IN one Los Angeles restaurant after another, the lights have gone out. With more than a dozen ambitious dining spots failing during the last two months, it’s clear: L.A.'s restaurant scene is going through a shakeout.
The particulars of each closing read like a litany of the standard restaurant woes: warring partners, failed concepts, lackluster food and escalating costs. Only now the problem is being exacerbated by worsening traffic and an economy that is softer than generally acknowledged.
Alex and Opaline had been gone for more than a year when, in August, Wolfgang Puck announced he was closing his Malibu restaurant, Granita; Tim Goodell decided not to reopen his Newport Beach flagship, Aubergine; and EM Bistro, on Beverly Boulevard near La Cienega, locked its doors. By the end of the month, Naya in Pasadena had closed, as had the critically acclaimed Beverly Hills tofu palace, Umenohana. In September, Mix and Citrine in West Hollywood, Four Oaks in Bel-Air and Halie in Pasadena were shuttered.
Add to that Amuse Cafe in Venice, which closed this summer, along with Rika on the Sunset Strip (Central closed in May), Luce in Beverly Hills and Casa Antigua on Wilshire Boulevard in Santa Monica.
And then there is Le Dome. After ordering the Hollywood haunt closed a week ago, owner Ronald Tutor says he “had a change of heart” and is keeping the stove lit even though the “For Sale” sign remains in the front window.
“We are all fighting for the same 500 people who regularly go out to dinner in Los Angeles,” says Caroline Styne, co-owner of Lucques and A.O.C. with chef Suzanne Goin. “Whenever a new restaurant opens, we feel it. Then there is a shakeout, and business bounces back.”
To battle the slowdown, Ludovic Lefebvre is overhauling Bastide’s menu. His wacky creations are being sidelined, served only to gastronomic adventurers who reserve the chef’s dining room. For everyone else, it’s much more classic French cooking, albeit with Lefebvre’s bold flavors. At Norman’s on Sunset Boulevard, they hope filling the air with the succulent smells of an outdoor pig roast on Friday nights will bring in the business.
More dramatic than usual
IT almost seems as though there’s a law of limited capacity at work in L.A.: Whenever a clutch of new restaurants opens, as many existing ones will eventually close. Two years ago there was a flurry of excitement, with Bastide, Angelini Osteria, A.O.C., Alex, Jar, Paladar, EM Bistro, Sona, Table 8, Grace, Opaline, Citrine, Dolce and Cinch opening.
But this year, the inevitable closings seem more dramatic than usual. In part that’s because while most autumns bring a bevy of new restaurants, this season has been flat for significant openings: Wilshire opened in Santa Monica, and that’s about it. (The end of the summer brought Sterling Steakhouse in Hollywood, Mastro’s Ocean Club in Newport Coast and Restaurant 162' at the Ritz-Carlton Laguna Niguel. The highly anticipated new joint venture from Mario Batali and Nancy Silverton has been delayed until winter; Wolfgang Puck’s steakhouse at the Regent Beverly Wilshire has been delayed until March.)
At L.A.'s most popular restaurants, such as Lucques and Campanile, business is brisk, thanks to the reduced competition. Patina Group, including the collection of Pinot restaurants led by the flagship Patina in Disney Hall, just had its best month since 9/11, says Joachim Splichal. (The laggard, Pinot Hollywood, has been closed for a top-to-bottom remodel.)
“L.A. is a very tough restaurant town,” says Splichal. “You need regulars who come once a month. We’ve never had the conventions that drive the restaurant business in San Francisco, New York and Chicago.”
It’s tough but potentially rewarding, says Robert Sutcliffe, the lawyer who has handled the private financing for Splichal’s restaurants as well as many others. There have never been so many investors lined up to back new restaurants, he says. Sutcliffe claims to have deals in place to finance 11 new restaurants, several of which are million-dollar projects.
Sutcliffe’s latest deal, the financing for Providence, the new seafood restaurant from chef Michael Cimarusti in the old Patina space on Melrose, came together in a five-week flash, he says. “I had to send $300,000 back to investors. We only needed $1.4 million, and investors oversubscribed.”
Providence’s general manager Donato Poto says the closings are a “dark cloud” hanging over the city. “In general, there are worries,” he says. “Probably the economy isn’t as good as people think.”
