s Genuine, and every year business ramps up, even through the Design District construction, so you won’t hear any crying from me,” Schwartz continued. “But we always need to be thinking about what we can do to change before we miss the curve and are no longer relevant.”

Lack of relevancy doesn’t appear to be an issue for Schwartz or Chefetz.

Both men steered their restaurants through a recession that dealt a major blow to the hospitality industry. Both dropped their anchors in up-and-coming neighborhoods — Schwartz in the Design District, Chefetz in South of Fifth — that have experienced tremendous booms in real estate. And both have positioned their homegrown Miami restaurant empires for considerable growth in the coming years.

To be sure, Schwartz and Chefetz are not the only ones running successful independent restaurant groups in Miami.

John Kunkel of 50 Eggs Inc. (Swine, Khong River House and Yardbird), and Andreas Schreiner, Jose Mendín and Sergio Navarro of The Pubbelly Restaurant Group (Pubbelly, Pubbelly Sushi, PB Steak, Barceloneta and L’Echon Brasserie) have received critical accolades and earned legions of loyal customers for their concepts.

But in terms of longevity and average check prices, Schwartz and Chefetz dominate the local fine-dining scene.

“They’re two of the most incredible restaurateurs I’ve had the pleasure of working with, not just in Miami but in any city,” said Hedy Goldsmith, executive pastry chef for the Genuine Hospitality Group who previously created desserts at Chefetz’s restaurants. “Michael and Myles are so forward-thinking and ahead of the curve. They never stop working and coming up with the next great thing.”

Chefetz, who struck gold with Prime 112’s modern-steakhouse concept, is looking toward the ocean for his next big thing.

He opened Prime Fish during the South Beach Wine & Food Festival in February. It’s in the former Nemo space (Chefetz’s first Miami restaurant) at 100 Collins Ave., clustered within a block of his other restaurants and his office above Big Pink. Chefetz said he will likely add a sushi restaurant next door to Prime Fish, in the old Shoji Sushi (another of his former restaurants).

This month, Chefetz took over the nearby space at 36 Ocean Dr. that used to house Philippe and Taverna Opa. He’s turning it into Prime Private, an events venue and catering commissary.

Schwartz also is keeping an eye to the sea as he extends his brand’s reach: He announced last month an expanded culinary partnership with Miami-based Royal Caribbean International. Schwartz will create a gastropub concept called Michael’s Genuine Pub for three of the company’s new Quantum-class ships, set to debut in the fall.

Schwartz began his relationship with the cruise line in 2011 when he opened his 150 Central Park restaurant aboard the company’s Oasis of the Seas. He opened a second 150 Central Park last year aboard Royal Caribbean’s Allure of the Seas. Another 150 Central Park is planned for a third Oasis-class ship coming in 2016, bringing Schwartz’s number of at-sea restaurants to six.

“That’s an unlikely partnership for us, because you think of Royal Caribbean as this big company that has no concern for farm-to-table dining or the environment or any of the things that we care about, really,” Schwartz said. “But they do care, and they showed us that by letting us influence their supply chain. They let us get our farmers involved and bring in their products to cook seasonal food, which is sort of unheard-of in the cruise industry.”

Schwartz soon will add to his portfolio of on-land restaurants, too, which includes three in the Design District, one in Miami Beach and one in Grand Cayman. He has teamed with Jorge Pérez’s The Related Group to open a waterfront restaurant at the developer’s planned Paraiso Bay condominium in Edgewater. And Schwartz has been tapped to helm a restaurant in the SLS Brickell coming to downtown in 2016.

“Those deals seem far away but we’re already working on their planning and execution,” Schwartz said. “Very soon, probably the end of this year, I’ll have to start to look at what to do next. But for now, the focus is on those projects plus keeping my team happy, motivated and inspired.”

Schwartz, 49, and Chefetz, 55, said that maintaining strong management teams has been crucial to the success of their companies.

Chefetz, who was born in Miami and graduated from the University of Miami’s law school, got into the restaurant business in New York, where he segued from real-estate lawyer to restaurant-nightclub promoter to restaurateur. When Chefetz opened Nemo in 1995, it was more of a vacation than a business plan.

