Palm Management Corporation Business Information, Profile, and History

Company Perspectives:

The Palm restaurant is the oldest family-owned white tablecloth restaurant to expand across the United States and still maintain family ownership.

History of Palm Management Corporation

Palm Management Corporation operates 30 upscale steakhouses in major U.S. cities, Mexico, and Puerto Rico, as well as a pair of inns located in the Hamptons area of Long Island. Now based in Washington, D.C., The Palm originated in New York City, where it grew into an institution, known for its huge steaks and lobsters, sawdust strewn floors, walls covered with caricatures of celebrities and prized customers, and theatrical waiters. After expanding to only Washington, D.C., and Los Angeles during the Palm's first 50 years, The Palm has since opened satellite eateries in most major U.S. cities, transferring as much of the charm of the original restaurant, including caricatures of local notables and the gregarious waiters, but forgoing the sawdust on the floors due to local health regulations. Palm Management also operates a mail-order meat business, Palm Pak. The company is owned and operated by the third and fourth generations of The Palm's founding families.

The Palm Dating to the Prohibition Era

The Palm's founders were Pio Bozzi and John Ganzi, immigrants from the Parma region of Italy who met in New York in 1920. They decided to open a restaurant in 1926 at 837 Second Avenue between 44th and 45th streets in the Kips Bay section of Manhattan, what was then an Italian neighborhood and the heart of New York's newspaper district. According to lore, the partners planned to name the restaurant after their native Parma, but when they applied for a business license, a bureaucrat unable, or unwilling, to decipher their thick Italian accents typed in "Palm" as the name of the establishment. Given that The Palm was to become known for its steaks and not its Italian food, the misunderstanding proved to be a stroke of good fortune. Bozzi and Ganzi intended to specialize in northern Italian cuisine, but they were willing to adapt to the times and the taste of their clientele. The Palm started out as a speakeasy during the Prohibition era, serving drinks as well as Italian food, a perfect combination to appeal to the newspaper employees in the neighborhood. When some of the newspapermen wanted an occasional steak, Ganzi was more than willing to please, known to scurry up Second Avenue to a local butcher to buy a steak and then rush back to the kitchen to cook it to order.

The Palm also became a hangout for syndicated newspaper cartoonists, who sold their works to nearby King Features Syndicate, or to Hearst, UPI, and the Mirror. For many cartoonists it was a hand-to-mouth existence. Each Wednesday, "look day," the cartoonists peddled their work to magazine editors, and whether they were able to sell their work determined if they could afford to eat. Often The Palm traded a plate of spaghetti for a copy of a freshly drawn cartoon character it could put up on the wall. Since Bozzi and Ganzi could not afford to decorate their place, it was considered a fair trade. The practice evolved into the artists creating a caricature of a famous person or favorite Palm customer. Unlike another New York institution, Sardi's, which mounted framed celebrity caricatures, The Palm simply glued their pictures to the wall in a haphazard manner, lending a comfortable, fraternal air to the restaurant. What started out as a simple bartering arrangement evolved into a tradition, complete with an unveiling ceremony. The Palm values the original artwork so much that it is insured for $500,000.

With the repeal of Prohibition in the early 1930s, The Palm shed its speakeasy existence. It also established itself as an excellent steakhouse, although Italian food remained on the menu. In the early 1940s, the founders stepped down, replaced by their sons, Walter Ganzi and Bruno Bozzi. They brought "surf and turf" to The Palm with the introduction of the three-pound lobster to the menu. Somehow they were able to maintain a supply of steak during the war years of the 1940s, little hindered by meat shortages caused by World War II. Thus The Palm continued to grow its steakhouse reputation, and was so prosperous that during the postwar skyscraper building boom that came to Kips Bay it was able to resist attractive buyout offers and remain in its original location.

Third Generation Becoming Involved in the 1960s

A third generation of the founding families, Bruce Bozzi, Jr., and Wally Ganzi, Jr., came to work at The Palm in 1963 and were instrumental in helping the restaurant to adapt to a changing culture. At the time, New York steakhouses maintained a strict jacket-and-tie dress code. To appeal to a younger market, The Palm eliminated these dress restrictions. In addition, the younger family members made The Palm more open to women, who until that time were almost never seen in the restaurant during lunch. Bruce Bozzi also was credited during this period with introducing the four-pound lobster to The Palm menu, dispelling the notion that larger meant tougher when it came to lobster. As a result, the sale of lobster at The Palm increased dramatically, transforming the image of The Palm into a steak and seafood restaurant. In 1967 the crowded restaurant expanded, opening a second floor dining room. A group of syndicated newspaper cartoonists, at the cost of drinks and lunch, decorated the room with sketches, which one of them arranged to paint. A newly hired busboy, however, mistook the art for graffiti and washed down the walls, necessitating a second round of free drinks and lunch to decorate the new Palm dining room.