Ticking through the list of restaurants that have closed, Poto says, is a reminder of how unforgiving L.A. can be. “People go after the new thing. If you don’t give them the right reason to come back the third and fourth time, they don’t.”
That was certainly the story at Citrine on Melrose, a tony dining room tucked next to decorator showrooms and antique stores. “The last six months were pretty rough,” says owner Dean Mavrikis. “We were losing traction in a very soft market. There is a lack of loyalty in Los Angeles.”
In Mavrikis’ mind, the food was improving under chef Kevin Meehan, but customers were spending less and less each visit. Recently, only Friday and Saturday were busy nights. “No restaurant can survive on that,” he says. After his brother Peter died unexpectedly in September, he closed the restaurant; he plans to sell it to former Disney executive and Hollywood macher Michael Ovitz.
The deal hasn’t closed. But if it does, Ovitz says he envisions a Japanese restaurant starring Hiro Fujita, the chef at Ovitz’s successful West L.A. sushi bar, Hamasaku. “I want to do something on that side of town,” he says. “This chef is gifted enough that I’m willing to back him in a restaurant.”
Falling profits, rising traffic
BEFORE there was sushi, Hollywood celebrities favored French food. And in the late 1980s and early ‘90s, the limos were winding their way up Beverly Glen in Bel-Air to Four Oaks. Suddenly, last month, the secluded restaurant closed. “I was after the owners [L.A. attorneys Larry Brown and Joe Coyne] to refurbish the restaurant,” says former executive chef and general manager Peter Roelant. He quit last April when it was clear that the owners were not going to invest in the place.
According to Roelant, L.A. has changed as a restaurant town. “In the 1980s it was an exciting scene,” he says. Now there are many more restaurants competing for customers, while the prices of food, insurance and rent have “gone crazy.” Profit margins that used to be a reliable 10% have fallen to 3%.
And then there’s the traffic. It can easily take an hour to get across town, and this affects everyone, says Providence’s Poto. “You can have fantastic food and great service, but people think twice before driving anywhere.”
For his next venture, Roelant is focusing on places near his San Fernando Valley home because “I prefer to not have the stress of being in traffic.”
It’s only been two years since Le Dome unveiled its Dodd Mitchell Design face-lift. The radical surgery failed, however, to make the aging Hollywood hangout cool again. “Business is terrible,” says Tutor. The Los Angeles builder bought the restaurant 2 1/2 years ago with the idea of reclaiming its past glory. “The restaurant business is struggling mightily all across Los Angeles,” he says. “Le Dome is one of my smaller holdings. I’ve been disappointed that it hasn’t been successful, but I don’t get involved enough to know why.”
In Los Angeles’ superheated real estate market, if a restaurant like Le Dome is struggling, it’s best to shut it down quickly, says Steve Wolff, a lawyer who represents several local chefs, including Wolfgang Puck. A favorable long-term lease is a diminishing asset. “You can sell the lease, which likely is more valuable than the ongoing restaurant,” says Wolff.
Someone is always eager to take the space. Right now Eric Greenspan, most recently executive chef at Meson G and formerly of Patina, is knocking on doors in the Hancock Park/mid-Wilshire area, scouting a location in which to open his new restaurant, says Wolff. The staggering rents in Malibu made it impossible to keep Granita open after its 15-year lease ran out, he says.
It was the concept that didn’t work at Umenohana. With huge dining areas seating more than 200 people, the tofu restaurant wasn’t open a full year before the chain’s Tokyo headquarters closed the Beverly Hills store.
Infighting killed others, such as Mix, a little place with big ambitions in West Hollywood. Within 18 months, the partners decided they couldn’t work together. After chef Scooter Kanfer left Naya in Pasadena, the restaurant struggled for some months, then closed before its first anniversary.
EM Bistro similarly hit the wall after chef Anne Conness left for Napa Valley Grill in Westwood. After a couple of difficult months, owner Charles Nuzzo fled to New Jersey, says co-owner Corky Hale, leaving her holding the lease. Recently, with new partner Paolo Giovani, the former chef/owner of Il Sole on Sunset Boulevard, Hale opened Solare in the same space.
With all these restaurants, industry insiders say, there is really only one reason for failure: lack of interest. And that’s a problem that’s impossible to fix.
Times correspondent Leslee Komaiko contributed to this report.