Undiplomatic exchange: HKC, Aqua Group split at Legation Quarter

It's dog eat dog, er, cat fight cat...

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There is a brouhaha over at The Beijinger between Legation Quarter landlord HKC and the Aqua Group, which had been running restaurants Agua and Shiro Matsu and bars Hex and Fez at the upscale complex until all four closed about two weeks ago.

The Beijinger earlier posted a press release from Agua Group that stated (my highlights):

Legation Quarter Ltd. has consistently failed to meet its promises and commitments to us and the other tenants to maintain and manage Ch’ien Men 23 as Beijing’s premier fine dining complex resulting in damage to our businesses and day to day operations.

Legation Quarter Ltd’s behavior has reached the point where, among other things, they harass our operations by switching the power on and off at will. We are unable to operate in this hostile environment and as a result we deeply regret that we have no choice but to close our operations at Ch’ien Men 23 with immediate effect.

Today the site posted a press release from HKC that stated (my highlights):

It is regretful that Aqua has not paid its license fees to Legation Quarter Ltd. since late 2008, immediately after they had enjoyed the 16-week license-fee free period….

Aqua has nevertheless used Legation Quarter Ltd.’s premises to conduct business in its restaurants and bars for over a year, continuing to disregard our repeated requests to honor their obligations and pay the long overdue license fees….

In short, the closure of Aqua is due to its inability, or unwillingness, to pay the license fee for ‘Ch’ien Men 23’ and Legation Quarter Ltd. is now seeking legal advice in respect of Aqua’s  irresponsible and untrue press release.”

I spoke to Lidia Sakarapani, sales and marketing director of Aqua Group, last week and she cited issues — ranging from  electricity and infrastructure problems to major events held in the square that affected traffic flow to the the bars and restaurants — that disrupted business. She also said The Beijinger made minimal effort to contact her before running its intial story considering that a member of the magazine’s staff is the former PR person for Agua a former member of the magazine’s staff was a former PR person for Agua [see comments re this correction].

In any case, free rent helps to explain why some places at Legation Quarter have survived this long, not to mention in other spots around town (see Solana). If such places had to pay in full from day one, on top of their heavy staff costs, I think we would see much higher turnover.

Based on my experience and on talking to readers, the only place that seems to be consistently busy at Legation Quarter – aka Chi’enmen 23 – is Maison Boulud. I called GM Ignace LeCleir last week and he told me the restaurant has no plans to move. As for the Aqua Group, Sakarapani says it plans to be back in business in Beijing soon.

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But can it top Alexis versus Krystle...

16 thoughts on “Undiplomatic exchange: HKC, Aqua Group split at Legation Quarter”

  1. regardless of the amusement that we can have watching these places tear themselves apart… I’m now again craving a wonderful dinner at Maison Boulud… maybe I should look into organizing a ChocoJing there? ;)

  2. Will be interesting also to see the development on other venues nearby, such as Capital M and Elements Fresh on the Qianmen street… Though i don’t like the former, I would like to see Capital M pull it off and survive out there far away from everybody else. It’s not going to be easy though.

  3. Also, whomever was hired to change the name from Legation Quarter to Ch’ienmen 23 is a genius.

    Pure branding genius.

    I mean, get this, they changed the name to its street address but kept it in Wade-Giles to give it a hipster/Legation-era vibe.

    Wow!!!!!!!!!! So impressive!!!!!

    I bet they changed it because nobody could find the damn place.

  4. “She also said The Beijinger made minimal effort to contact her before running its intial story considering that a member of the magazine’s staff is the former PR person for Agua.”

    Actually, it’s the other way around – Agua’s former PR person was a sales person at True Run Media before she took that job.

  5. @ Miyagi,

    Most taxi drivers STILL have trouble finding the place, but wasn’t the name change due to something political? I’ve been trying to find something online about why the name changed but so far have been unable to…

    Cheers, Boyce

  6. @ Tomaz,

    I don’t think it is ever easy for high-end Western fare in Beijing, especially those not affiliated with hotels or who have free rent or a tremendous amount of cash to burn.

