Taking ownership of NHC’s growth

MADE TO ORDER: Hemenway’s Seafood Grill & Oyster Bar chef Marvin Morales, left, and waiter Mark Smith are among a team of Newport Harbor Corp. employees that swells to 1,000 during the summer. / PBN PHOTO/RUPERT WHITELEY
MADE TO ORDER: Hemenway’s Seafood Grill & Oyster Bar chef Marvin Morales, left, and waiter Mark Smith are among a team of Newport Harbor Corp. employees that swells to 1,000 during the summer. / PBN PHOTO/RUPERT WHITELEY

(Editor’s note: This is the first in an occasional series of stories that will feature the companies and industries creating jobs in the region.)
By Rebecca Keister
keister@pbn.com
A dropped glass, broken on the kitchen floor, isn’t an uncommon restaurant, dinner-rush occurrence. Neither is the ensuing scuttle to clean it up or for waiters to call out a warning loud enough to trickle to the dining room.
But patrons at 22 Bowens Wine Bar & Grill in Newport may from time to time overhear something slightly off the normal track as staffers there shout a single word that signals the need for mop or broom. At this waterfront eatery the catch phrase is ESOP, an acronym for Employee Stock Ownership Plan that means something like, “Be careful, you actually ARE paying for that glass.”
“People yell [that] because that’s their money breaking on the ground,” said Jamie Laplume, the restaurant’s senior general manager. “That’s really where the [company] pride comes in and the core values. We really live by them.” 22 Bowens is one of eight restaurants in the Newport Restaurant Group, a division of the Newport Harbor Corp. that soon will include the Papa Razzi restaurants in Massachusetts and Rhode Island.
Newport Harbor has 450 employees, a staff that expands to approximately 1,000 during the summer season with part-time employees. It has thrived through recession with the help of strategic expansion, such as Providence’s Hemenway’s Seafood Grill & Oyster Bar, which Newport Harbor purchased in 2009, the year some argue was the peak of the country’s economic crisis that counted the hospitality industry among its most scarred victims.
And the company has relied on steady performance from longtime area favorites, most notably perhaps the Castle Hill Inn, a popular and somewhat famous wedding venue in Newport.
Newport Harbor, which also maintains the Newport Yachting Center in its enterprise, has grown annual revenue by 39 percent since Paul O’Reilly became CEO in 2006 and expanded its full-time-equivalent employee base by about 60 percent. Its seasonal staff has doubled in that same time. “I’m not sure I can represent that we’re the only company that has a secret ingredient,” said O’Reilly. “A lot of [what was lost across the industry] has come back pretty strongly.”
Still, the corporation easily could be looked at as a working model of how to navigate challenging economic times.
The Papa Razzi purchase, which was announced in March and which O’Reilly hopes will be completed this summer, will add another 500 employees to the mix.
O’Reilly said a “significant” amount of capital just went into Castle Hill for a tented banquet area and landscaping, as well to beautifying the tenting area at the Newport Yachting Center.
One thing O’Reilly emphasizes when he talks about the company’s history is that it is not a family business, though leadership reins have ended up passed across three generations.
His father, Tim, was president from 1977 to 2006. Tim O’Reilly is a grandson of J.T. O’Connell – who founded the company as Newport Oil Corporation in 1925.
O’Reilly had the quintessential American high school experience of working for his father’s business at its bottom level – cleaning up after events at the Newport Yachting Center, which the company opened in 1981 – but never envisioned one day being a full-time employee, let alone running the entire organization.
But he did, working his way from sales and marketing in the oil business and marina, “making a lot of mistakes,” as he said, turning the Castle Hill Inn, which the corporation took over operations for in 1995, profitable. Eventually he moved to the corporate side, which led to his current position, to focus on growing the restaurant business.
Newport Harbor Corp. ventured there first in 1981 with the Mooring Restaurant in Newport, after opening the yachting center the year before.
Kerri Jaffe, chief marketing officer, cites the way decisions are made and the company’s dedication to advancing careers and concentration on promoting from within as keys to employee dedication. Jaffe, having climbed from her original post as director of hospital sales, is one example of that philosophy. She’s been with the corporation six years.
Corey Barriera, senior general manager at Waterman Grille in Providence and The Boat House in Tiverton, is another. Barriera points to the ESOP culture as another motivator, telling the story of one of his servers who has been with him nine years and is a fully vested employee.
O’Reilly was instrumental in shaping the company as employee-owned starting when the oil business was sold in 1995 and proceeds were used to buy up shares from descendents of original investors wanting to sell ownership.
ESOP now owns 48 percent of the company. O’Reilly expects that number to climb past 50 percent within the next three years and eventually to 100 percent.
Kristin Fahey, director of human resources, lists several over employee-retention initiatives, including hospitality, business and financial classes.
Then there is O’Reilly’s open-door policy.
“Anybody can walk into Paul’s office and have a conversation,” said Laplume. “I really think [the company’s success] is just the culture.”
O’Reilly is a member of the Newport County Chamber of Commerce’s board of directors.
“[Newport Harbor] is an excellent corporate citizen,” said Jody Sullivan, the chamber’s executive director. “They’re an extremely generous community player and a quality employer.”
Not every venture works out.
Newport Harbor added Blackstone Caterers to its portfolio in November 2002 and planned a catering expansion, but made a decision to abandon the idea and later sold that company.
Diversifying outside its current retail areas isn’t in NHC’s cards, O’Reilly said, but expanding within its framework is.
“We feel confident that if you’re willing to take a risk during a difficult time, it will pay off,” O’Reilly said. &#8226

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