Byline: By danny hakim section: Section B; Column 0; Metropolitan Desk; Pg. 1 Length

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881 of 1231 DOCUMENTS

The New York Times
April 9, 2008 Wednesday

Late Edition - Final

Wine Bars Grow Up and Squeeze In
BYLINE: By ERIC ASIMOV
SECTION: Section F; Column 0; Dining, Dining Out/Cultural Desk; Pg. 1
LENGTH: 2158 words
IT was a Wednesday night around 7:30 and Casellula, a small, boxy wine bar in Clinton, was filling up. Patrons packed the seats at the small polished wood bar and the inexpensive wood tables, trading sips of wine, sharing beautifully composed cheese selections and passing plates back and forth.

No sharing for me, though. My open sandwich, made with morcilla, a delectable Spanish blood sausage, layered over multicolored roasted peppers, was too good to sacrifice a bite. I washed it down with a gutsy aglianico del Vulture, a nice combination, and hungrily eyed an intriguing dessert selection, French toast pudding, made with applewood-smoked bacon and spiced maple syrup.

No question about it, wine bars are no longer what they used to be. Throughout the restaurant-saturated precincts of New York, wine bars have been proliferating like latter-day Starbucks, purveying their wines by the glass and simple bites with typically homespun charms.

At last count, nywinebarguide.com, a Web site devoted to tracking the city's wine bars, had found 131 in the city, although Ray Kasbarian, its chief executive, conceded that the number was out of date.

Most of them seem stamped out of the now ubiquitous Italian mold, offering platters of salumi and cheese, panini and a dozen glasses of red and white.

But many, like Casellula, have stepped it up, forging identities that distinguish them from the more mundane masses.

Xai Xai, on West 51st Street, a block away from Casellula, specializes in South African snacks served with South African wines. It, too, is often packed.

Cafe Katja on the Lower East Side has an excellent list of Austrian wines and bites like soft, fat pretzels served with two mustards and a tangy cheese spread.

Pata Negra in the East Village serves Spanish hams -- glistening jamon Iberico is among the world's great delicacies -- cheeses and tidbits, with Spanish wines, of course.

Gottino in the West Village has an Italian theme, but its creative menu goes way beyond the salumi-and-cheese places, with enticing dishes like sweet-and-tart beets, cooked in parchment and bathed in a bright horseradish sauce.

Paradoxically, wine can sometimes seem like an afterthought. Too many wine bars have inconsequential selections, as dull as another plate of stale prosciutto. But the good ones always offer something to intrigue even the most jaded palate.

At Cavatappo, a storefront on the Upper East Side barely bigger than a breadboard, the selections on a recent visit included a couple of earthy lambruscos, and while the nibbles are largely Italian, the wines include the superb Gaia Thalassitis, from the Greek island of Santorini.

Solex, a cavernous French-themed place in the East Village, offers wines from lesser-known appellations like Arbois and Savoie, along with good selections from Austria and Germany.

Black Mountain Wine House in Carroll Gardens, Brooklyn, has an eclectic assortment that includes Montevertine, the superb Tuscan producer, and R. Lopez de Heredia, a singular Rioja.

Well-known chefs and restaurateurs have jumped in. Jody Williams, chef at Morandi in the West Village, is the chef and a partner in Gottino. Marco Canora and Paul Grieco of Hearth and Insieme have opened Terroir in the East Village. Blue Ribbon has a wine bar on Downing Street. The biggest name of all of them, Daniel Boulud, has opened Bar Boulud, a wine bar more in name than style.

With so many wine bars opening, standing out from the crowd has resulted in some unexpected blends of genre. Ayza on West 31st Street bills itself as a wine and chocolate bar. The sign for Buceo 95 on West 95th Street reads ''Vins/Tapas.'' And Brian Keyser, an owner of Casellula, insists, ''We don't think of ourselves as a wine bar; we're a cheese bar.''

Where wine bars were once a novelty in New York, their very unremarkableness today indicates how they've become an accepted part of the New York landscape, local hangouts like the corner bar or the coffee spot. It was different 25 years ago when the opening of a wine bar here was seen as a sign of cultural arrival.

