Burning Ambition : Cigar Club Owners See Bright Future in Smoke-Filled Rooms

United Restaurants, the Westwood-based owner of the Love’s chain of barbecue eateries, has decided that where there’s smoke, there’s profit.

But United Restaurants is betting its corporate dollars on another kind of smoke--not produced by hickory wood but by cigars, preferably expensive ones.

United Restaurants is expanding into New York and Washington, D.C., with its 18-month-old Beverly Hills experiment in the recently trendy world of cigar smoking, the Grand Havana Room.

If you’ve never heard of or seen the Grand Havana Room, don’t feel left out. Or do feel left out, because that’s the whole point of the Grand Havana Room.

The private cigar smoking club wears no signage on its tony Beverly Hills corner. It’s telephone number is unlisted. Entree is via a special elevator operated with keys given only to members and the staff. And you can’t easily join the celebrity-thick membership roster because the waiting list stretches some 200 cigar-lovers long, according to Harry Shuster, chief executive of United Restaurants, and his son Stanley, who runs the Grand Havana Room.

The Shusters hope eventually to replicate this exclusive atmosphere in several cities. Their smoky vision also includes cigar retailing and the company’s own specially manufactured line of cigars.

“We want to become a fully integrated cigar company,” the elder Shuster said.

So how does a company go from smoked ribs to plain old smokes? To selling single cigars that cost more than an entire meal at a Love’s?

It’s all in the art of the deal for Harry Shuster, the entrepreneur behind the once-famous, now-defunct Lion Country Safari in Irvine.

“I don’t know how many liquor licenses are in my name, and I’ve never had a drink in my life. I’m a very occasional cigar smoker, but . . . the future of United Restaurants is in cigars,” Shuster said. “I think it’s a very good corporate opportunity.”

Cigars and cigar bars are hot these days.

Despite well-documented health concerns related to the long-term use of cigars, stogies have undergone a profound image shift in the last few years. No longer just the guilty pleasure of old fogies in dark paneled rooms, cigars have been discovered by baby boomers and Gen Xers.

“The industry never saw it coming,” said Norman Sharp, president of the Cigar Assn. of America, a Washington-based manufacturers’ trade group. “Sales are constrained only by the availability of quality cigars.”

U.S. sales of cigars fell during the 1970s and ‘80s from nearly 8 billion in 1970 to a low of 2.1 billion in 1993.

But sales began rising again in 1994, led by a boom in hand-rolled “premium” cigars, which sell from $1 to more than $20 each. This year, Sharp estimates, about 3 billion cigars will be sold in the United States, up 17% from 1995. Of that, about 260 million will be premium cigars, a sales total up nearly 60% from 1995.

Some well-known manufacturers have huge backlogs of orders and some retailers are predicting shortages of the best cigars for the holiday season.

Another indicator: subscriptions to Cigar Aficionado magazine, a New York-based quarterly devoted to the cult of the cigar, have exploded since its debut in 1992, said Publisher Marvin R. Shanken. The last issue, which featured Demi Moore on the cover, had a paid subscription of 400,000 and weighed in at 466 pages. A year ago, Cigar Aficionado had 200,000 subscribers, he said.

Sharp attributes the cigar sales sizzle to the popularity of “cigar evenings” at hotels and restaurants, the glossy attentions of Cigar Aficionado and the cigar’s ability “to recapture its traditional image as a symbol of success and celebrity and quality.”

Also at work is “the backlash factor,” in which people who have attained adulthood and success resent being told what to do, Sharp said.

“Cigars are so politically incorrect that it makes them more attractive to those who refuse to go along with the herd in today’s militant, neo-prohibitionist environment,” he said.

Shanken professes no objectivity on the subject. “Smoking a cigar is pleasure,” he enthused. “It’s heaven on Earth.”

United Restaurants’ Grand Havana Room taps into cigar smokers’ desire for luxury and the ability to enjoy a good smoke in peace, the Shusters said.

The club and patio dining area occupy the floor above a Beverly Hills bistro called On Canon, which United Restaurants also owns. A special elevator inside the restaurant, which is also accessible from a paparazzi-free parking garage below, whisks members to the high-ceilinged room filled with plush couches and comfy chairs arranged in conversation groupings.

Only a hint of the previous night’s earthy-fruity cigar smoke lingers, thanks to a $250,000 ventilation system and nonabsorbent upholstery fabrics.

