by Diccon Hyatt
Steve Distler has relocated Elements restaurant above the Plaza, to a space across from the library and Hinds Plaza.
Back in 2008 Stephen Distler had a great plan for a new restaurant called Elements. With chef Scott Anderson, formerly of the Ryland Inn in Whitehouse Station, at the helm, Elements would be a bold, experimental, hip, and entirely new dining experience for the town. Located on Bayard Lane just a few blocks from the town center, and blessed with ample free parking, Elements was sure to be well worth a short drive for people seeking great food. Distler spent what must have been a small fortune hiring architect Bob Steele, based in Richmond, Virginia, and known for stylish renovations, and remodeling the building, a former garage, creating a beautiful stone, steel, glass, and wood interior. Its structural flourishes included a teak ceiling that extended outside the building.
It didn’t work.
“Location IS everything,” Distler says, looking back on the experience. “I thought having parking at a place just half a mile from downtown Princeton would be very valuable. It pales in comparison to having easier access to the many people who come through Princeton to work, visit the school, shop, attend McCarter, etc.”
So last summer Distler stepped back, revised his plans, and tried a new angle. The old Elements closed last June, and the new Elements restaurant is scheduled to open next month, radically reinvented, downsized, and now located on the floor above his other restaurant, Mistral, on Witherspoon Street.
It’s not the first time in his career that Distler has had to admit defeat, but if the new Elements succeeds, it also won’t be the first time he has learned from his mistakes and bounced back stronger than ever.
Distler was born on Long Island, the son of a restaurant equipment salesman and a homemaker. He stayed on Long Island until college, when he left to study economics at Tufts. He graduated in 1974 after three years and went on to get an MBA at NYU. It wasn’t a passion for business that led Distler to study it. “I figured I had a choice of either three years in law school, or two years in business school,” he says. “I didn’t have any grand ambitions, but I wanted to move forward and see where the road led.”
It was at Tufts that Distler met his wife, Roxanne, who became a pediatrician. The couple moved to the Princeton area after Roxanne got a fellowship at the Children’s Hospital of Philadelphia, later working at a Princeton-area pediatric practice.
With his MBA in hand, Distler went to work for Coopers and Lybrand, which was one of the two companies that would become Pricewaterhouse Cooper. He left there to work for one of his clients in the investment banking business, BEA Associates.
BEA was an odd duck on Wall Street, an investment firm with a progressive management culture. “It was very eye opening into — although I hate to use this word — more liberal forms of managing people and systems,” Distler says. The company was run with what Distler calls participatory democracy. No votes were ever taken, but everyone had a say at meetings. It was common for higher-up managers to take suggestions from lower- ranking employees. “We had participatory management meetings,” Distler says. “They believed in giving people the tools they needed and letting people figure out how to do the job as well as possible and not have heavy-handed management.”
Working at BEA made a big impression on Distler, and helped form the management style he would later use in his Princeton-area businesses.
After five years at BEA, he moved to a job at the venerable Wall Street firm of Warburg Pincus, where he started as a controller.
Warburg Pincus has invested more than $45 billion since it was founded in 1935 and is known for its venture capital business and international investing, with stakes in companies in 35 countries around the world. In the 1990s the firm had another side of the business that was devoted to business consulting. “It was a phenomenal organization,” Distler says. “They have incredibly high integrity and really smart guys.”
Because he was on the accounting side of the business, Distler wasn’t making any deals himself. After a few years, he was promoted to treasurer and became a partner. Only towards the end of his career did he dip his toes into investing himself, by managing some deals with education companies. Meanwhile, the business was flourishing. “The ’90s were a great time to be in this business,” Distler says. “We sold our investment counseling business to Credit Suisse. That was a big deal and brought in a ton of money for all the partners. As a result of their good investing and my good fortune I had a fairly comfortable amount of resources available to me.”
The wealth raised questions for Distler that he hadn’t had the luxury of thinking about when he was commuting hours every day making a living. “That enabled me to look around and say, ‘what do I really what to do?’” he says. One thing he did not want to do was the daily commute. “What happens when you have to do that every day is that you sort of go on autopilot from Sunday night to Friday night. You get up early, take the train, and you don’t have a lot of time at home until Friday night comes. After a while, you don’t think about it. The trade-off is fairly clear.