    Cheers, Boyce

  7. @ Jerry,

    Thanks for the heads up. For the record, I talked to the GM at True Run via phone and instant messenger last week re this issue — since it was a concern to Aqua Group and at least to some at True Run — and I got the opposite impression. Lost in translation, I guess. Will correct it in the body of the post.

    Cheers, Boyce

  8. As one of the staff on The Beijinger, it’s my understanding that phone calls were made and emails sent to Agua’s PR department to ask what was going on before the original story was posted on the website. We also called the reception several times over several days, and were repeatedly told that the restaurant was closed due to “electrical problems.”

    During this period, I believe further attempts were made to contact Agua by telephone and by email. We waited, but aside from the reception’s explanation about electrical problems, we received no official comment until around a week after our original piece was published. When that comment arrived, it was to confirm that Agua would indeed be leaving the Legation Quarter.

    We have discussed these events with Agua, and while we consider that we were within our rights to inform people that Agua (a 20-30 minute taxi ride away for many of our readers) was not open for business, we appreciate that the past few weeks have been tough for all involved. The Beijinger – and our other magazines – were firm supporters of Agua and its sister venues, and we wish Agua’s team – a talented group of people – the best in their next endeavours.

  9. Frankly, it doesn’t surprise me that Agua is gone…excellent food and attentive service, but pricey. I sometimes felt like the food and especially the wine list was priced to place Agua into a certain class of restaurant. I have a problem with establishments that have entry level by-the-glass list that starts at over 10USD. You can get away with that at a Charlie Trotters or French Laundry, not su much in Beijing. On the food front, if I’m going to spent MB prices on set meals and wine pairings, why not walk next door and get the real thing?

    On a related note, when I queried the GM and PR folks from Agua about Oct 1-related closures for an article earlier this year, they insisted that if they released dates they might be closed for the holiday, then it could discourage customers from coming to the restaurant, so they’d rather not announce any closures ahead of time. What type of customer service is that? Frankly, given managment mis-management of PR, this whole Beijinger-Agua debacle isn’t surprising.

  10. @ phoenix,

    Re pricing, a lot of high-end restaurants in Beijing place themselves in a catch-22 position: their decor, rent, and staff costs are so high that they correspondingly need to charge very high prices to make ends meet. Unfortunately, as we’ve seen time and time again in Beijing, there aren’t enough people willing to pay them yet. What surprised me is that some of the places at Legation Quarter have lasted so long and now it seems it’s because they have been paying little or no rent, much like some places in Solana.

    Also, if I’m going to hike out to legation quarter, part of the experience is *the place*, and Maison Boulud has taken advantage of its space more than any other venue. i mean, Sadler could have been set anywhere in the city and, even worse, Hex looked like the bar for a movie set about life-sized talking bees.

    Re closures, i think the best PR move is to simply state, “at this point, we will be open for the holidays, but strongly suggest patrons phone ahead as the situation might change with little notice.”

    Cheers, Boyce

  11. @ Iain,

    Thanks for the info.

    “I believe further attempts were made” and “further attempts were made” are different. Anyway, did anyone talk to the GM before the original story came out? I’m just a blogger, with no advertisers to piss off, but I still try to move up the ladder from PR to manager, and visit the place in question, for something this big if I can’t get any response and if I have the time. I’m not making any accusations, just curious re the protocol there when situations like this arise. (Also, I’d love to know who the “inside source” was!)

    Cheers, Boyce

  12. simple fact: if the Beijinger was truly worried about pissing off an advertiser, they would have done what the other english magazines have done — just simply ignore the story.

    How is it that mags like Time Out and City Weekend can shower Agua with several of their Best Restaurant of The Year 2009 awards yet not feel it even worth a mention when the place has been closed for weeks?

    PS There seems to be some confusion about The Beijinger’s contacting of Agua: They DID talk to Agua, — and not just the PR person, also a higher-up — and in each instance, they were told that the restaurant was closed temporarily due to electrical problems and that there would be no further comment until a press release was written up.

