San Francisco Chronicle - (Sunday)
Mapping out COVID’s toll on restaurants
When the coronavirus shutdown forced restaurants to go dark in 2020, the future of the industry looked grim. Renowned chef Tom Colicchio predicted 75% of independent restaurants would close for good. San Francisco’s restaurant trade group said the city could lose half of its restaurants.
Yet it’s been challenging to accurately quantify how many restaurants were closed due to the pandemic and to assess the full scope of its impact on the industry. Now, though, data on restaurant openings and closures in the city from 2019 to 2021 — which The Chronicle obtained from the San Francisco Department of Public Health — offers
new insight into the state of the city’s dining industry, and suggests that its future may be rooted in residential neighborhoods.
In a normal year, such as in 2019, roughly as many restaurants open as close in San Francisco. But that balance drastically shifted during the pandemic. In 2020, 335 restaurants closed while 269 opened. Even more — 530 restaurants — closed in 2021 and just 265 opened. (Note: The data includes some restaurants that were temporarily closed and have since reopened, as well as businesses licensed to serve food and drink that aren’t technically restaurants.)
The spike in closures last year was likely fueled by restaurants running out of federal aid, some owners deciding to throw in the towel after temporary closures, and others struggling to rebound amid the continuing pressures of a labor shortage and rising costs, according to San Francisco’s Golden Gate Restaurant Association.
The vast majority of S.F. neighborhoods saw a net loss of restaurants in 2020 and 2021. Officeheavy areas like the Financial District and SoMa were among the hardest hit and continue to struggle, and that shows in the data: The Financial District saw a 17% decrease in restaurants from 2019 to 2021 and SoMa saw an 11% drop. Prominent pandemic closures in those and surrounding neighborhoods included celebrity chef Chris Cosentino’s Cockscomb, 23-yearold seafood restaurant Farallon and the Michelin-starred In Situ.
Residential neighborhoods fared better. The Haight-Ashbury, one of the few San Francisco neighborhoods that saw more restaurant openings than closings, had the highest increase at 7%, followed by the Outer Mission (2%) and Noe Valley (2%).
In 2020 and 2021, 16 restaurants opened along Haight Street. That includes Mexican restaurant Otra, which at barely a year old already has “hard-core regulars,” according to owner Nick Cobarruvias. It’s a classic neighborhood restaurant whose success — despite opening in the midst of deep pandemic uncertainty — has been buoyed most by customers who live close by and come in several times a week, Cobarruvias said.
It’s the same for other new businesses on Haight Street. “The lifeblood is people who live locally within a few blocks,” said Jim Woods, who opened a location of Woods Beer & Wine in the Lower Haight in 2020. By contrast, later that year, he shut down the company’s downtown Oakland location due to the loss of office crowds. The new Woods, which took over the former Mad Dog in the Fog space at 530 Haight St. in June 2020, is doing well, Woods said. It’s on a vibrant block with a mix of newcomers and institutions that draw bar-goers and diners on the weekends. Things are also going well in the Upper Haight, where in late July the Alembic saw some of its highest-grossing sales since the pandemic hit, said owner Kathryn Kulczyk.
The Lower Haight may have fared better during the pandemic thanks to an unusually active neighborhood association, Woods and Cobarruvias said. Michael Gaines of the Lower Haight Merchants and Neighbors Association was instrumental in bringing both Woods and Otra to the neighborhood. He’s developed close relationships with building owners and lease brokers, whom he connects with businesses when there’s a vacancy. The association helped negotiate the return of the beloved Cafe du Soleil in a new space earlier this year, and connected Otra with neighbors who became investors in the restaurant.
Other factors might have contributed to the success of restaurants in residential neighborhoods. Laurie Thomas, executive director of the Golden Gate Restaurant Association, suggested that pre-pandemic rents in places like the Haight were lower than those in super-hot neighborhoods like downtown or the Mission District. Landlords charging higher rents for large spaces might have been more inclined to wait out the pandemic, while owners of cheaper, smaller spaces may have been more eager to cut deals, she said. San Francisco’s parklets and Slow Streets programs also have been hits in neighborhoods like the Lower Haight and Noe Valley, bringing more diners outdoors even during coronavirus surges.
One neighborhood that saw a surprising number of closures was the Mission District, traditionally one of the most vibrant dining destinations in the city. The neighborhood lost 100 restaurants in 2020 and 2021 — second only to the Financial District’s 151 closures in that period. The precise reasons are not clear, though owners pointed to likely factors such as high rents that became unaffordable during the worst of the shutdown and the area’s reliance on visitors.
One of the neighborhood’s notable losses was Mission Cheese, which closed in late 2020 after nearly a decade at 736 Valencia St. Owner Sarah Dvorak’s lease was up, and she couldn’t see a future in which the corridor came back to life enough to justify the high cost of running a business there. Her rent had almost doubled to about $6,000 a month since she first opened the cheese-centric restaurant. The owner of popular tapas bar Cha Cha Cha closed his Mission District location in June after struggling to fill the large, 143-seat space amid declining foot traffic in the area. The original location on Haight Street remains open.
“That high-foot-traffic, high-price area relied on being jam-packed at least a few days a week,” Dvorak said of the Mission. “We weren’t seeing that traffic.”
It was a risk, then, for Ina Lee to open a Korean soju bar and restaurant called Korner Store at the former Mission Cheese space last September. Valencia Street was still “very ghost town-ish,” she said. Business was slow and unpredictable.
But now, Lee said, Valencia is starting to feel alive again and her business is stabilizing. The temporary closure of Valencia Street to traffic on weekends, part of San Francisco’s pandemicborn Shared Spaces program, has helped tremendously, owners said. But ask whether the Mission District feels like it’s back to normal, and restaurant owners give mixed responses.
“It feels to me like a little bit of a waiting game,” said Justin Catalana, who runs Fort Point Beer Co. on Valencia Street. “The Mission is a really special part of San Francisco and hopefully it can get back on its toes.”
Lee remains optimistic about the Mission’s recovery — and plenty of notable restaurants have recently opened there — but pandemic trends have changed the way she thinks about future expansion. Pre-coronavirus, she was tripping over herself to snag a then-desirable space at One Market Plaza near the Embarcadero, to open Matko, a fast-casual Korean restaurant.
She’s now looking at “more vibrant areas” like the Inner Sunset, which saw only a 7% decrease in restaurants, according to the health department data.
“The pandemic changed the whole perspective on location,” Lee said.