“I never looked for another job regionally. There are certainly some successful hedge funds in Princeton, but the investment in travel time and travel expenses was compensated many times over by working at a New York firm instead of a Princeton firm. But when I no longer had to do it, I chose not to.”
At age 50, Distler was semi-retired and began to pursue his second passion, politics. Distler, a free market advocate, investigated running for congress as a Republican. His old boss had warned him that politics was a much dirtier business than he was used to, but Distler decided to give it a shot. Getting into national office would mean defeating a formidable but not invincible opponent in incumbent Rush Holt, who had recently defeated a Republican challenger, Dick Zimmerman, by just 500 votes.
But by the mid 2000s, the political landscape had changed, literally. Redistricting masterminded by Republican strategist Karl Rove had taken Hunterdon County out of the 13th congressional district, leaving Holt with solidly blue Princeton and Trenton and fewer suburban Republican-leaning residents to challenge them. “Rush Holt had a 30,000-vote advantage, and I was not going to spend my money beating my head against that wall,” Distler says.
There was a personal element, too, for Distler abandoning his dreams of being a politician. True to his former boss’s warning, Distler realized that electoral politics really was dirty, and that winning an election would mean going negative, and Distler didn’t want to do that.
Distler decided instead to influence politics another way, by founding a think tank called the Center for Policy Research of New Jersey, which promoted free market ideas. Distler says the group had a few small policy successes in Trenton before Distler stopped funding it. “One of my few regrets was that I wish I had gotten to Washington in one fashion or another,” Distler says.
Just as Distler’s political ambitions were being quenched, his career as a businessman was just getting started. When he left Warburg Pincus, he held on to a personal stake in some of the education companies he had invested in, the most successful of which was Apex Learning. The online education company, located in Seattle, does about $50 million of business a year. A second company, a two-person firm called Teachers Support Network, located at 211 Nassau Street, helps school districts recruit highly qualified teachers. “I believe both are now worth more than I put into them,” Distler says. “But until you sell, you just don’t know.”
Distler also had plans for Princeton that would prove much more visible and controversial. He purchased two properties next to each other on Bayard Lane. One was a neighborhood watering hole called Mike’s Tavern, also known as “Grandma’s,” and the other was Stephanelli’s Garage, which was a car repair and rental business.
“When I left Pincus, I decided I wanted to bring things to Princeton that they didn’t have in some way or another, although I didn’t know what that meant,” he says. “My great idea was to put a jazz club in Princeton. I thought it would be cool and fun. It would have been a state-of-the-art jazz club, and the garage would have been used for overflow parking.”
Distler says he is not really a jazz fan, but thought the concept would be welcomed in town. Instead, he faced a neighborhood seemingly united in opposition against him when he went to get zoning variances from Princeton in 2006. “The neighbors came out in force and were very unhappy about it,” Distler recalls. Rather than fight, Distler abandoned the jazz club idea.
Not for the last time, Distler changed course. “I found myself with two pieces of property and one liquor license and nothing to do with it,” he says. “I started fishing around for ideas, and somebody proposed starting a bank.”
Thus, out of acrimonious zoning meetings, the Bank of Princeton was born. The site of Mike’s Tavern would not become a jazz club, but instead became the location for the first community bank founded in Princeton in 30 years. Distler joined with developer Ross Wishnick and a large group of local investors to found the bank.
In a coincidence, Wishnick graduated from Tufts in 1974, the same year as Distler, and the two had never met each other in college. Wishnick had already founded another successful community bank, First Washington, based in Windsor, and had sold it. To serve as president of the bank, they tapped Peter Crowley, a career banker who worked at Bank of America, Citibank, and PNC (and is now head of the Princeton Regional Chamber of Commerce).
“All you needed to start a bank at that time was $6 million, a president, and a lease” Distler says. “It was a good economic time. A lot of people had heard of other people who had made money investing in banks — sometimes six to eight times their investment in a few years.” The bank, headquartered at the old Mike’s, quickly raised $30 million before it began to turn investors away. “I’m not sure how much higher we could have gotten,” Distler says.
The idea of a community bank was popular because of the growth potential, and because the money would be lent out to build up local neighborhoods.