Bartenders tended to preface each glass with extended lectures on winemaking techniques or soil content. With great self-satisfaction wine bars would spotlight their gadgets, like the Cruvinet, which supposedly kept open bottles fresh by enveloping them in nitrogen, hence avoiding oxidation.

Consumers were encouraged to order wines in academically inspired flights, with names like Three Sides of Cabernet Sauvignon or A Study in Riesling. They seemed aimed more at teaching customers that wine was gravely important rather than satisfying them.

Most of these early places lasted a few years and closed. A new wave would open and the cycle would repeat.

It wasn't until the late 1990s that a different kind of wine bar took root in New York. Relaxed, unpretentious Italian places like 'Ino on Bedford Street and Bar Veloce and Il Posto Accanto in the East Village familiarized New Yorkers to words like panini, tramezzini and quartino.

There was no proselytizing, no lectures. They simply served wine and let customers set the pace.

The low-key vibe and the easy prices made these places appealing to consumers regardless of their wine orientation, especially to women who wanted to avoid the testosterone-driven pickup scene at bars. That is still true today.

But far more crucial to the latest wave of wine bar openings has been the soaring cost of opening a restaurant in New York City.

''Economics is the overriding factor,'' said Mr. Grieco, an owner of Hearth and Insieme, who just opened Terroir on East 12th Street. ''A wine bar can fit into a footprint that a restaurant couldn't. The cost of real estate, the cost of labor, all the equipment that you need to get a restaurant up and going: a wine bar allows an aspiring restaurateur entree without breaking the bank.''

Less than a block from Terroir, my friend Rafael Mateo opened Pata Negra in February. Mr. Mateo had long nursed a desire to open a restaurant while he worked as a schoolteacher in East Harlem. Finally in 2006 he made the break, first overseeing the wine program at La Nacional on West 14th Street, then managing Ostia, a tapas bar in Greenwich Village.

But he thirsted for a place that would be entirely his own. A full restaurant, though, would overstep his bank account.

''Unless you're a known chef or have financial backers, you're more out of your mind opening a restaurant than becoming a schoolteacher,'' he said.

Working within his small budget he found a storefront with an affordable lease on East 12th Street. Gas ranges and the venting they require are an enormous expense, so he restricted himself to an electric convection oven and a sandwich press. No more than three people, including himself, work at any one time.

His vision was based on the small Barcelona bars he fell in love with years ago, specializing in, as he put it, ''beautiful sliced ham, beautiful cheese and great wine.''

''In the first month I broke even, which any restaurant owner will tell you is a dream,'' he said. ''That's beyond successful to me, and in March I doubled what I did in February, which is great.''

Mr. Keyser of Casellula had also wanted to open his own restaurant. Eight years in fine dining establishments like Chanterelle and the Modern had fatigued him, but he too had to rein in his ambitions to fit a realistic Manhattan budget.

''A full kitchen was not reasonable,'' he said. ''A lot of square feet was not reasonable.''

The potential for savings is not lost on restaurant entrepreneurs like Jim Mamary, who owns six restaurants in Brooklyn, including Patois, Pacifico and Pomme de Terre. He opened Black Mountain Wine House with the idea of eliminating as many expenses as possible, so he has no gas, no heat except the fireplace, one dishwasher and no prep cooks.

''It's amazing how you can control your costs,'' he said.

While wine is no longer treated as pedantically as before, the educational impulse can still be felt. Most wine bars typically pour tastes of several wines so customers can decide which to order, and they are poised to offer information as requested.

Social barriers are even broken as complete strangers offer one another tastes from their glasses. Meanwhile, proprietors like Mr. Grieco of Terroir are simply becoming more creative in how they dispense information.

''I think we've become a lot more subversive in our application of knowledge to guests,'' he said, with more enthusiasm than can be contained in Terroir's 500 square feet. Plans for T-shirts of wine heroes, wine bingo and wine merit badges spill out in rapid succession. ''If you don't offer education I don't think you're a wine bar,'' he said.

