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Exits, Not Entrees, on the Menu

A record number of restaurants are closing in San Francisco, a mecca for fine dining. Others are changing dramatically to survive.

August 19, 2003|John M. Glionna | Times Staff Writer

SAN FRANCISCO — At the Meetinghouse restaurant, they're meeting no more.

After eight frenzied years, chef-owner Joanna Karlinsky recently made the anguished decision to close the cafe she had dreamed of running, even as a child. On the restaurant's last night, her regulars tried to muster the good spirits and camaraderie that had defined the eatery since its opening in a converted Victorian house in Pacific Heights in 1996.

Diners offered champagne toasts and bearhugs. To applause, someone crowned Karlinsky with a toy plastic tiara.

For the 40-year-old Culinary Institute graduate, the evening tasted bittersweet. "I'm tired," she confessed. "I can't fight all the battles just to keep my doors open. And to tell you the truth, running this restaurant isn't as much fun as it used to be."

Karlinsky personifies a distasteful trend that threatens this city's $5-billion restaurant industry and its reputation as a foodie mecca. Since 2001, San Francisco has lost 7% of its more than 3,000 eateries. In the last two years, 168 more restaurants closed than opened -- 50 shutting down in January and February of this year alone.

"Nothing like this has ever happened here," said Kent O. Sims, a Bay Area economic consultant who has written two studies for the Golden Gate Restaurant Assn. "Restaurants open and close all the time. But we've never had an overall drop like this. People are getting slaughtered."

Among the latest culinary casualties are some of the city's most established names. They include Stars, a gathering spot for politicians and high society originally opened by famed chef Jeremiah Tower; the Cypress Club; Brasserie Savoy; the Mission's eccentric Flying Saucer restaurant; Dine, the trendy South-of-Market favorite; and even Maye's Oyster House, a draw for locals and tourists alike since it opened in 1867. Rumors are circulating that one or two nationally noted A-list restaurants could be the next to go.

The restaurant closings are no small deal in a city that considers dining one of its major attractions -- as much as clanking cable cars, crooked streets or signature bridges.

In San Francisco, both residents and tourists spend more time pondering, consuming and then discussing restaurant meals than in any American city outside New York or New Orleans, says Tim Zagat, executive director and co-founder of the popular Zagat Survey Guides.

Sims said San Francisco features more restaurants per capita than any other city nationwide -- a fact made possible by the city's relatively small population, its tourist-based economy and the daily commuter influx. For six straight years, San Francisco has also been crowned by Bon Appetit magazine readers as America's fine-dining epicenter.

The dining decline began with the 2000 fallout and the sudden vanishing act of hungry tech-industry high rollers. In all, the city lost 70,000 jobs; about 50,000 of those were held by commuters who no longer eat out for lunch or grab late-night dinners on the company. For restaurateurs, vacant offices mean empty dining tables.

Then came the Sept. 11 terrorist attacks, a gut punch to the city's tourist economy. It has yet to recover: In May of this year, 24% fewer travelers passed through San Francisco International Airport than in May 2000.

And this fall, San Franciscans will decide on a proposition to raise the city's minimum wage by $1.75 to $8.50 an hour, a figure that will not include tips received by those who wait on restaurant tables. Owners say the new wage will push many more eateries to the brink of insolvency.

"Without question, San Francisco has been the hardest hit restaurant community in the entire U.S.," said Clark Wolf, a New York-based restaurant consultant. "Its demise started before anyone else and has lasted longer." The reason, he said, is that its success was built around two industries -- high-tech and tourism -- "that have both simply vanished."

The city's neighborhood eateries, with low overhead and steady local clientele, remain stable. The most stellar restaurants -- Boulevard, with its haute cuisine; the 150-year-old Tadich Grill in the city's financial district; and nearby Napa's French Laundry -- seem virtually depression-proof.

But many mid-sized restaurants are going hungry. Some owners have fired chefs and returned full time to their steamy kitchens. Others have pressed relatives into service and introduced fixed-price menus. Once-bustling cafes now close on slow days and have shorter hours. And upscale eateries are engaging in a last-gasp trade they once would never have dreamed of doing: take-out orders.

Some restaurants have reinvented themselves. In 2000, the Castro district's JohnFrank restaurant named itself Home and began offering a new line of entrees at half the old prices. "We invented a new concept tailored for the economic times," said owner John Hurley. "And it worked. Where we once did 50 seatings a night, now we do 400."

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