Palo Alto’s dining renaissance

There’s a generally held perception that the Peninsula dining scene is dead.

But a walk through downtown Palo Alto on any given day at dining hours will tell you otherwise. On hot summer nights, hordes of people stand in a blocks-long line for close to an hour to eat ice cream sandwiches. Throughout the year, hungry diners put their name on a waitlist at an Israeli hummus shop owned by a local tech entrepreneur. It’s nearly impossible to get a reservation at 18-year-old Greek classic Evvia, unless it’s made plenty in advance or diners are willing to eat after 9 p.m. Parking is notoriously difficult.

Palo Alto is undergoing a dining renaissance of sorts, with a host of niche, casual restaurants leading the way.

“There’s an evolution,” local restaurant consultant Frank Klein said. “A base has been built, and now people are understanding that other (restaurants) can be successful.”

That base remains, with some longstanding restaurants like Evvia still holding their own amidst all the change. But newcomers to the scene indicate a move away from the city’s higher-end roots and toward casual eateries that fill a specific dining need in Palo Alto.

Take Oren’s Hummus Shop, an Israeli restaurant that opened at 261 University Ave. about three years ago. The small, 45-seat eatery is consistently full, with people waiting in line outside on almost any given night — not just weekends — to rip homemade pita and dip pieces of it in hummus made with garbanzo beans imported straight from Israel. Oren’s also does enormous take-out business, so much so that the ownership is plotting a new location in Mountain View with a dedicated register and area for take-out customers.

Oren Debronsky, an Israeli-born technology entrepreneur, opened the restaurant in 2011 with his wife and another couple, David and Mistie Cohen.

“The short of it is there was really no good hummus, falafel, Israeli food,” said David Cohen, the restaurant’s executive chef. “And being the entrepreneur and outgoing guy who solves problems, Oren basically said, ‘Well, if it doesn’t exist, I’m going to make it.'”

So he did. Oren’s concept isn’t rocket science — it’s basically Israeli street food done well, at reasonable prices and with good service — but it hit a hard-to-find sweet spot in the current Palo Alto dining scene.

“We have what people are wanting in the overall dining experience: a fun, light, airy environment; a communal experience; really good food, healthy food; quality service — all at a pretty reasonable price,” Cohen said.

Oren’s is part of what Cohen sees as an overall trend in the dining world away from the high-end, white tablecloths of Palo Alto’s past.

“I remember when Spago was here and Zibibbo was three times as big and there was that whole trend going on,” Cohen said, referencing celebrity chef Wolfgang Puck’s American restaurant, Spago, and Zibibbo, an upscale Mediterranean restaurant still operating on Kipling Street. “There was that higher level of dining … and that’s kind of tapered off, following a general trend of dining.”

Though Cohen himself comes from the fine-dining world — he got his start in Philadelphia, went on to receive a culinary degree from renowned European cooking school Le Cordon Bleu and spent years chefing in Napa, San Francisco and the South Bay — that’s not the future, he said.

“You look at niche places like CREAM — in the summertime there’s 80 people standing in line for an ice cream sandwich. If you told a kid from Philadelphia that’s how it was going to be, he would have never believed you.

“I think it really epitomizes, I’ll boldly say, the direction of American dining.”

Mario Ortega, who has been Evvia’s chef for more than seven years and before that worked at San Francisco sister restaurant Kokkari, agrees.

“I think there’s a big opportunity for that middle-ground type place to do well here,” he said. “It doesn’t necessarily have to be an Evvia or Tamarine or Reposado.”

But, he added, just any restaurant won’t make it.

“You can’t just do what’s already here. … It’s still (about) putting together a package for people to draw (them) in.”

Cohen sees other Palo Alto restaurants as heading in the same direction of the quick, casual, health-driven concept that are successfully luring in today’s diners. He referenced LYFE Kitchen, the informal, health-centric restaurant on Hamilton Avenue, and Umami Burger, the outpost of a very popular, upscale Los Angeles-based burger chain that couldn’t contrast more with local burger establishments like Kirk’s Steakburgers.

“You’re going to see these concepts get bigger and bigger,” Cohen said. “It’s going to — we hope, LYFE hopes, Umami Burger hopes — reshape some of American dining. And bring that quick, casual, healthy idea for the first time into the mainstream.”

Though it seems simple, not everyone can make it work.

Blocks away from Oren’s is 185 University Ave., which is now home to Sam’s Chowder House, the second location of a Half Moon Bay seafood restaurant. Sam’s opened in November of last year under the same ownership as the space’s previous tenant: Campo Pizzeria, a sort of farm-to-table Italian restaurant with pizza, pasta, small plates and the like cooked by well-established San Francisco chef Sean O’Brien.

