San francisco restaurants

More and more restaurants in San Francisco are considering a drastic step this winter: closing for “hibernation”

It could soon be hibernation season for restaurants in San Francisco.

With indoor dining once again banned and wintry weather reducing income from outdoor dining, a growing number of restaurants in the city are considering, for the first time, the more drastic step of possible closure for the coming months. Others are considering closing for the second time since the start of the pandemic due to lack of activity.

This is a last-ditch effort known as “hibernation” in the industry, and it allows business owners to reduce food, supply and staffing costs for an extended period of time, in the hope of reopening.

Already, a number of the city’s historic restaurants have made the leap. The 171-year-old financial district establishment Tadich Grill decided not to reopen in November after San Francisco did not allow 50% capacity for indoor dining. And that same situation is why Boulevard in San Francisco, chef Nancy Oakes’ Northern California mainstay that opened more than 20 years ago, went into hibernation on Nov. 22.

Then there are a host of other chefs and restaurateurs who are strongly considering taking the plunge despite complications such as reaching agreements with landlords, paying employees and uncertainty about their ability to reopen.

The Mission District’s Guamanian restaurant, Prubechu, considered hibernation after an indoor dining ban was announced. In a single day, co-owners Shawn Camacho and Shawn Naputi noticed that 30 outdoor dining reservations had been cancelled.

“Every time we start to build momentum, it’s like something else comes up and stops it,” Camacho said. “We haven’t made the decision to close for a while, but we’ve never been closer to making that decision than we are right now.”

Brandon Jew, owner of the famous restaurant Mister Jiu’s in Chinatown, has yet to decide whether or not he will hibernate, but as a survival strategy, it was on his mind.

Nick Otto / Special for The Chronicle

E&O Kitchen and Bar in San Francisco, a pioneer of the city’s Asian fusion scene that opened its doors 20 years ago, briefly went into hibernation in March to save money. While Sharon Nahm, the restaurant’s executive chef, said there were no immediate plans to return to hibernation, “that decision could change next week or the week after.”

“It’s realistic to say that any restaurant right now needs to keep the conversation going about this,” Nahm said.

What has given the idea new energy recently is the spike in COVID-19 cases across the state and the way authorities have rushed to implement restrictions. Governor Gavin Newsom forced most California counties into the most restrictive purple tier of his reopening plan, prompting every county in the Bay Area to ban indoor dining. Newsom also implemented a curfew for counties struggling to control the spread of the virus.

Local restaurateurs are also worried about a potential outdoor dining ban, similar to what Los Angeles County is experiencing, which could further limit the industry’s revenue streams. It’s all part of an increasingly bleak picture for the restaurant scene in San Francisco, said Laurie Thomas, owner of Rose’s Café and Terzo. She saw how the restrictions were hurting her business on a recent Tuesday, when her Mediterranean-inspired restaurant in San Francisco, Terzo, was serving about 14 customers, a number she says is “hard to survive.”

“What people are trying to figure out right now is, are we hibernating to save money? That’s a real choice to make at this point,” said Thomas, who is also executive director of the Golden Gate Restaurant Association.

There are benefits to wrap up: Money can obviously be saved on payroll, utilities and food ingredients. At Beit Rima, San Francisco’s hip Arabic comfort restaurant, chef and owner Samir Mogannam said he’s considering a period of hibernation because he could save tens of thousands of dollars. Earlier in the pandemic, he cut a check for $36,000 in health care costs for staff members — a sum that was not offset by sales.

“My staff are young and healthy, and paying this stuff when we’re not making money is hard to deal with,” he said. “It’s just something else that makes me think about shutting down for a while. It would be a big deal to be able to save a few thousand dollars when you really need it.

When E&O temporarily closed earlier this year, Nahm was able to save $10,000 to $20,000 in payroll. Add in utility and food costs, the overall total was closer to $20,000 to $25,000 in savings. Umberto Gibin, the owner of upscale Financial District spot Perbacco, said that by furloughing his employees alone, he saved between $10,000 and $20,000 a month when he closed his Italian restaurant in July and August. For rent, he worked with his landlord to delay payments during the brief hibernation, though he declined to go into specifics.

“The conversation was very clear — we were temporarily closing to save money — and that’s what we told our landlord. There was nothing else to do and he agreed,” Gibin said. “Saving that money is what has helped us so far.”

David Hanna, General Manager of Tadich Grill, takes an order over the phone while working at Tadich Grill in July.  The restaurant is closed for the foreseeable future.

David Hanna, General Manager of Tadich Grill, takes an order over the phone while working at Tadich Grill in July. The restaurant is closed for the foreseeable future.

Léa Suzuki / The Chronicle 2020

Hibernation is not easy, however. Gibin does not plan to close again as he fears losing regulars. Before Perbacco closed this summer, regular customers placed bulk orders. When it reopened in September, those diners did not return in force, he said.

“It’s a logical result,” he said. “When you get out of the market, people will go somewhere else and do something different.”

Nahm has been able to negotiate deals with her landlord and other businesses, but as the pandemic continues, that becomes more difficult, she said. “If there was no requirement from the city for the debt collectors to be more lenient, then they will come and collect the money,” she said.

In addition, the reopening process is complicated. Restaurants must find and rehire staff, while being nimble enough to adapt to fluctuations in security restrictions. Nahm described reopening a restaurant after being closed for several months as taking “twice as much work” as opening the business originally. She cited reasons such as the need to quickly restore payments with suppliers, the hiring of new employees if those laid off have already found other work and the need to set up operations for food services. take-out and delivery.

“It’s a tough position to be in once you’re trying to come out of hibernation,” she said.

Yet some restaurateurs are beginning to think they may have no choice but to do so. As some businesses consider temporary shutdowns, the Bay Area food scene has been rocked by permanent shutdowns since the pandemic began, with some industry experts expecting the local industry to lose. at least half of its restaurants before the pandemic ends.

Brandon Jew, the owner of the Michelin-starred Mister Jiu’s in San Francisco, said while he hasn’t decided to put his Chinatown restaurant into hibernation yet, the idea of ​​doing so is never far away. of his mind.

“There’s so much going on right now that you really have to consider all of your options all the time,” he said. “It’s just about making the best decision for your employees and your business, because you want there to still be a place for them after this is all over.”

But a number of San Francisco chiefs remain optimistic about the industry’s future, including Jew, even with talk of hibernation increasing. Jew said he hopes the Restaurant Act, which is a $120 billion fund that would provide grants to small restaurants to pay for things like payroll, benefits, rent and equipment protection for workers, will soon be adopted and will serve as a lifeline for places like his. . In the meantime, he thinks San Francisco’s food scene has a chance to get more intriguing.

He pointed to the proliferation of pop-ups in the Bay Area, businesses that don’t have to worry about high overhead, labor costs or rent, like brick-and-mortar spots. He said these chefs have the opportunity to play a bigger role in shaping the city’s restaurants during the pandemic.

“Honestly, I’m kind of excited to see these pop-ups grow and grow their audience,” he said. “What you might get after a while is a food scene that’s a little grittier and capable of taking more risks. It’s one of the few things we can be happy about. »

Justin Phillips is a writer for the San Francisco Chronicle. Email: jphillips@sfchronicle.comTwitter: @JustMrPhillips