    The real mistake the Beijinger made was to have taken what the Agua people said as gospel and not immediately attempt to contact their landlord for the other side of the story.

  13. r.e. Legation name change: I’m rounding up some taxi drivers for the trivia team. With their history chops and my deep knowledge of 1980-85 music were going for gold!

  14. @m-dawg

    Got it: The Beijinger *doesn’t* care about its advertisers. It’s all about hard news. Kidding, kind of…

    Re the other magazines, maybe they simply didn’t notice: I mean none of them picked up on the End of Super Bar Street story for quite a while, even though it involved more than a dozen bars and restaurants. And I don’t think there is any confusion over whether or not The Beijinger contacted Agua. I simply asked if anyone called the GM ahead of that first story.

    Re magazine restaurant and bar awards, didn’t Time Out give its restaurant of the year award to Sureno? Anyway, for its worth, here are my two RMB on these awards for 2009:

    Time Out: Holds its awards in The Opposite House, where Sureno, which is in The Opposite House, wins, which results in numerous restaurant and bar people sending me “WTF” instant messages. Also, Time Out publishes The Village Times for Swire, which is the company behind the Opposite House. Does this necessarily mean the awards were unfair? No, but this situation increases the possibility some might think so. Oh, and one judge told me that she was given a list of the candidates, that she replied by email that she had concerns with some of them, and next thing she knew the winners had been decided. (By the way, if you want to drag Aqua Group into this, Fez and Time Out organized a cocktail contest earlier this year at Fez and, of more than a dozen competing establishments… Fez won. Again, it might have been fair, but the perception is not good.)

    City Weekend: Holds its bar and restaurant awards at Lan, which picks up a bunch of them, as do other 2008-2009 clients of a single PR company – Alchemy (see Bling, All-Star, The Beach, Domus, etc). Again, it doesn’t mean the magazine did anything wrong – maybe it’s readers really do think All-Star has the best American food, best burger, etc in Beijing, but there was a lot of eye-rolling at that event. Also, CW provides both reader and editor picks. See my take on it from my live blogging sessions of the awards. (By the way, I would add that of all the magazines, City Weekend is the most cooperative by far in terms of exchanging info with me, talking about the scene, etc):

    http://www.beijingboyce.com/2009/05/21/blogging-live-the-city-weekend-bars-and-restaurants-award/

    The Beijinger: Holds its bar and club awards on a patio in Chaowai Soho, which was obviously not up for any awards – Mesh wins while numerous non-advertising restaurants also take prizes. Holds it restaurant awards in the Hilton, and Element Fresh wins, with numerous non-advertising restaurants also taking prizes. TBJ provides both reader and editor picks. Again, I blogged this one live:

    http://www.beijingboyce.com/2009/05/13/blogging-live-the-beijinger-bars-and-clubs-awards/

    The Beijinger’s awards seem the fairest because it tries to avoid holding the event in venues that have been nominated, because a high percentage of winners are not advertisers, and because it offers both reader and editor picks.

    Whew!

    Cheers, Boyce

  15. From a different angle…

    How many times do we see restaurants honored by the local laowai mags (‘Best Restaurant’, ‘Most popular’, etc.), only to see them close their doors in the next twelve months. Why is it so? As we can see from this situation, a lot is going on under the surface. Part of the problem seems to be that BJ landlords are asking unattainable rents, due (partly) to BJ’s reputation as one of the most expensive real estates on the planet. Expensive rentals equal high priced dining/drinks, and it seem that, while a restaurant may run hot in the short term, patron longevity becomes questionable. The (lack of) ability of landlords to set reasonably attainable prices is part of their short sighted strategy, and in line with the local service standard practices of “if you don’t like it, move aside. There’s billions of people (suckers?) waiting behind you!”. Was it the case in this situation that the restaurant enjoyed the discounted rent (landlord stop-gap solution?), but maybe became too reliant on it in the quiet times? Why not set the rental lower to begin with, and look forward to having a longer established (rent paying) client, instead of an empty space to rent? Just a thought.

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