“I never thought I’d be here year-round,” he said. “I thought I’d run Nemo in the winter, then run my place in the Hamptons in the summer. I thought I had brilliantly created this resort lifestyle for myself. But then Nemo took off right away, it just exploded beyond my wildest expectations. I sold off my New York properties and never went back.”

Along the way, Chefetz and his team have opened new concepts based on what they liked to eat and what they thought customers would respond to.

At Big Pink, which he opened in 1996, that meant retro diner fare served in oversize portions at affordable prices. At Prime 112, they took a shot with a steakhouse that went beyond the typical meat and potatoes. Dishes like truffled mac and cheese and pint glasses full of bacon — now ubiquitous even at national chains — were a novelty in 2004.

Prime 112 became an instant hit, attracting a neverending parade of A-listers arriving in Bentleys and Rolls-Royces. Like at Joe’s Stone Crab, waiting for a table at Prime 112 became part of the experience.

(Of course, not everyone waits. “I once had a lady complain because we seated Michael Jordan right away,” Chefetz recalled. “She told me I would have seated her right away too if she were famous. I wanted to say, ‘You know what? You’re absolutely right.’ But I didn’t.”)

Prime 112 generated so much business that other restaurant operators started to eye the restaurant space across Ocean Drive in hopes of getting Prime’s overflow. Chefetz countered by paying a hefty sum for that space in 2008, turning it into Prime Italian.

“I bought the lease for $2.5 million just to prevent someone else from going in there,” he said. “Prime Italian is a huge beneficiary of Prime 112. People who don’t want to wait or who want a good vantage point to watch the Prime 112 scene, they go to Prime Italian.”

And despite Miami’s flash-in-the-pan restaurant culture, Prime 112 has proven its staying power.

It is perennially listed among the highest-grossing independently owned restaurants in the country. Justin Bieber, who dined there last week, and other star clientele ensure the restaurant’s name is a mainstay in celebrity gossip columns. When LeBron James made his nationally television announcement that he’d be taking his talents to South Beach, future teammate Dwyane Wade was watching from Prime 112.

“As much as a scene as it’s become, Prime wouldn’t be around this long if the food was lousy,” Chefetz said. “But with great food and the right ambiance, you can make it forever. We just had our 10th anniversary, and [Myles Restaurant Group corporate chef] Mike Sabin and his team deserve much of the credit for that.”

Chefetz’s real estate acumen also has worked in his favor, in both business and personal affairs. He owns almost every building where his restaurants are, including the Prime Hotel next door to Prime 112. He paid $7.2 million in 2009 for a penthouse in the Ocean House condominium across from Prime 112; he sold it last year for $15 million, or $3,592 a square foot.

Chefetz and Schwartz worked together in New York, and Schwartz followed Chefetz to Miami to run the kitchen at Nemo, then Big Pink and Shoji. Schwartz eventually brought on Goldsmith as his pastry chef at Nemo, and she rejoined him in 2008 at Michael’s Genuine.

Chefetz and Schwartz parted ways in 2002. (The men had philosophical differences about expansion, with Chefetz looking to open Nemo and Big Pink units across South Florida, in New York and Las Vegas. He later retreated and focused on his corner of South Beach.)

Schwartz had a string of flopped kitchen stints in South Florida before pouring everything he had left into opening Michael’s Genuine in 2007.

Like Prime 112, Schwartz’s namesake restaurant gained immediate national attention. Esquire magazine and The New York Times called Michael’s Genuine one of the country’s best new restaurants.

The glowing press, and Schwartz’s diehard commitment to locally sourced, ingredient-driven food, helped keep seats full through the down economy. In 2010, he was named the James Beard Foundation’s best chef in the South, a pinnacle honor for a chef.

“That provided some confidence that I don’t think I had at the time,” Schwartz said of the Beard award.

