Dinah's Poolside Grill may change hands | August 31, 2012 | Palo Alto Weekly | Palo Alto Online |

Palo Alto Weekly

News - August 31, 2012

Dinah's Poolside Grill may change hands

Following legal battle, 40-year-old Palo Alto icon could lose longtime management

by Eric Van Susteren

For 10 years, Walt Hays and his group of friends have been coming to Dinah's Poolside Grill in south Palo Alto early in the morning each week. Most of them order bacon and eggs, and all of them suffer the playful pranks of their longtime server, Carlos Ochoa.

"It's very convenient and pleasant, and we like the atmosphere," he said of the restaurant. "Carlos jokes around with us in Spanish ... or if one us comes in late, he'll refer to him as Mr. Late or something like that."

But this ritual may soon change for the group. The restaurant's future is uncertain, as longtime restaurant operator Sharon Magnuson's tenure appears to be coming to an end.

A legal battle between Magnuson and the restaurant's property owner, Dinah's Garden Hotel, could result in the restaurant changing hands within a month, she told the Weekly.

Eric Magnuson, the corporate officer for Dinah's Poolside Grill, said the hotel's owner, Julie Handley, unexpectedly sent the restaurant a 30-day notice at the end of June to vacate the El Camino Real property.

But Handley told the Weekly that the restaurant would not be closed for good.

"We don't have an exact date yet, but Dinah's Poolside Grill will be closing for a short time and then reopening," she said. "It will have a similar menu and the same comfortable, homey atmosphere we've had for years."

Magnuson, Sharon's son, said they are attempting to prevent the closure with a lawsuit against the hotel and Handley, the restaurant's landlord.

He said the restaurant's lawsuit is based on an agreement made between his father, Bruce Magnuson, the former owner of the restaurant who died in 2006, and Raymond Handley, the previous owner of the hotel who died in 2009. Raymond Handley was Julie Handley's father.

Magnuson said Raymond Handley had told Bruce Magnuson that the restaurant would have a "lifelong lease" at Dinah's Garden Hotel.

"We did a huge favor for original owner of hotel by serving dinner at major loss for 15 years, and because we made such a huge sacrifice he thanked us by saying, 'You'll always have a place here,'" Magnuson said.

But Dinah's Hotel proceeded to file an unlawful detainer action, a special court proceeding to legally evict a person or business, on July 24 against Sharon Magnuson and her company, Create Your Own Omelette Inc.

Julie Handley would not comment on this agreement, on any details of the lawsuits or on whether there are plans to change the restaurant's ownership.

Both cases are still listed as open, according to the Santa Clara County Superior Court.

Bruce Magnuson started Dinah's Poolside Grill in 1972, behind Dinah's Garden Hotel, and continued to operate until he became ill in 2002, at which point his wife took over, she said.

Raymond Handley built what was then Dinah's Motor Inn in 1957 directly behind Dinah's Shack, a restaurant founded in 1929 by Charles McMonagle and his wife, Hazel. Dinah's Shack, which closed in 1989, was a favorite hangout for many Palo Altans and Stanford students, including President John F. Kennedy when he was at Stanford Business School in 1940, according to the book "Palo Alto Remembered," a history of the city written by Matt Bowling.

Handley replaced Dinah's Shack with Polynesian-themed Trader Vic's in 2001. Trader Vic's closed in the beginning of August and will be replaced by upscale seafood restaurant The Sea.

Julie Handley did not comment on whether there was a connection between the recent changes in the two restaurant locations.

Sharon Magnuson said she didn't know what the fate of the restaurant staff, some of whom have worked there for years, would be.

But for her, she said, "This is my livelihood; this is how I make my house payments and live. I'm not real hirable at 70. I don't know what I'm going to do."

Editorial Assistant Eric Van Susteren can be emailed at ericvansusteren@paweekly.com.


