Two of New York City's most prominent restaurant owners have announced they are freezing all future expansion plans, citing concerns about Mayor-elect Zohran Mamdani's progressive economic policies that they claim are creating a climate of fear for businesses.
Expansion Plans Shelved Amid Political Uncertainty
Stratis Morfogen, the entrepreneur behind the revived 24-hour hotspot Diner 24, revealed he had raised millions to open three additional diners in 2025 and 2026, but has now put all expansion on hold. 'I raised all the capital, we're ready to go, but I wanted to wait till the election's over,' Morfogen told Daily Mail. 'Diner 24 is doing great, but our margins are 10 percent. There's not room for another hit.'
Mamdani, who at 34 will become New York's youngest mayor in over a century and its first Muslim, South Asian, and African-born leader, campaigned on a Democratic socialist platform that includes raising the minimum wage to $30 by 2030 and eliminating the tip credit system.
Thin Margins and Security Concerns
Morfogen, who brought back New York City's first true 24-hour diner after COVID, expressed particular concern about security if police funding is reduced. 'If he's going to defund the police, and I'm hearing NYPD heroes are retiring in droves, that's scary to me,' he said. 'If that's the case, then I've got to start limiting my hours, because I'm going to protect my staff.'
The restaurateur explained that his most profitable hours are between midnight and 5am, when police presence is crucial for safety. He also highlighted how rising storefront rent taxes in recent years have significantly impacted business viability.
Industry Veteran Warns of Mass Closures
Richie Romero, a hospitality heavyweight with 33 years of experience operating more than 40 venues and owning 29 restaurants nationwide, echoed Morfogen's concerns. Romero described New York's regulatory environment as 'impossible' for small businesses and warned that Mamdani's proposals could be the final straw for many establishments.
'You eliminate the tip credit, raise minimum wage, raise business taxes - you're talking 60 percent closures,' Romero stated bluntly. 'Why would anyone do business here? The risk versus reward doesn't make sense.'
Romero revealed he's already redirecting future growth to other markets, with only one of his 15 planned new locations scheduled for New York next year. He pointed to cities like Nashville as examples of more business-friendly environments where developers, government, and small businesses collaborate effectively.
Economic Realities Versus Political Vision
Both restaurateurs expressed concern about Mamdani's lack of business experience. 'He's never run a lemonade stand,' Morfogen remarked, though he added he would meet with the mayor-elect 'in a heartbeat' to share perspective from small business owners.
Romero, who voted in a New York City mayoral election for the first time in over 20 years, described meeting Mamdani with the Hospitality Alliance board in September. 'He didn't know a lot of the basic economics,' Romero claimed. 'He didn't really understand the Department of Labor, how the tip credit or how minimum wage and labor costs affect why there's so many places that are closed.'
The elimination of the tip credit particularly worries industry leaders. Romero explained that without it, businesses would face additional costs of $25,000 to $40,000 more per employee annually, while staff in high-tip positions could see their earnings dramatically reduced.
Visible Signs of Urban Decline
Romero, born and raised in New York, pointed to visible evidence of the city's business struggles, noting that 'thirty to forty percent' of storefronts now display 'For Rent' signs on every block. He attributed this vacancy crisis to rising taxes and the shift to remote work hollowing out the city's business core.
Despite their criticisms, both business owners expressed hope that Mamdani would succeed and work with the business community. 'I hope he works with everyone to make this New York what it used to be, and even better,' Romero said. 'This isn't about my ego. This is about the only place I call home, and all these young dreamers that still want opportunity to be here.'
Morfogen agreed, emphasising that small business owners are 'the ones creating jobs' and should be consulted to protect New York's economic future. However, he lamented that the city has shifted from being a place of opportunity to one of survival, with many business partners and residents considering leaving for more affordable states.