The second generation owners of The Palm retired in the late 1960s, leaving the business in the hands of younger, more aggressively minded family members, who would seek to spread The Palm concept. The first move was to Washington, D.C., an idea suggested by George H. Bush, future president of the United States who at the time was the U.S. ambassador to the United Nations, the headquarters of which was located several blocks from The Palm. Bush decried the lack of hearty American fare in capital-area restaurants and urged Ganzi and Bozzi to open a Palm restaurant in Washington. He and several friends each invested $10,000 to launch the new eatery in 1972. It quickly established itself as a place where the city's power brokers convened. In the meantime, the original Kips Bay restaurant continued to thrive, prompting the owners in 1973 to open another Palm Restaurant, Palm Too, across Second Avenue to handle the overflow from the flagship unit.

The fourth Palm Restaurant, located in Los Angeles, was launched once again at the behest of a customer, author William Peter Blatty of The Exorcist fame. Because the story was set in the Georgetown section of Washington, D.C., when the novel was transferred to the screen much of the filming was done on location. Blatty adopted the D.C. Palm as his personal haunt and soon began urging management to open a Palm Restaurant in Los Angeles to cater to its own brand of power brokers. To prove his seriousness he put up $600,000 of his own money. Ganzi and Bozzi agreed and launched a search for a suitable site in Beverly Hills. After a deal fell through, however, they turned their attention to a less exclusive part of town, West Hollywood, where they found a ramshackle, erstwhile auto parts store on Santa Monica Boulevard. The Los Angeles Palm opened in 1975 to little fanfare. A Hollywood publicist was paid to bring his clients to dine--including Farrah Fawcett Majors, who was starring in the hit television series Charlie's Angels, and her husband, Lee Majors, star of another series, The Six Million Dollar Man--and soon other celebrities began to trickle in. The buzz about The Palm reached critical mass and was soon on its way to making the restaurant a bi-coastal institution. Blatty's faith in the concept was rewarded, as he eventually sold out to Ganzi and Bozzi for $2 million in the 1980s. It was also at the Washington Palm that Ganzi began to relocate himself and his family to the city of a new operation, a practice that would prove taxing over the next 15 years. Bozzi, in the meantime, continued to run the New York operations from offices located above the original restaurant.

With four successful restaurants in the fold, The Palm no longer required the prompting of its patrons to continue its expansion efforts, despite the declining popularity of red meat in the United States (per-capita consumption dropped from 94.4 pounds in 1976 to 77.6 pounds six years later). In 1977 a Palm Restaurant opened in Houston, the Ganzi family residence for two years. Two years later the Palm concept was transplanted to the Hamptons when the company opened a restaurant at the Huntting Inn, also owned by Ganzi and Bozzi, located in a 300-year-old building in trendy East Hampton, a town known for its share of celebrities, including the likes of Billy Joel, Calvin Klein, and Robert De Niro. To serve its growing chain of restaurants, Palm Management acquired its own meat purveyor during the 1970s.

The next Palm Restaurant was opened in 1980 in Chicago, housed in the posh Regent Hotel. A year later a Palm Restaurant opened in Miami, quickly becoming a favorite for transplanted New Yorkers and snowbirds as well as locals. After a Dallas location opened in 1983, The Palm began to slow the pace. The next Palm Restaurant, the chain's tenth, opened in San Francisco on the ground floor of the Hotel Juliana in February 1986. Unlike other locations, however, the Palm concept did not find as fertile ground in the Bay Area. Management tried a number of measures to adapt to the culture, offering smaller steaks and adding more seafood and poultry dishes, but The Palm was never fully embraced by San Franciscan diners. After four years, when the hotel changed owners, The Palm was unable to come to terms on a new lease and management opted to shut down the operation in the summer of 1990.

Third Generation Easing Involvement in the Late 1980s

Ganzi and Bozzi started one more restaurant during the 1980s, opening a Palm in Philadelphia, Pennsylvania, in 1989, but the partners, after nearly 40 years of running the business, were growing tired. Bozzi wanted to spend more time with his family and Ganzi, with politics, and to gain some much needed relief from the nomadic life he had been leading since the early 1970s. (It was also during the late 1980s that Palm Management moved its headquarters to Washington, D.C., to be closer to its accountant.) In need of someone to assume day-to-day control of The Palm chain, they decided to recruit a chief operating officer and asked Bozzi's son-in-law, Alfred L. Thimm, Jr., if he was interested in taking on the job.