The momentum propelled Schwartz to open Harry’s Pizzeria in 2011, named after his son. Schwartz also formally launched his Genuine Hospitality Group to coincide with the opening of Harry’s. (Harry Schwartz’s gluten-free diet inspired Harry’s to recently begin offering gluten-free pizzas.) Besides offering its own menu of pizzas, salads and craft beer, the restaurant hosts frequent pop-up nights where guest chefs from out of town come in and cook their food in Harry’s kitchen.

Last year, sensing that the city needed a serious fine-dining establishment, and to get ahead of the Design District’s transformation to high-end retail, Schwartz opened the Cypress Room. Unlike Michael’s Genuine or Harry’s, the Cypress Room has tablecloths and fine china and a tasting menu that costs $155 with wine pairings.

“Look, we didn’t invent farm-to-table at Michael’s Genuine, and we didn’t invent fine-dining at Cypress Room,” Schwartz said. “But the restaurant scene has gotten to the point where if I see another Edison bulb and bare table and pork-centric menu, I’m going to flip out. So we wanted to slow things down and offer our guests something at Cypress Room that has become a bit of a lost art in the current climate.”

Schwartz said sales and profitability continue to increase year over year at his properties. Revenue at Michael’s Genuine was up about 6 percent last year compared to 2012, and Harry’s saw double-digit growth near 20 percent.

Schwartz credited his management team for allowing him to step out of his kitchens and grow his business.

“I think I’m a good cook and a pretty creative person, but I would never say I’m a great businessman,” he said. “Having people like [director of operations] Charles Bell and [executive chef] Bradley Herron gives me the room I need to figure out the business side of things.”

A challenge, Schwartz said, is for his team of restaurant veterans to grow their roles within the company.

“Our beverage director, Ryan Goodspeed, started with us as a bartender,” Schwartz said. “Now he’s in charge of all of our ordering, receiving, pricing, menus and beverage staff. And I know there are days when he’d rather just get behind the bar and make drinks. There are definitely days when I’d rather be cooking than running the business.”

Schwartz and Chefetz said their restaurants benefit from being clustered close together — Schwartz’s three in the Design District and Chefetz’s four in South of Fifth.

Every day, they make rounds to each restaurant. Schwartz checks in on staff and looks for opportunities to coach employees or give a pat on the back. Chefetz tastes the cole slaw at Prime Fish, the sauces at Prime 112, the soup at Big Pink and the meatballs and bread at Prime Italian.

“I try to taste the things that are going to be in front of the most customers,” Chefetz said, adding that his restaurants can serve a combined 4,000 meals in a day. “Everyone gets the garlic bread at Prime Italian, and most people order the meatball. So I taste those things, and it makes me feel better about the world, at least for one night.”

By 9:30 p.m., Chefetz is in place at Prime 112, shaking hands with the early crowd that’s paying up and with the late guests just coming in. He waits to eat his dinner until 1 a.m., after the last customers have left.

Goldsmith said Chefetz helped transform South of Fifth just as Schwartz has helped reshape the Design District, both of which were mostly barren when they moved in.

“I’m so blown away by what Myles has created in his South of Fifth neighborhood,” she said. “And it makes me so happy to see the way that the Design District has sort of grown up around us and with us at Michael’s Genuine. Those two areas would not be what they are today if not for the vision and dedication of Michael and Myles.”

Florida’s nearly 38,000 restaurants and bars are projected to generate $34.7 billion in sales this year, according to the National Restaurant Association.

Carol Dover, president of the Florida Restaurant and Lodging Association in Tallahassee, said independent, multiunit restaurant operators like Chefetz and Schwartz “are critical to our industry.”

“A lot of times a restaurant owner is afraid to open a second location because they’re afraid they won’t be able to put in the hours that made them successful in the first place,” Dover said. “To be able to say, ‘I am confident this concept will work, and I have the right team to execute it’ is a big, big step for a restaurateur.”

With their confidence secured and their teams in place, Schwartz and Chefetz say they are poised to build their businesses while maintaining the level of quality and consistency that got them where they are.

But don’t expect them to stop being in their restaurants.

“People see the owner and it makes them think their steak tastes better,” Chefetz said. “I get that, and I never want to let them down. They’re the reason I’m still here.”

Follow @EvanBenn on Twitter.