September 27, 2021

Why this club king is opening a Times Square nightspot as COVID rages

Opening a nightclub in the dead zone of Times Square as the Delta variant rages may sound counterintuitive, but for club king Richie Romero, it’s a risk worth taking.

He says he’s found that so far, in a few test runs before a grand opening later this month, people are ready to get out of the house and spend big after having been cooped up for more than a year.

That kind of pent-up energy could help Romero when it comes to his new 700-person nightclub, Nebula, which is set to open Sept. 23.

He could use some of that mojo at Nebula, which is named after a cloud of dust and gas in outer space that is visible in the night sky. The venue, at 135 W. 41st St., is set to be the largest nightclub to open so far in Gotham this year at 11,000 square feet over three floors.

Romero’s partner, Yang Gao, signed a 15-year lease in late 2019. He had just launched a gut renovation when lockdown hit in March 2020. Gao brought in Romero, a nightclub veteran, as managing partner in April 2020 to help navigate the pandemic. Romero is known for having had a hand in the opening of celebrity hotspot 1Oak.

Nebula
Nebula, with occupancy for 700, will rely on pricey bottle service.
Nebula

The renovation went forward even during the pandemic, but now is the real test: It’s a $12 million investment — or gamble. 

The two are now working with their landlord for a “significant” reduction of rent, Romero said, but they wouldn’t disclose details during negotiations. 

“The landlord is working with us,” he said on a hopeful note.

Meanwhile, over the summer, Romero ran a series of pop-up events to “test drive” the new nightclub, trying to gain information on how people’s spending habits might have changed in the wake of COVID — and how comfortable they were going out during the pandemic at all.

“I believe in polling,” Romero said. The results made him hopeful, he said: In fact, they might point to some increased demand after being penned up throughout the lockdown.

“If people spent $1,500 on bottle service before the pandemic, they are now spending $3000,” he said.

That’s the good news.

But bad news looms: A new lockdown could shut it all down again, even if so far city and state officials have said a new lockdown isn’t on the table. Another mask mandate and reduced seating capacity — if they happened — could also harm revenue.

Inside Nebula
Another lockdown could mean partyers will have to wait even longer to enjoy Nebula’s sights and sounds.
Nebula

“Dealing with Delta is total fear,” Romero said. “It’s the unknown that’s scary. We don’t want to go back to another lockdown. We have a lot on the line.”

For now, the nightclub business model remains the same. Bottle service does the heavy lifting when it comes to paying the bills, bringing in more than 50 percent of a club’s revenue, he says. 

And prices for bottle service have also skyrocketed since lockdown ended. As Side Dish previously reported, there’s a shortage of Champagne and upscale spirits because production slowed down or stopped during the pandemic. 

The most popular bottle now, Romero says, is a tequila, Don Julio 1942. A 750-liter bottle that sold for $800 to $1100 at the clubs pre-COVID now sells for $1400 to $1900, he said — and people are buying it. 

“People have been cooped up for so long, they are happy to spend,” he said. 

He says that although he’s increased prices for spirits like Don Julio 1945, the price the club pays for the bottles has remained basically the same. 

Still, there’s a supply issue. “If you order 20 cases, you might be lucky if you get three cases,” Romero said.

Meanwhile, to even get into the club — or to work there — people must show proof of vaccination, under city rules.

That means that some employees who don’t want to be vaccinated have quit. “It’s their choice,” Romero says. 

Even with the vaccine requirement, it’s a long way from the days of social distancing and other COVID-related inconveniences: There are no more temperatures taken at the door. No more plexiglass separating tables. Some clubgoers opt for masks and gloves, but it’s their choice — not mandated.

Still, opening the club as the pandemic rages — even if there are no shutdowns — brings challenges, like the cost of talent, such as DJs. Romero won’t name anyone, but he says DJs who charged $25,000 per night are now charging $40,000. 

“Many weren’t working during the pandemic and they are playing catch-up with their money.” Romero says he is still “figuring out” how this will affect ticket sales. 

Inside Nebula
Richie Romero and partner Yang Gao hope to work out a deal on rent with their landlord.
Nebula

Ticket sales make up 30 to 40 percent of a club’s revenue, and customers typically pay anywhere from $20 to $100 for entrance, but Romero says he’s going to have to fine-tune how much people are going to be willing to pay even though his costs for talent have gone up substantially. If he charges too much, Romero says, people won’t come.

Nebula also built out three mini club rooms with their own sound systems and private bathrooms for people too nervous to mix in big crowds. 

Other clubs have also reopened since the pandemic shutdowns, including House of Yes in Brooklyn in Bushwick, Schimanski in Williamsburg  and Slate in Chelsea. 

At first, all was going well at Schimanski — even “better than expected” — until the Delta variant hit, said owner Eddie Dean. 

“We were arguably doing better than before COVID. It was a surprise,” he said of throwing the doors open after state and city restrictions were lifted. “Then we had a setback,” Dean said, of Delta’s resurgence and customer worries.

The only pandemic rule currently in play is that customers and staff must be vaccinated. That meant — like at Nebula — losing some staff, Dean said. 

“We are managing the best we can even as the goalposts keep shifting. Everything keeps changing. The whole notion of a nightclub is community, meeting people, conversing, so 

it really hits us in the heart,” Dean said. 

Aristotle “Telly” Hatzigeorgiou, of Slate, said he was “shocked at how comfortable people were” to be back at the clubs. “People want to go out and be social,” Hatzigeorgiou said, adding that there is no way of knowing how long it will last. 

Richie Akiva, co-founder of 1Oak — which is slated to reopen this fall — agreed. 

“Some people say it’s like the Roaring Twenties,” he said. “The more people push this narrative, the more it will come true,” adding that there is a whole new generation of young people who made money in tech and crypto — and they can’t wait to spend. 

“The real estate and hedge fund crowd are older now with nannies and chefs. It’s the young people with no kids or families who want to spend and have fun. It’s a different time,” Akiva said.