Like this comment
Posted by If-A-Verbal-Agreement-Is-Made-In-A-Forest-Can-Anyone-Hear-It?
a resident of Another Palo Alto neighborhood
on Aug 24, 2012 at 6:01 pm

Need it be said one more time? If it's important, get it in writing, and get a Notary's stamp on it too.

Like this comment
Posted by CR
a resident of Palo Alto Hills
on Aug 24, 2012 at 11:33 pm

This story is very sad. This is (was) a great place to have Sunday brunch.

But I'd like to mention an unfortunate local journalism trend. I saw this story originally in the Daily Post this morning. Several hours later, Palo Alto Online (the a.k.a. of the Palo Alto Weekly) has re-posted the story without giving credit to the Post as the original source of this information.

Articles I see every morning in the Daily Post are re-posted later in the day by Palo Alto Online without any reference to the Post. I think the ethical thing to do is credit the Post when they have an important story like this one.

Like this comment
Posted by Kate
a resident of Duveneck/St. Francis
on Aug 25, 2012 at 3:08 am

To Julie Handley:

You're planning to reopen with the same 'homey atmosphere'? You have to have mouths to feed to make $$$, and loyal customers will stay away in droves. The word is getting around - fast. WHAT are you thinking????

Like this comment
Posted by Resident
a resident of Another Palo Alto neighborhood
on Aug 25, 2012 at 7:59 am

This is a great place for brunch or lunch and I have always enjoyed my food but the service varies.

I don't understand the internal politics as I am sure most customers are not really interested. It is a shame if the present management team changes, but if the restaurant continues to do business (I will miss it if stops), providing good food at a good price in this setting which makes me feel I am on vacation, then I and probably most frequent customers will continue.

Like this comment
Posted by Jocelyn Dong
editor of the Palo Alto Weekly
on Aug 25, 2012 at 9:46 am

Jocelyn Dong is a registered user.

Hi CR, I'd like to respond to your concern regarding this story, as you appear to be making an assumption that isn't, in fact, correct. Our reporter Eric Van Susteren learned about this news independently of any other newspaper and proceeded to interview all of the parties involved. It's truly a discredit to the honest work that he did for you to state, without any knowledge, that his information came from somewhere else.

To your broader point, there are four news organizations covering Palo Alto. Those who watch all four will see that we all "break" different stories. Just in the past week or so, Palo Alto Online was the first to report on the Baylands mosquito problem and follow-up aerial spraying, the real-estate investment fraud conviction, the new building proposed for 135 Hamilton downtown, the power outage in Midtown, the bomb threat in south Palo Alto, and more. Those stories later appeared in other news publications. So I respectfully disagree with your assessment of the "source" of Palo Alto Online's stories. Our source is good, old-fashioned reporting.

Like this comment
Posted by aware
a resident of College Terrace
on Aug 25, 2012 at 10:20 am

Thank you Jocelyn Dong for your Post. The Weekly consistently provides a valuable service to the community.

Like this comment
Posted by oh well
a resident of Old Palo Alto
on Aug 25, 2012 at 4:24 pm

Another Palo Alto icon joins the exodus.... Regarding post by CR (a.k.a. Dave Price) a media story is a media story. Who cares who prints information or misinformation first.

Like this comment
Posted by Elaine
a resident of Fairmeadow
on Aug 28, 2012 at 2:31 pm

A 30 day notice after 40 years of business is very heartless, but it is probably all about profit. Hopefully the regulars and the locals will voice their anger enough to change the outcome.

Like this comment
Posted by Jim
a resident of Crescent Park
on Aug 28, 2012 at 2:45 pm

Wow....I'm so sorry to hear this news. Regardless of the source, I do appreciate the coverage.

Again, a great piece of Palo Alto's intimate history seems headed for oblivion. Handley may be justified legally, but this just seems to be an example of another owner-developer's greedy ego coupled with a complete lack of respect for the heart and soul of a very special place created by a very special woman.