Campo closed after less than nine months in business.

“As much as we love Campo, there are eight Italian restaurants and 10 pizzerias in contiguous downtown Palo Alto, and there aren’t any seafood restaurants like Sam’s,” a goodbye note on Campo’s website read when it closed last September. “So we thought it was time, and we think this is the perfect spot.”

Owner Julie Shenkman said it was the pressure to open another Sam’s that drove the decision to close Campo but acknowledged that the restaurant concept might not have been different enough to make it.

“We knew there were other Italian restaurants in the neighborhood, but in a year, from when we first opened Campo to when we opened Sam’s, the dining scene did change,” she said. “A lot of new restaurants (were) opening and in a similar vein, to the point where it did get to be a crowded market for that type of concept.”

185 University also reportedly has the highest restaurant rent in downtown Palo Alto at $32,000 per month. Rents are an increasingly significant force within the Palo Alto dining scene, many within the industry say.

“It was rumored that Campo was paying between $30,000 to $35,000 (per month),” said local restaurant consultant Klein, who also owns Asian Box in Town & Country Village. “That was what the space was offered to me at. That’s just astronomical. That’s astronomical. You need to do $5 million a year to make that economically viable.”

“He’s the most challenged guy on the street,” said longtime Silicon Valley restaurateur Bruce Schmidt of lessee Paul Shenkman.

Schmidt knows what it’s like to be that guy. He opened Lavanda, an upscale Mediterranean-Croatian restaurant, at 185 University in 2002. He, too, entered the market with the goal of filling a gap in the downtown dining scene, and did so for 10 years until his lease came up and he couldn’t re-negotiate, he said. This is a common, cyclical pattern in Palo Alto. As years-long leases expire, waves of restaurants come and go.

High rents can make or break a restaurant concept in Palo Alto, said Klein, who has consulted on restaurants from MacArthur Park and Junnoon in Palo Alto to Cliff House and Original Joe’s in San Francisco.

“You just can’t say, ‘OK, I’m opening up now and I feel good about now.’ You have to say, ‘What are the economics?’ Not just your business, but what are the costs of your operation in years one, two and three? I imagine it’s going to be a hell of a lot more than people are expecting. And so if you’re paying rents — high rents — and you’re paying more to operate, that can be a death note, even for a good concept in Palo Alto.”

Klein used Mantra, an upscale California-Indian restaurant on Emerson Street he consulted for, as an example.

“Mantra was successful. It was good food, and they were doing good economics. I won’t disclose what they were doing here but they were doing good, good money. It’s just the economics didn’t make sense for what Ashwani (the owner) wanted to put into it.”

“We were very successful as a restaurant, but it was tough as a business,” said Mantra owner Ashwani Dhawan, citing not only rent but also labor and the cost of food as challenging. (Tellingly, Dhawan decided to forego the risk of running a niche, fine dining establishment for a mainstream concept, opening SliderBar Cafe on University as his next venture.)

Signing on to pay high rents, on top of all the other costs of sustaining a business in an already challenging industry, is a significant financial investment — and a risk, especially for independent operators making their first go at a restaurant.

Evvia’s Ortega said he’d love to open a restaurant of his own, but high rents and other costs deter him.

“You really have to play it safe,” Schmidt said. “You can’t be as experimental as maybe they are in Oakland.”

(In recent years, many Bay Area chefs have migrated to Oakland as a place to develop and expand without brutally high rents.)

But for well-established restaurant groups with the capital, infrastructure and manpower to do it, opening a restaurant in Palo Alto is a no-brainer.

And many are doing it. There’s Tacolicious, the small, upscale taqueria empire based in San Francisco. The Tacolicious restaurant group, owned by Joe Hargrave, made its first jump outside of San Francisco to Emerson Street last year, spending $500,000 for construction alone, plus new furniture, supplies and all the trimmings a new restaurant needs.

Across the street from Tacolicious is the space that housed Palo Alto icon Empire Tap Room for two decades but is now being transformed into San Francisco favorite Delfina Pizzeria. When the restaurant closed earlier this year, the space was quickly snatched up by Craig Stoll, a James Beard award-winning chef who owns four Italian restaurants in San Francisco.

Many hail the impending arrival of Stoll’s Delfina Pizzeria — a standout even in the much more competitive San Francisco food scene — as a major sign that increasingly, Palo Alto is a place to be — and eat.

“When we decided to expand, Palo Alto was our first choice of places,” Stoll said. “Outside of San Francisco, it’s one of the more densely populated areas with a really great, well-traveled, sophisticated dining public who is really diverse as well, from tech to professors and families. … It’s the public most similar to people in San Francisco who already appreciate the food we cook.”