Distler’s timing could not have been better. No sooner had the Bank of Princeton opened its doors than the financial crisis caused havoc in the established banking sector. “Virtually every bank that existed got caught up in a lot of bad loans. We had fresh capital and no mistakes under our belt. We were in effect the only lender in town for a few years until everybody else got back into it.” The Bank of Princeton lent money mostly to commercial projects. At first the bank shied away from speculative investments, but as the economy improved, it has funded a broader spectrum of ventures.
The Bank of Princeton did things that no conventional bank would do. It didn’t even have any bankers on its board of directors. “We never claimed to have banking expertise,” Distler says. “We were all sort of entrepreneurial and self starters.” The bank gave stock options to every employee, right down to the tellers. “We wanted everyone to be invested in the success of the bank,” he says. The business went through four presidents and three chief lending officers in the first four years until it had what Distler considered a rock solid management team.
The bank now has 12 branches. The initial hopes of a quick increase in value and payout did not come to fruition because of the recession, but Distler estimates the bank is now worth three times its initial value when it opened in 2007 — a respectable return for shareholders.
With the Bank of Princeton now occupying one half of Distler’s investment properties, he turned his attention to the old garage. Once again he decided to bring something New Yorkish to Princeton — a high end restaurant. The garage, which Distler now says was a bit too large for his vision, was converted into an ultra-modern setting to showcase the creations of the respected chef Scott Anderson. It opened in 2008.
The bar sold high-end craft cocktails, and the menu featured dishes that no one else in town was making at the time. Its 48-hour short rib, cooked sous vide, was a smash hit. “Elements’ short ribs were simply the best I have ever tasted,” said one writer from New Jersey Monthly. Critics praised Anderson’s imaginative cooking, and the restaurant took in piles of awards.
And yet, for all its success at making great food, it wasn’t making money like Distler had hoped. “The original Elements was financially disappointing, although we put out spectacular meals,” he says. Distler sold the building and its many expensive features to a private consulting firm, Diversity Inc., last year.
In 2013 Distler opened a second restaurant: Mistral, on Witherspoon Street. Mistral is a scaled-down, faster version of Elements, and also features Anderson as executive chef. Closing the old Elements allowed Distler to use his liquor license at Mistral, which used to be BYOB and now features a full drink menu and an attached high-end cocktail bar. That license will also apply at Elements since the two establishments will be in the same building now, when it opens in July. Distler notes that transferring the license from Bayard to Witherspoon would not have been possible had Princeton borough and township not consolidated in 2012, since the old Elements was in the township and Mistral was in the borough.
The new Elements will have seats for only about 25 or 30 diners, about half of what it had at the old location. It will also have a radically different service model. Diners will get their food not from waiters, but from chefs, who will bring meals out and explain them while they serve. Because by law chefs cannot be paid by tips, the restaurant will have a 20 percent service charge instead. “The concept is becoming more common in California,” Distler says.
Mistral has been a success in its own right, Distler says, with its outdoor fireplace seating patrons year round, even in the dead of winter.
Since Elements opened, the high-end restaurant scene in town has become more competitive, with new restaurants opening and old ones increasing the quality of their menus. Distler, ever the free market advocate, thinks the competition is good. “If I’m a customer in town and I think Elements is the greatest restaurant ever, I’m still not going to eat there every day,” he says. “It’s good to have Princeton become a Mecca for restaurants. It’s becoming better known. If you look at New Jersey Monthly’s top 25 restaurants, five of them are here. Princeton is going to get very big in New Jersey.”
Distler, who has three children and lives in New Hope now, has also engaged in philanthropy since retiring from Wall Street. He led the first half of the fundraising drive to build the University Medical Center of Princeton at Plainsboro hospital, raising $160 million. He has quietly given to other causes, including donating to his alma mater. He also funded an economics program for Princeton High School, which he made anonymously since his children were enrolled in the school district at the time. He is currently deciding whether to focus his charitable contributions in Princeton or in the New Hope area, his new home.
He is also still working to make his local investments pay off. “We have very high expectations,” he says of the new Elements. “The Bank of Princeton project has been rewarding in every regard. Elements has been intellectually and emotionally satisfying — I hope some day for it to be remunerative at the same time.”
Mistral, 66 Witherspoon Street, Princeton 08542; 609-688-8808. www.mistralprinceton.com