Best of luck to you Ms. Magnuson, you deserve better for your lasting loyalty to Poolside founder, Ray Handely. We can all safely bet that he's rolling over in his grave.

Ms. Handley, why do you shame your father's poor unwilling name? Do yourself and everyone else a favor and respect his legacy.

Like this comment
Posted by sad
a resident of Barron Park
on Aug 28, 2012 at 2:54 pm

This restaurant is an icon, and it's sad to see this happening. The food is excellent and a great value for the money. I've noticed that
the prices were always reasonable and stayed steady when other restaurants were raising prices.

I doubt that Ms. Handley can replicate what took 40 years to build.

Like this comment
Posted by Disturbed
a resident of College Terrace
on Aug 30, 2012 at 9:29 am

I suppose business is business, but I'm sorry to see the Poolside Restaurant change hands after 40 years of dedicated service. It's especially disturbing since the restaurant has such great food, great staff, and fair prices. When I wanted to give myself a treat, I would go to this restaurant. Just by virtue of how this has gone down, and how unfairly Mrs. Magnuson and her staff are being treated, I will not, nor will my lunch buddies, frequent the new place as we have discussed.
30 days notice after 40 years of hard work building this business? Business is business, but that's just fundamentally wrong.

Handley, shame on you!

Like this comment
Posted by Matthew
a resident of Mountain View
on Aug 30, 2012 at 12:33 pm

It will be a sad day when the Poolside Grill closes.
As another person previously stated, it will be hard to replicate the homey, retro and friendly atmosphere of this restaurant.
Yes, the location by the pool with the beautiful landscaping will still be there, but there will be "something" missing. I doubt if Ms. Handley will be able to capture that "something" in her new restaurant.

Like this comment
Posted by Jonathan
a resident of St. Claire Gardens
on Aug 30, 2012 at 2:40 pm

[Post removed by Palo Alto Online staff.]

Like this comment
Posted by Paul J. Stiles
a resident of Mountain View
on Sep 3, 2012 at 11:49 am

I, and many friends, like going to Dinah's Poolside Grill. I have been going there since the 1980s and others I know have been going there much longer. I have recommended the Dinah's Poolside and the hotel to people at work when making plans for visitors and conferences.

Yes, I like Dinah's Poolside and it is a shame and a loss for the area that the hotel owner is kicking Sharon out: kicking here to the curb, so to speak. I guess that the hotel owner wants all the profits. I hope they don't get them!!! Things change (sometimes for the better, sometimes not) and my friends and I will find a new place, just not at poolside anymore.

Ms. Handley may be able to keep the same decor, menu, and other aspects of the present poolside restaurant, but with Sharon gone, something truly important and unique to Dinah's Poolside will be missing ... the soul of the place. What Ms. Handley is doing is just business ... mean and wrong!

Goodbye Sharon and Dinah's! It's has been a great 40+ years. You will be missed.


Like this comment
Posted by Elvira Mariscal
a resident of another community
on Sep 4, 2012 at 6:58 pm

To Julie Handley;
SHAME on YOU!!!! Your father must be turning in his grave! I had the honor to meet your father. He was a wonderful man and he loved Sharon and Bruce Magnuson very much! Your father and Bruce were men of their word. They did not need to sign a paper! A handshake meant more to them than a piece of paper! They were true and wonderful men! How could you do this to Sharon, who has given 40 years of her life to Dinahs. She has made this place a legend along with the late Bruce Magnuson and her family. I worked at Dinahs 40 years ago and I will never step foot there again if Sharon Magnuson is not there! I also heard that you offered her the position of Hostess Manager, what a slap in the face! Obviously you have no heart or brains! If your father were alive he would probably kick your ass to the curb! He was a good, honest and respectable man!

Like this comment
Posted by Palo Alto Resident
a resident of JLS Middle School
on Sep 6, 2012 at 3:39 pm

Doesn't California Law prohibit a 30-day notice to a resident of such a lengthy term? I think so...no?

Sorry, but further commenting on this topic has been closed.