CHANGING APPETITESSep 14, 2017 01:10PM ● By Sophie Johnson
WALNUT CREEK’S DINING DESTINY
By Sophie Johnson
Photography by Josh Isaacs
In late July, shocked Lark Creek Walnut Creek customers were greeted with papered restaurant windows and a sign on the door with a simple message, “Thank you for your patronage over the years! We have decided to close our doors.” Once the darling of Chef Bradley Ogden’s gastronomic empire, Moana Restaurant Group—the company which owned Lark Creek—cited high rent, revenue losses, extreme competition, and increased wage demands as the reasons behind the closure. Commentators on social media bemoaned Lark Creek’s outdated menu and white table cloth style, as well as a menu that fell short of expectations. Others are still reeling from the loss of a restaurant that put Walnut Creek on the Bay Area culinary map.
A few weeks after Lark Creek closed, Sunol Ridge followed suit on the same block of Locust Street, followed by House of Chicken and Waffles at Olympic Place. More recently, Library on Main also shuttered its downtown eatery. Given the challenges faced by the local restaurant economy, which mirrors state and national trends, Walnut Creek Magazine met with a group of savvy, local restauranteurs to get their take on the state of the food industry and what the future holds.
The number one challenge is the labor shortage. In a time of low unemployment, finding qualified applicants for physically-demanding jobs, who are willing to make modest wages, is becoming increasingly difficult. Chef Kevin Weinberg of Walnut Creek Yacht Club says, “We used to run an ad on Craigslist and hundreds of resumes would come in. Now, I’m lucky to get one a day and then hope they show up for the interview.” With plenty of new buildings going up in Walnut Creek, Weinberg says the local construction industry has attracted restaurant workers with higher wages.
Another reason for the labor shortage are delivery jobs in the gig economy—UberEats, DoorDash, Grubhub, Munchery and so many more—which present new sources of income and the allure of entrepreneurship. And Walnut Creek has a lot of restaurants. Zack Scott of Havana sees it all around him, as downtown retail spaces are converted from selling goods to selling food. “A dress shop can do business with two employees, but a restaurant needs 20 just to operate. The hours of operation are longer, the parking spaces required for workers are out of control, and pretty soon, you have too many problems to fix.”
Some have pursued creative solutions. Joe Stein of Sunrise Bistro only hires at the bottom of the ladder, and then promotes from within. “I hire dishwashers and hosts from local culinary programs such as the one at Mt. Diablo High School.” Joe has an inside track on these graduates, as his mother, Sunrise co-owner Cindy Gershen, created a curriculum and training program at Mt. Diablo focused on sustainable hospitality. Another place for restaurants to find culinary talent is at the Diablo Valley College’s Culinary School. Chef Rodney Worth, whose portfolio includes Danville’s The Peasant and The Pear says, “Some nights my teenage son runs my pizza line.” Worth also offers current employees cash bonuses for referrals stating, “My best people come from my current staff.” Susan Rizer of Corner’s Tavern agrees. Her dedicated workforce has been built from both employee and patron referrals.
The minimum wage is going up across the nation. And while all service industries are affected, the living wage movement in California affects restaurants disproportionately. Weinberg has calculated that the .50 cent increase stipulated to begin in 2018 will cost his business $40,000. With narrow two to three percent profit margins common, wage increases can spell disaster for small restaurants. But make no mistake, all of the owners at our roundtable feel strongly that their loyal staff deserves fair compensation, but wage inequality is a looming issue.
The restaurant industry has long struggled to shrink the pay gap between front-of-house and back-of-house staff. Kitchen line cooks, prep cooks, and dishwashers typically earn a set hourly rate, whereas front-of-the house servers earn minimum wage plus tips. Some restaurants pool tips, but most do not, since the State of California prohibits owners or managers from requiring tipped staff to share tips with non-tipped staff. This means the sharing gratuities is left to the discretion of the servers. Rocco Biale of Rocco’s Ristorante sees a changing future, “The pay discrepancy between the four walls of a restaurant is unsustainable. On top of the minimum wage, servers often get $30 or $40 an hour more. A cook, working just as hard, will expect similar pay.”
Raising food prices on menus may seem like an obvious solution, but that’s a slippery slope. Do diners really want to pay $25 for a burger? Biale, along with others in the California Restaurant Association, are pushing for a state-wide adjustment to the language of the minimum wage laws to include tips. Forty five other states do just that. Another option being explored is tacking on service surcharges to checks similar to other hospitality sectors like hotels, airlines, and rental cars. Others point to a tiered minimum wage system based on job function or experience.
“Why should a high school teenager get the same rate of pay starting off as a long-time prep-cook who has years of work history? If things don’t change, we will be left with either a Chipotle/Panera model or super high-end dining. No one solution fixes the issue, but it helps close the gap, saves businesses, and keeps people employed,” says Biale.
Within just a few blocks of Locust street, where Lark Creek once prevailed over the downtown dining scene, over the past couple of years Broderick, Sauced, Limon, Lokanta, Momo’s, Rooftop, Slice House, and Teleferic Barcelona—to name only a few—have opened. An oft-cited Ohio University study reported that 60% of restaurants close in their first year; 80% close within five years. Insiders debate these numbers, but the food business is undeniably tenuous. As public as many of Walnut Creek’s closures have been, openings have far outnumbered them. This points to a bubble. For our panel, there are just too many tables and not enough bellies.
“People keep opening restaurants using their trust funds or the backing of big corporations. I sold one of my restaurants in Blackhawk and closed another in Napa this year. There are plenty of people eating out, but Walnut Creek is flooded,” says Worth. “When True Food opened, it hit me, but we’re lucky because we get Broadway Plaza foot traffic,” says Corner’s Rizer. Ben Shavar, whose family has owned five East Bay Buttercup Grill restaurants for decades, sees change as inevitable, “We are in a bubble and before it pivots, it’s going to be painful.”
A restaurant moratorium by the city of Walnut Creek isn’t likely, but the owners were instructive in how other local towns thwart over-extension. Danville charges a parking fee to builders of large restaurants meant to deter a boom & bust cycle. Napa has a water main fee that prevents property owners from converting a retail shop into a grub hub. “Once a space becomes a restaurant, it generally stays a restaurant,” Jay Hoyer, CEO of the Walnut Creek Chamber of Commerce says. “Spaces sometimes go from retail to restaurant, but not usually the other direction.”
Liquor licenses are a common way that cities limit the number of restaurants and bars. The City of Walnut Creek has long struggled with its dual identity as a safe residential community and a vibrant East Bay dining and entertainment destination. When new liquor licenses are granted, they come with a 10 or 11 pm last call clock, while older establishments like Mr. Lucky’s are grandfathered with late night hours, even on week nights. Zach Scott of Havana says, “This town is now a city. We need a more vibrant nightlife. Due to the convenience of Uber and Lyft, we are losing customers to Oakland and San Francisco.”
With more new restaurant openings on the horizon—Pacific Catch, Gott’s Roadside, Bay Green Salad, Take One Pizza and Bounty Hunter to name only a few—the question remains, can Walnut Creek continue to sustain unlimited restaurant growth? The answer depends on the size of your stomach.