Thimm's association with The Palm dated to his college years, when as a senior studying modern languages at Union College in Schenectady, New York, he became a part-time server at the East Hampton Palm to earn some extra money while visiting a girlfriend. Having worked at other upstate restaurants, he became enamored of the Palm mystique, so much so that he traveled hundreds of miles to work occasional shifts during his final months as an undergraduate. The son of teachers, Thimm continued his education in Germany but, unsure of what to do with his life, he returned to East Hampton and worked at The Palm during the summers. In the winter, he shifted to Florida, waiting tables at The Palm in Miami. Finally he heeded his family's call and enrolled in the University of Denver's M.B.A. program, concentrating on hotel and restaurant management. It was during this time that he began dating Bozzi's daughter, Andrea, whom he had met originally during his days at East Hampton. After graduation, they were married and he worked for four years with Boston-based Laventhol & Howath's Management Advisory Service, involved in lodging and restaurant consulting work. Then in 1989 he went to work for David Berins and Co., which then became part of Arthur Anderson & Co.'s Real Estate Advisory Group, for which he led several hospitality consulting projects.

Despite his affection for The Palm, when Ganzi called to inquire about his interest in the COO position, he was hesitant to go to work for his wife's family. He finally agreed and began the task of bringing a modern corporate infrastructure to The Palm, which at the time still relied on handwritten checks and lacked a point-of-sales system. According to a 2002 profile in Nation's Restaurant News, "Over time, Thimm would introduce a modern management system, including a uniform system of accounts, an innovative, direct-mail marketing plan, a system to update the aging restaurants and a revamped bonus plan for management." He encountered some resistance from old-timers Ganzi and Bozzi, but eventually won them over, and after a couple of years The Palm was ready once again to resume its expansion.

In 1993 The Palm opened a restaurant in Las Vegas at the Forum Shops in Caesars Palace, quickly establishing itself as one of the most successful units in the entire chain. Two years later a Palm Restaurant opened in Atlanta's trendy Buckhead district, in the Westin Buckhead hotel, where it became the only Palm location to offer breakfast and a separate bar, The Palm Bar Two. In 1996, The Palm opened two restaurants: in Boston, in the Westin Hotel, Copley Place, located in Boston's Back Bay district; and in Denver, in the Westin Hotel at Tabor Center. The Chicago-area Palm also changed hotels in 1996 to the Swissotel. A year later The Palm opened a restaurant in Charlotte, North Carolina, in the Phillips Place shopping center. In 1998 the concept moved beyond the border when a new Palm Restaurant was opened in Puerto Rico in the El San Juan Hotel and Casino. The chain closed out the 1990s by establishing a unit in Mexico City's Presidente Inter-Continental Hotel and revisiting established markets, opening a restaurant in Tysons Corner, Virginia, to serve the corridor of high-tech companies located in the Washington, D.C., area and adding a third New York City location, this one in the revitalized Times Square district.

As a new century dawned, The Palm continued to expand. In 2000 it opened three restaurants: a third Texas Palm, in San Antonio, as well as a second restaurant/inn located in East Hampton (the James Lane Café at the Hedges Inn) and the first restaurant in Nashville. In 2001 The Palm celebrated its 75th anniversary by opening three more restaurants: in Orlando, Florida, in the Hard Rock Hotel at Universal Studios; in Tampa Bay at the Westshore Plaza; and in Troy, Michigan, to take advantage of recent office development in Troy and Auburn Hills. A second international Palm was opened in Cancun, Mexico, in 2002, as was a second Los Angeles restaurant located close to the new Staples Center. In addition, The Palm opened a restaurant in Coral Gables, Florida, in 2002.

While The Palm saw its business adversely impacted by a downturn in the economy, the deleterious effects that the terrorist attacks of September 11, 2001, had on travel and tourism, and record beef prices, the chain persevered, although it put a temporary hold on its expansion program. Then, in the fall of 2004, The Palm Restaurant opened its 28th location, this one in The Quarter at Tropicana, a mall attached to the Tropicana hotel and casino. In 2005 restaurants opened in Atlantic City and the Gas Lamp district of San Diego, close to the new baseball park.

Principal Subsidiaries: JORM Supply Corporation; Palm Pak.

Principal Competitors: Morton's Restaurant Group, Inc.; Ruth's Chris Steak House, Inc.; The Smith and Wollensky Restaurant Group, Inc.

Chronology

• Key Dates:
• 1926: Pio Bozzi and John Ganzi open New York's Palm Restaurant.
• 1967: The restaurant opens a second floor dining room.
• 1972: The Washington, D.C., Palm opens.
• 1975: The Los Angeles Palm opens.
• 1983: The Palm Restaurant opens in Dallas.
• 1990: Alfred Thimm is named chief operating officer.
• 1996: Restaurants are opened in Boston, Denver, and Chicago.
• 1999: The third New York City Palm opens in Times Square.
• 2002: The second Los Angeles Palm Restaurant opens.
• 2004: The Atlantic City Palm opens.