In the shadow of the City

The expansion of San Francisco restaurants like Tacolicious and Delfina to Palo Alto inevitably invites comparison between the two cities’ dining scenes.

“From my point of view, there’s still a lot lacking in terms of restaurants (in Palo Alto),” said Howie Bulka, who owns Howie’s Artisan Pizza in Town & Country Village and previously ran upscale French-American restaurant Marche in Menlo Park. “When we really want to go on a food safari or we really want to entertain people or do an upscale dinner, we still eat in the City. And our best eating experiences are still in San Francisco.”

Why is that? Simply put, San Francisco has many things that Palo Alto doesn’t: a longstanding tradition of fine dining and cutting-edge chefs, urban (versus suburban) demographics, a wider labor pool, a booming bar and cocktail scene and a strong tourism industry. All those elements make for a steady stream of eaters and drinkers all over the City, Bulka said.

“When I go to San Francisco, we walk out the door of a restaurant at 10 o’clock and there’s a whole ‘nother crowd walking in,” Bulka said. “The bars are just getting started. In restaurant vernacular, that’s a third seating. That’s a $3,000 Friday night bar tab.

“I don’t think that exists here. Even downtown Palo Alto pretty much rolls up the carpets at 8:30, 9 o’clock. And with us, Friday and Saturday night we have a long wait list, but by 9 o’clock, it’s all over.”

Palo Alto restaurants draw business from the many families in the area as well as the university, which means they’re dependent on those demographics’ schedules, Bulka said.

“Whether it’s a homogenous demographic or not, it’s a fairly homogenous eating pattern (in Palo Alto). So they go on vacation at the same time. They don’t eat out after 9 o’clock. They generally have kids in the car when they’re going out mid-week. … There’s down months and up months because of school schedules, things like that. It’s hard to run a tight-margin cash business on that basis.”

The influx of San Francisco restaurateurs trying to bring a piece of the City to Palo Alto diners, though on the rise right now, is not a completely new trend.

In the 1990s, many notable San Francisco chefs and restaurateurs expanded south. Renowned chef Jeremiah Tower opened an outpost of his San Francisco restaurant, Stars, on Lytton Avenue in 1995. When Stars didn’t make it, investors brought in Puck to run a new restaurant, Spago, in the same space. Zibibbo also opened in the late 1990s as a sister restaurant to San Francisco’s Restaurant LuLu.

“We went to open Zibibbo because Palo Alto was like the next fashion — the next fruitful territory where we could open a similar restaurant,” said Tacolicious owner Hargrave, who worked at Restaurant LuLu at the time.

Though many have tried, both then and now, it seems that no restaurateur can fully replicate the San Francisco dining experience in Palo Alto.

“What they’re trying to do is they’re trying to save you the trip,” said restaurateur Schmidt, referencing Delfina Pizzeria as well as Sam’s Chowder House, which is in Half Moon Bay. “But it’s not the same, and I’ll tell you why. When you go up to the City, you get the whole package. When you go to Sam’s on the coast, you’ve got otters frolicking in the kelp. You’re not going to get that in Palo Alto.”

However, for restaurateurs, there are some downsides to doing business in San Francisco, and Palo Alto can become an attractive alternative.

“San Francisco has become the single most expensive city in the United States to own a restaurant,” said Tim Stannard, founding partner of Bacchus Management, which operates Mayfield Bakery and Café in Town & Country Village, The Village Pub in Woodside and Spruce in San Francisco, among others. “It’s prohibitively expensive now.”

San Francisco has the highest minimum wage in the nation — $10.44 per hour — as well as increasingly expensive real estate, on top of costs such as payroll taxes and expenses mandated by the city’s Board of Supervisors, Stannard said.

“I think that you will see more and more and more flight of restaurateurs away from San Francisco as long as San Francisco continues to make the city more and more expensive,” he added. “People like me will continue to look to communities like the Peninsula that have everything we need.”

But does the Palo Alto dining scene itself have everything it needs? Many in the industry say there are still holes to be filled and much room for culinary innovation.

“I still think there’s a couple things that are needed in Palo Alto that aren’t being served, and those are small, chef-driven restaurants,” Klein said. “Where are the smaller Evvias? Where are the other Mayfields that are off University?”

Bulka said he’s fond of the saying, “There’s a whole lot of restaurants and nowhere to eat.”

“It still strikes me as bizarre how little proprietorship there is and how little really cutting-edge things and quality and most contemporary trends (there are),” he said.

But perhaps it’s this current dining renaissance, more than any previous time, during which those kind of restaurants will finally emerge — and succeed — in Palo Alto.

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