David MachadoDavid Machado

Alan Liddle

Chef-owner David Machado has been synonymous since 2003 with upscale neighborhood restaurants on the east side of Portland, Ore. But this month he returns to his downtown roots with the opening of Nel Centro in the 175-room Hotel Modera.

Prior to opening the Mediterranean-themed Lauro Kitchen on Portland’s east side, Machado spent five years with The Heathman Group and nine years with Kimpton Hotels and Restaurants.

Success at 65-seat Lauro Kitchen, where annual sales climbed to $1.2 million, prompted the late 2005 opening nearby of 75-seat Vindalho, which generates annual sales of about $950,000.

But 149-seat Nel Centro—which Machado believes can do $3 million-plus in sales annually—marks a turning point for him, as Hotel Modera owner Posh Ventures LLC of Seattle paid “a good portion of the [tenant] improvements” and offered a 10-year lease “he couldn’t refuse,” says Posh partner Alan Battersby. Previously, Machado had financed restaurants through debt and home equity.

What is key to successfully operating in neighborhoods?

You have to cook for the neighborhood. You have to understand who is in the residences, what age they are, what education they have, why they go out to eat and where they travel.

How do you research those demographics?

Every real estate broker that is showing you spaces has that information available to them. There is so much information now that wasn’t available 10 years ago that you can dice and slice that [demographics] pie exactly as you need to.

How are you dealing with the recession?

I reduced prices and added happy hour in both places. The phone was ringing every day with people asking for happy hour. I figured if I didn’t have it, I’d lose sales. My happy hour is from 5 p.m. to 6 p.m. and from 9 p.m. to 10 p.m. The weekends are still strong, but the weeknights are eroding at the shoulders.

BONUS POINT

“[David Machado] is an entrepreneur and he knows the business. He understands that he has to be profitable. We bent over backward to get him into our space and I think it is going to be a lovely, lovely partnership.”—Alan Battersby, Posh Ventures LLC, Portland, Ore.

Why open a third restaurant?

The barriers to entry have always been high. Now, in a downturn, they are not. I like these [Posh Ventures] guys, and they gave me a screaming deal. What’s more, everyone [in the construction trades] is looking for work and everyone is discounting equipment.

What does Nel Centro mean or stand for?

It’s colloquial Italian for “in the middle” or “in the center.” That’s what I wanted to say about going back downtown. I wanted to convey that I was in the center or back in the middle. — [email protected]