Where dining is out
Restaurants suffer during Moscone Center construction
On most afternoons, restaurateur Kathy Fang could count on them to stream into the dining room of her eponymous South of Market restaurant: a group of video game designers. A handful of dentists. Titans of technology.
Fresh from Moscone Center conventions, they’d put in multiple orders of honey apple prawns or Nanking sesame chicken. Bottles of high-end Napa Valley wine were poured until empty.
“These were the people that make triple orders of dumplings and just ask for the dishes to keep coming,” Fang said. “Tables stacked with plates of food they wouldn’t even finish.”
Not so much anymore. For a cadre of restaurants like Fang,
all within a mile of the Moscone Center, 2017 has been relatively devoid of convention-goers crowding in for big lunches and dinners. The change in dining habits can be attributed to Moscone Center’s ongoing 3½-year, $551 million expansion project. The work and resulting closures slated for this year led SF Travel, the city’s tourism marketing association, to predict in January that the city’s number of tourists would drop by 290,000 this year.
As an economic driver in San Francisco, and especially its immediate neighborhood, Moscone Center is significant. Thirty-five percent of the city’s 25.2 million visitors in 2016 came for conventions or meetings, according to city officials.
Despite the grim forecast, convention-friendly San Francisco restaurants are holding on, waiting for the expenseaccount holders to return.
“The crowds are spending their money differently now,” said Sharon Nahm, chef at E&O Kitchen, located roughly one mile from Moscone. Despite the distance, it’s a popular convention destination due to its private dining facilities, which account for 25 percent of the restaurant’s business.
Knowing the drop-off was coming, Nahm said, the E&O team “budgeted less aggressively” for 2017 and shifted focus to other areas, such as happy hour. The result: E&O Kitchen was 10 percent above its projected budget for the first two quarters of the year.
“This quarter is typically our slowest quarter,” Nahm said. “If we can come out of (the
“The crowds are spending their money differently now.” Sharon Nahm, chef at E&O Kitchen
third quarter) in the black, we’ll be very happy.”
E&O Kitchen’s approach is just one example of the various ways restaurants braced for change this year, said Gwyneth Borden, executive director of the Golden Gate Restaurant Association. Bluestem Brasserie, around the corner from the Moscone Center, says 20 percent of its profits come from conventions. To curb predicted losses, the restaurant struck more partnerships with local businesses and hotels.
“Some are seeing more of a reduction in spending this summer versus other summers,” Borden said. “But there are a lot of people saying it isn’t as bad as they thought it would be.”
Those who didn’t plan for the change have been affected, however. Thad Vogler’s Trou Normand, less than a half-mile from the center, has had a roughly 10 percent dip in profits this year.
Despite walking and driving past the Moscone project each day, Vogler says it wasn’t until his accountant pointed out other establishments in the downtown area were also performing below expectations that he made the connection.
“I was relieved, actually, to find a reason for the change and embarrassed at how myopic I’d been,” he said. “I get so caught up in the day-today that I forget to look at the big picture.”
Even with recent construction milestones like the completed expansion of Moscone North and South, both closed since April, most of the work at the complex won’t wrap up until the end of next year.
Bay Area restaurateur Adriano Paganini has multiple locations near the Moscone Center, including Delarosa, which opened a second location a block away on Yerba Buena Lane in 2015. He said Delarosa’s profits are up 10 percent compared with last year, though he has seen changes with his other businesses.
“We’ve seen an impact at the Super Duper Burger at the Metreon. There was a huge influx of people when a convention was in town, especially at breakfast,” he said.
If all goes as planned, the Moscone Center will eventually span 1.5 million square feet, with a 500,000-square-foot exhibition space, a 50,000-square-foot ballroom, and 80 meeting rooms. Earlier this week the facility, with portions still unfinished, welcomed 30,000 people to the Mobile World Congress Americas convention.
“We can manage this. We’re not solely open because of the convention. If our business relied on that, we’d be in trouble,” Fang said. “It being closed obviously hurts. It’s not going to cause us to close or anything."