While most wine bars are concentrated in outlying neighborhoods, the mystery, said Tyler Colman, who follows wine bars on his blog drvino.com, is not why the Lower East Side may be the wine bar capital of America, but why there are so few wine bars in Midtown Manhattan.

''You would think people would be spilling out from offices,'' he said. ''As profitable as they may be, there are limits. Obviously, selling coffee is more profitable.''

Recipe: Beets With Horseradish Cream Adapted from Jody Williams Time: About 1 hour, plus overnight refrigeration

1 pound small or medium red beets, washed and stemmed

1 bottle dry red wine

1 cup sliced shallots

2 garlic cloves, peeled and crushed

2 bay leaves

3 sprigs of thyme

Cracked pepper

Salt

1/2 cup extra virgin olive oil

1 piece fresh horseradish

1 cup creme fraiche.

1. Place beets in a saucepan, cover with water and boil until soft, about 45 minutes. Drain beets, let them rest until cool enough to handle, then peel and dice them. Place in bowl.

2. While beets are cooking, pour wine into another saucepan, add shallots, garlic, bay leaves, thyme and cracked pepper. Boil over medium-high heat until reduced by half, about 20 minutes.

3. Pour wine marinade over beets, add salt to taste and drizzle with extra virgin olive oil. Stir, cover and refrigerate overnight.

4. The next day, heat oven to 400 degrees. Place beets and marinade in center of a 12-inch square of foil or parchment. Fold foil or parchment over beets and crimp edges together to seal. Bake 12 minutes, until beets are warm.

5. While beets bake, grate 2 tablespoons of fresh horseradish and mix with creme fraiche and a pinch of salt. Serve beets warm with creme fraiche on the side.

Yield: 4 servings.

Recipe: Walnut Pesto Crostini Adapted from Jody Williams Time: 15 minutes

1 cup shelled walnuts

1/4 cup grated Parmesan cheese

1 garlic clove, peeled and crushed

3 sprigs of thyme, cleaned

Salt

Splash of sherry vinegar

1/3 cup extra virgin olive oil

2 tablespoons minced sun-dried tomatoes

1 loaf country bread, sliced.

1. In food processor, coarsely grind walnuts, cheese, garlic, thyme, salt and vinegar. Stir in oil and tomatoes.

2. Grill or toast bread. While hot, top each slice with a heaping teaspoon of pesto.

Yield: 12 servings.

Recipe: Beets With Horseradish Cream Adapted from Jody Williams Time: About 1 hour, plus overnight refrigeration

1 pound small or medium red beets, washed and stemmed

1 bottle dry red wine

1 cup sliced shallots

2 garlic cloves, peeled and crushed

2 bay leaves

3 sprigs of thyme

Cracked pepper

Salt

1/2 cup extra virgin olive oil

1 piece fresh horseradish

1 cup creme fraiche.

1. Place beets in a saucepan, cover with water and boil until soft, about 45 minutes. Drain beets, let them rest until cool enough to handle, then peel and dice them. Place in bowl.

2. While beets are cooking, pour wine into another saucepan, add shallots, garlic, bay leaves, thyme and cracked pepper. Boil over medium-high heat until reduced by half, about 20 minutes.

3. Pour wine marinade over beets, add salt to taste and drizzle with extra virgin olive oil. Stir, cover and refrigerate overnight.

4. The next day, heat oven to 400 degrees. Place beets and marinade in center of a 12-inch square of foil or parchment. Fold foil or parchment over beets and crimp edges together to seal. Bake 12 minutes, until beets are warm.

5. While beets bake, grate 2 tablespoons of fresh horseradish and mix with creme fraiche and a pinch of salt. Serve beets warm with creme fraiche on the side.

Yield: 4 servings.

Recipe: Walnut Pesto Crostini Adapted from Jody Williams Time: 15 minutes

1 cup shelled walnuts

1/4 cup grated Parmesan cheese

1 garlic clove, peeled and crushed

3 sprigs of thyme, cleaned

Salt

Splash of sherry vinegar

1/3 cup extra virgin olive oil

2 tablespoons minced sun-dried tomatoes

1 loaf country bread, sliced.