The centerpiece of the club is a glass-walled room of 450 Spanish cedar humidors, where cigars are stored at the optimum 70 degrees and 70% humidity. Each small humidor bears a brass plate with a name that, more likely than not, has a familiar ring to it.

The membership roster is heavy with Hollywood’s elite, ranging in age and attitude from Jason Priestly to Milton Berle.

Oscar-winner Mel Gibson maintains a cigar-crammed humidor there. (“I’m always having to remove notes that women have put inside,” Stanley Shuster quipped.)

Other well-known members include Danny DeVito (“His humidor is a little lower than the others. . . . “), Andy Garcia (“Half the time I have to wipe lipstick off [the nameplate on his humidor] because ladies are always kissing it. . . . “) and the Baldwin brothers, who share a fraternal humidor (“The Baldwins are so sloppy I’ve had drawers made for them. . . .”). Studio heads, producers, directors and talent agencies are also represented. The Grand Havana Room has some female members, such as actress Tia Carrere (of “Rising Sun” and “Wayne’s World”).

Since opening in April 1995, the Grand Havana Room has had some famous visitors, chief among them President Clinton.

“When I met with him, he was quite clear I was not to give him any Cuban cigars,” which were banned in 1963, Shuster said. “One thing about this club is we don’t get involved with Cubans [cigars]. It’s a big no-no.” A newspaper photo of Clinton with a cigar clenched in his teeth is framed on the club’s wall, accompanied by a nice thank-you note.

The New York version of the Grand Havana Room is expected to open in January in the space formerly occupied by the landmark Top of the Sixes restaurant, which sat atop an office building at 666 Fifth Ave. It will be much larger than the one in Beverly Hills and will house 1,000 individual humidors, a private screening room, a communications room with faxes, stock-quote machines and a conference room, Harry Shuster said.

The Washington Grand Havana Room should be open in time for the inauguration, with 750 humidors, Shuster said. It will be on the city’s famed Restaurant Row, he said.

United Restaurants is eyeing San Francisco, Dallas and Las Vegas for Grand Havana Rooms or for retail cigar shops that will feature the company’s own line of Dominican-manufactured cigars, Shuster said.

The expansion is being financed with funds remaining from an $8-million stock offering in 1994 and with $1 million raised from private investors. Joining the Beverly Hills Grand Havana Room costs $2,000 up front and $150 a month for individuals and more for corporations.

The Grand Havana Room “is a very profitable enterprise and the restaurants, as a group, take a lot of money with very little return,” Shuster said. United Restaurants owns three Love’s barbecue restaurants, franchises 14 others and has licensed the rights for Love’s restaurants in Indonesia. In addition to On Canon, it owns the majority of a popular Italian restaurant in Santa Monica called Il Forno.

United Restaurants’ most recent financial statement shows that revenues are rising and losses are shrinking. The company’s stock trades over the counter.

The cloning of the Grand Havana Room is unusual only in the club’s extreme exclusivity. Establishments that pamper the cigar smoker are becoming almost common.

“There are definitely a lot of cigar bars and lounges that have opened up in the last six months. It’s hard to find an area of the country that doesn’t have one yet,” said Robert Langsam, “chief smoking officer” of the International Assn. of Cigar Clubs, an informal network of smoking dens.

Most are open to the public or charge a minimal membership fee of $25 or so, he said. Langsam said his own lounge in Naples, Fla., called Heaven is doing so well in less than a year of operation that he is about to open a second.

Shuster contends he is not worried by the proliferation of cigar clubs or the possibility that the cigar craze might burn itself out.

“Those other clubs are all open to the public. I’m not entirely sure how they make money,” Shuster said.

“It’s not a business that I am interested in. They’re going to jump open like Starbucks coffee shops and I don’t know the longevity of that, but I’m happy for them as long as it lasts.”

Shanken believes that cigar clubs that are well researched and well located--and he counts Grand Havana Room among them--will thrive even if others do not.

Back at the Grand Havana Room, member Arnold Schwarzenegger is expected for lunch. Deals will be cut, single-malt Scotch will be sipped at the tobacco-leaf-topped bar and many cigars will be savored.

“When you sit down to smoke a cigar, it’s a ritual,” said Stanley Shuster. “It’s like playing golf. When you’re on the golf course, nothing else matters.”

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Popularity Rekindled

Sales of cigars have wafted higher since 1993 as the world of stogies has been discovered by baby boomers and Generation Xers. Annual U.S. Cigar Consumption in billions:

1996*: 3.0

* Estimate

Source: Cigar Assn. of America