What it takes to open a restaurant | December 19, 2008 | Palo Alto Weekly | Palo Alto Online |

Palo Alto Weekly

Cover Story - December 19, 2008

What it takes to open a restaurant

For owners of St. Michael's Alley, moving to a new location has been a labor of love

As many in the industry will attest, operating a restaurant is a tough business, with a low profit margin, high overhead, inspections, regulations and 16-hour days.

Opening one is even tougher. The price tag to launch a new venture can start at $500,000 and go up from there, according to local restaurateurs.

Michael Sabina and Jennifer Youll, owners of St. Michael's Alley on Emerson Street, are well-acquainted with the costs, and the hard work. They recently opened a second St. Mike's at 800 High St.

The new St. Mike's is a labor of love for the couple. It took 2 1/2 years — with the construction done mostly by Sabina, without the help of contractors. Youll helped design it.

They saved on costs wherever they could. The new restaurant boasts a walnut bar made from an enormous 200-year-old tree that had fallen down in a friend's yard, Italian oak flooring salvaged from a farmhouse in Italy and a mahogany and glass door and windows salvaged from home in Hillsborough.

"We just saved everything we could," Youll said, noting that Palo Alto developer Roxy Rapp helped procure stainless-steel shelving worth thousands of dollars and tables in the bar from Spago after that restaurant closed. The couple also recycled stainless steel from Noah's Bagels when it closed on University Avenue.

They financed the project with as many no-interest-introductory-offer credit cards as they could and borrowed money from their parents. But they used income from the original St. Mike's on Emerson to pay down some of the debt.

The couple bought the space at 800 High — two condominiums — rather than lease them, both as an investment and to secure their restaurant's future.

"You can't easily move a restaurant like you can an office where you can just pick up a desk and move to another building," Youll said.

They'll turn the old St. Mike's into a family-style café offering artisanal pizzas, Sabina said. It's still open.

The new, 100-seat restaurant is serving private parties for now. But sometime in January, the new place will open to the general public, Sabina said.

Sabina and Youll planned a second St. Mike's long before the current economic crisis hit. Most people don't realize how far in advance restaurateurs must think before opening their doors, they said.

Sabina glanced up at the hanging glass sconces above the bar last week. "I had to decide where the lights would be two years ago. I didn't even know where the bar would be," he said, recalling the early stages of building, when the wiring was added.

The couple remains committed to the restaurant for the long haul, they said. They don't expect to get out of debt for five to 10 years. And they haven't paid themselves since April, Sabina said.

Short of the economy going into freefall, the couple believes they can weather the tumultuous times, they said. Even in these tough times, people are drinking a little less wine, but the seats are still full, they said.

"After 9-11, every restaurant in town was empty, but we were still booming. People want comfort. ... We've become established in the community, it's about being here night after night," Sabina said.

The couple originally purchased St. Michael's Alley in 1994, when it was still a bakery-coffee house. Neither had experience in the restaurant business, and they soon had a rude awakening. Some days, they'd only make $90.

"It was difficult to make a living when people came in for a $2 pot of tea. I called Jen and said we would've been better off having people come to our living room. It would've been cheaper," Sabina said.

In 1998, they closed the restaurant for two months and remodeled. It reopened as the St. Mike's customers know today: offering good food at a decent price in a comfortable atmosphere, Sabina said.

When President Bill Clinton and family rented St. Mike's for a party celebrating Chelsea's graduation from Stanford University, it put the restaurant on the map, Youll said.

— Sue Dremann


Posted by govjefstate, a resident of Los Altos
on Dec 21, 2008 at 9:38 am

vern and june gates were the original owners. it was featured in businness week in 1960. joan baez used to sing at lunchtime.ken keasy..pigpen..st michael's was the only coffeehouse south of s.f. there was always good food: soup sandwiches,and a dinner of two choices ....tons of history if all the parties could interviewed...film club on sundays..a beer pub upstairs at the original location

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