1. In food processor, coarsely grind walnuts, cheese, garlic, thyme, salt and vinegar. Stir in oil and tomatoes.

2. Grill or toast bread. While hot, top each slice with a heaping teaspoon of pesto.

Yield: 12 servings.

URL: http://www.nytimes.com
SUBJECT: DRINKING PLACES (94%); RESTAURANTS (89%); WINE (89%); RESTAURANT REVIEWS (89%)
PERSON: HILLARY RODHAM CLINTON (91%)
GEOGRAPHIC: NEW YORK, NY, USA (87%) NEW YORK, USA (87%) UNITED STATES (87%); GERMANY (79%); GREECE (65%)
LOAD-DATE: April 9, 2008
LANGUAGE: ENGLISH
GRAPHIC: PHOTOS: A NEW THIRST: At Gottino in the West Village, creative dishes complement the wine list. (PHOTOGRAPH BY ALEX DI SUVERO FOR THE NEW YORK TIMES) (pg.F1)

A NEW SCENE: Wine bars are popular with women, like those at Terroir, top left, Epistrophy, above, and Cafe Katja, center left. Mark Sheska, left, of Terroir. Below, menu checking at Gottino, and its spread, bottom left. (PHOTOGRAPHS BY ALEX DI SUVERO FOR THE NEW YORK TIMES

BELOW, GABRIELE STABILE FOR THE NEW YORK TIMES) (pg.F8)
PUBLICATION-TYPE: Newspaper

Copyright 2008 The New York Times Company

882 of 1231 DOCUMENTS

The New York Times
April 9, 2008 Wednesday

Late Edition - Final

A Silicon Valley Slowdown
BYLINE: By MATT RICHTEL and BRAD STONE
SECTION: Section C; Column 0; Business/Financial Desk; Pg. 1
LENGTH: 1366 words
DATELINE: SAN FRANCISCO
Housing prices in Silicon Valley remain defiantly high. New BMWs and Saabs cruise Highway 101. But for the first time there are signs that the current economic downturn is taking its toll on the country's cradle of technology and innovation.

Job growth has slowed, start-up companies are hiring and spending more cautiously, and early-stage investors who nurture the start-ups with money and expertise are growing more frugal.

Most of the investors, entrepreneurs and innovators who build companies in the Valley do so with the hope of taking them public or selling them -- the rainmaking opportunities that people here call exits. But with gloom pervading the financial markets and the business climate, the exits are hard to find.

During the first three months of the year, only five companies backed by venture capital investors went public on Wall Street, the National Venture Capital Association said last week. That is down from 31 in the fourth quarter of last year, and is roughly the same level as at the nadir of the dot-com bust.

There was also a sharp falloff in the acquisition of start-up companies by bigger corporations. Microsoft is making noise with its effort to take over Yahoo, but elsewhere things are quieting down. There were only 56 acquisitions in the first three months of the year, down from 83 in the fourth quarter.

With those options increasingly off the table, investors must spend money and time nurturing -- or altogether salvaging -- existing companies rather than building new ones.

''We are holding expenses very tight,'' said Jim Breyer, managing partner at Accel Partners, a venture capital firm. The firm is an investor in Model N, a software company that recently withdrew its registration to go public because of the inhospitable market conditions. Mr. Breyer said the company would wait until the fall, at the earliest, to try again.

''It's anybody's guess how long the downturn will last,'' Mr. Breyer said.

If it lasts through this year, he said, ''it will be far more than an inconvenience for all companies.'' The dried-up market for public offerings and acquisitions is affecting not just the atmosphere of innovation but also the lifestyle of its participants.

''Less cash coming into the Valley means less cash to purchase homes, and go out to nice dinners, spend on consumer products and go on vacations,'' said Hans Swildens, founder and principal of Industry Ventures, an investment firm that buys stakes in start-up companies that need infusions of cash.

''The general sentiment in Silicon Valley is that we're not yet there, but the reality is that we are,'' Mr. Swildens said. ''It's already started.''

The region feels as if it is on the cusp of a mood shift. On the one hand, its denizens say they feel fortunate to be working in a segment of the economy and living in a region that has been hurt far less than other parts of the country. They also express stubborn confidence in the inexorable shift to the Internet and the role that Valley technology companies will play in that transition.

