How NYC’s Madison Square Park ended up with the Shake Shack within it run by restauranteur Danny Meyer brings up a few questions – ones that are all too infrequently asked. Yet due to the fast success of that venture ten years ago leading to fame and mega-expansion – there are now 63 of the “burger stands” across the world – Meyer is now looking towards an IPO (initial public offering) of the corporation.
The back story is that Meyer had an inside track as a member of the board of the Madison Square Park Conservancy (which began as a “little friends group” and morphed into a full-on privatized model – look out Washington Square…). This is what happens when private conservancies and BIDs(business improvement districts) are given influence over our public spaces… there is always an inside track, hidden from public view and accessed by the affluent, corporate and real estate interests.
By the way, is there some new high end vendor coming to Washington Square? (More on this to come…)
More from Forbes on how the city’s Parks Department played a role in Meyer’s success with Shake Shack — Unlikely Supporter On Shake Shack’s Path To IPO: The NYC Parks Department:
The New York City Department of Parks and Recreation may be best known for its stewardship of Central Park and the Big Apple’s thousands of other parks, which span 29,000 acres of land or 14% of the entire city and range from golf courses to beaches, baseball fields and green streets. But who knew the Parks Department could also help launch a fast growing restaurant business on track for $100 million in sales.
The Parks Department was a crucial initial supporter of world renown restaurateur Danny Meyer’s foray into the world of burgers, beer, shakes and cheese fries with his launch of Shake Shack, an open air burger joint in the middle of Madison Square Park in 2004. That restaurant was the genesis of a multi-year initiative by the Parks Department to rejuvenate Madison Square Park, a once seedy public space at the foot of the Flatiron Building and overlooking the Empire State Building to the north.
From those humble beginnings Shake Shack has grown into a global powerhouse in a decade. The company now operates 63 locations around the world and is on pace to generate annual sales exceeding $100 million in 2014. On Monday, Shake Shack disclosed it is looking to list its shares on public stock markets, in an initial public offering underwritten by JPMorgan Chase, Morgan Stanley and a handful of underwriters including Goldman Sachs Group.
The company traces its roots to a hot dog cart that Meyer’s Union Square Hospitality Group launched in Madison Square Park in 2001 through a public art installation called ”I © Taxi.” As with most of Meyer’s culinary ventures, the hot dog cart was a success in drawing hordes of hungry New Yorkers, and those from local offices from Credit Suisse and New York Life Insurance Company. After three years, the Parks Department decided to boost its Madison Square partnership with Meyer by awarding a contract contract to open a restaurant fixture within the park.
That restaurant, Shake Shack, became another instant hit. Within months of opening, Shake Shack’s simple menu of burgers, beer, shakes, fries and a mushroom and cheese concoction known as the Shackmeister drew lines that ran over an hour and even spawned a highly watched online camera that tracked wait times.
According to Shake Shack’s IPO prospectus, it appears the Parks Department’s relationship with Meyer only involves its lease of Madison Square Park space to the company. The Parks Department isn’t listed as a 5% shareholder of Shake Shack. “[T]he license agreement for our Madison Square Park Shack can be terminated by the New York City Commissioner of Parks for any reason on 25 days’ written notice,” Shake Shack notes in its prospectus, an unlikely event.
“Over the last decade, Shake Shack has become a beloved New York City institution that generates significant media attention, critical acclaim and a passionately devoted following. We have since grown rapidly, with 63 Shacks in nine countries and 34 cities,” the company adds of its Madison Square Park roots.
While In-N-Out Burger and McDonald’s, in many respects, are symbols of California’s driving culture, Shake Shack and its relationship with the Parks Department may underscore New Yorker’s deep ties with the public spaces that dot the streets of ‘ the city that never sleeps.’
Previously at Washington Square Park Blog:
Privatization, Concessions and New York City Parks October 8, 2010