And they assert that they are not feeling anything like the pain that followed the collapse of the dot-com bubble, which led to big job losses, an exodus of talent, a plunging commercial real estate market and a significant drop in investment in start-up companies.

But having assiduously clawed its way back from the dot-com bust, the Valley is again facing some tough conditions. At the area's blue chip companies, stock performance has turned grim as growth has slowed. Google's stock has fallen around 31 percent this year; Apple is down 21 percent. The Nasdaq composite, an index with a major technology focus, is down 11.4 percent this year.

Among the shares of venture-backed companies that went public in the last year, only 28 percent are above the offering price. That compares with around 50 percent in a typical year and 70 percent in strong market conditions, according to the National Venture Capital Association.

New companies are hitting roadblocks on their way to the capital markets. Upek, a company in Emeryville, Calif., that makes computer chips and software used for fingerprint recognition, registered to go public last May. It then began trying to drum up investor enthusiasm, and was making progress. But on March 4, it withdrew its registration.

On Wall Street ''there was suddenly no more appetite for growth companies,'' said Eric Buatois, a general partner in Sofinnova Ventures, an early-stage investment firm that backed the start-up.

Upek is profitable already, but without the cash infusion from the offering, Mr. Buatois said, it will delay new products, limit the number of projects it takes on and hire less aggressively.

''You shrink your expansion plans,'' Mr. Buatois said.

Upek has 30 employees in California and another 80 or so worldwide; it has manufacturing in Singapore, hardware development in Italy and software development in Prague. It also does 80 percent of its sales overseas.

Upek's global nature, which is shared by a growing number of start-ups in Silicon Valley, is cutting both ways in the economic downturn. On the positive side, the overseas sales are insulating the company from some of the tough economic conditions in the United States.

However, because it has workers outside the country, it is paying a hefty and unexpected price as a result of the dollar's decline.

''The biggest impact is the free fall of the dollar,'' Mr. Buatois said. He said costs to the company have risen 10 percent to 20 percent in the last three quarters. ''But the price of the product is not going up.''

The withering national economy also appears to be having an impact on the amount of money that early-stage investors are putting into start-ups.

In 2007, very early-stage investors -- so-called angels -- put $26 billion into start-ups, according to the Center for Venture Research at the University of New Hampshire. That figure represents no increase from the year before, after large increases every year since 2003, when the Valley emerged from the bust.

''Since the climb back, this is the first flat year,'' said Jeffrey Sohl, the center's director. He said the money was being spread over more start-up companies, which means the average amount going into individual start-ups from angels has fallen to $450,000, from around $500,000.

''It's not a crisis in confidence, but it is a more cautious approach,'' Mr. Sohl said of the perspective of investors, whom he said may also have less to invest in new companies because the market's decline has diminished their capital.

The caution is likely to hinder job growth. The Center for the Continuing Study of the California Economy projects there will be 10,000 new jobs in the region this year, down from 17,700 last year, and 25,000 in 2006

Another seemingly unrelated but potentially crucial financing issue has come from the paralysis in the market for so-called auction-rate securities. These are investments that individuals and companies have used to park money for short periods, with the knowledge that they could quickly retrieve the funds. Many venture capitalists have relied on such investments but are finding they are unable to get their money out, which in turn is threatening their ability to pay bills at their start-ups.

But the most troubling specter for the tech economy has been the stalled stock market and the impact it has had on the ability of investors and entrepreneurs to go public for personal profit and to raise money to continue to build their businesses.

At the end of the fourth quarter, there were 60 venture capital-backed companies registered to go public. By the end of the first quarter, 38 were registered. And some of those have since withdrawn their registrations, said Mark G. Heesen, president of the National Venture Capital Association.

''That's how quickly it turned,'' Mr. Heesen said, adding: ''It is not good news, and we are not trying to sugarcoat it at all.''

There is a trickle-down impact, he said. ''For Silicon Valley, it means fewer start-ups funded, fewer entrepreneurs funded, fewer employers that you hope to be the next major employer.''