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What will it take for local restaurants to recover? Famed Peninsula brewer Dan Gordon sounds the alarm after closing in Palo Alto

Original post made on Apr 15, 2020

In an interview, Palo Alto restaurateur Dan Gordon spoke bluntly about the ripple effects the coronavirus will have on local restaurants and what it will take to help them survive.

Read the full story here Web Link posted Wednesday, April 15, 2020, 9:28 AM

Comments (17)

Posted by dontliveinCA
a resident of another community
on Apr 15, 2020 at 11:19 am

This comment seems a little harsh...."I don't think anybody in Palo Alto city government cares, honestly." I doubt he is the only person who cares.

Posted by Green Gables
a resident of Duveneck/St. Francis
on Apr 15, 2020 at 12:26 pm

I think Dan Gordon is correct. Why would the City of Palo Alto care? No skin off their nose.

Posted by Independent
a resident of Esther Clark Park
on Apr 15, 2020 at 12:53 pm

Wake up City of Palo Alto Council members, which just chose to give away local taxpayers' money rather than furlough workers and share in the enhanced federal unemployment insurance benefits initiative. Wake up. It is time to be fiscally prudent. It is time to serve your residents, not just your unionized employees. It is time to cut back. It is time to support your local businesses, rather than your unionized public employees.

Posted by Resident
a resident of Another Palo Alto neighborhood
on Apr 15, 2020 at 1:14 pm

One idea I have seen is for restaurants to produce meal kits of their popular dishes, all the necessary ingredients and a recipe/instructions so that people can make them at home. People could buy them during the day while out on a necessities run and then make them at home when they are ready to eat. This will reduce the number of outings and enable the food to be eaten when they are ready to eat and the food is hot.

Many places are out of ingredients such as flour, rice, etc. but the food chain for restaurant supply and commercial kitchens is better than grocery distribution at times so for restaurants to be able to sell raw food with instruction as a means for tapping into the commercial food chain.

Posted by Anon
a resident of Another Palo Alto neighborhood
on Apr 15, 2020 at 1:28 pm

Honestly, unless there is some way to artificially lower the effective rent for small businesses in downtown Palo Alto, they are just going to get priced out. It has turned into an office park. I don't like it, and, I don't think Dan Gordon is correct that "no one" cares, but, clearly PACC majority doesn't care. For some reason, they just can't seem to get over their love affair with office space.

Posted by JimH
a resident of Community Center
on Apr 15, 2020 at 2:09 pm

Resident: Take out food kits is a small business and couldn't possibly support local restaurants paying high leases. In any event I want to eat at local restaurants. Not take home a kit and cook and eat it in my house.

Posted by Anonymous
a resident of Another Palo Alto neighborhood
on Apr 15, 2020 at 7:09 pm

As a *former* member of the staff of DG, I think it’s relevant to ask- Why is Dan Gordon giving interviews and speaking at town meetings about the fate of his restaurant and lack of caring when the staff were never informed that the restaurant is closed permanently? The first we all heard of it was through Dan Gordon’s speech two days ago. No messages from management, no personal speech for us from the head guys. If you want compassion for the business owners’, start by being respectful to the people who worked hard for you and now have no income.

Posted by rent
a resident of Downtown North
on Apr 16, 2020 at 12:27 am

Maybe there needs to be a rent holiday for small businesses in downtown Palo Alto too.

Posted by R. E. Marks
a resident of Another Palo Alto neighborhood
on Apr 16, 2020 at 1:41 am

Maybe Palo Alto should never have let its retail space become dominated by a fragile restaurant mono-culture?

Restaurants are discretionary spending and always the first to go in any downturn.

Posted by cheese guy
a resident of Palo Verde
on Apr 16, 2020 at 7:21 am

So, this follow-up interview certainly seems like an attempt by the Weekly to patch up Mr. Gordon's reputation after the pretty damning article (see link above) yesterday in which the blame for closing was leveled on the fact that Palo Alto required employees be paid a living wage (if one considers under $20 an hour a living wage in PA, which it isn't). Sorry to see any business closed, but this seemingly needless "interview" sure has the feel of a bit of a patch up after the prior article. A the best to "Anonymous" above, sorry to hear about how this all came down.

Posted by Larry Chau
a resident of another community
on Apr 16, 2020 at 8:49 am

Mr. Gordon raised some very valid & pertinent facts. Fiscal recovery in the restaurant & hospitality sectors will be very slow as well as subject to new serving & seating guidelines due to the repercussions of COVID-19.

I currently own two Hunan-style restaurants in the SF bay area but fortunately my family owns the property where they are situated. Nevertheless, I am planning to close both dining establishments & eventually lease the buildings to renters of 'essential businesses' in the near future. BTW, medical marijuana outlets are considered 'essential' providing one has an Rx (and those are easy for recreational users to procure...just claim you get an occasional upset stomach or have menstrual cramps).

Why bother serving high-quality Chinese food when there are so many other good Chinese restaurants on the peninsula? While Chinese take-out is an American dining tradition of its own, delivery is a hassle nowadays & business is down due to certain xenophobic mentalities & resentments.

I foresee a closure of many smaller restaurants & a proliferation of chain-corporate types that can survive this current economic ordeal...think Chili's, Chevy's, Red Lobster, Papa John's, McDonald's etc.

Expect further mediocrity of the dining experience in the future. There will be fewer 'starred' restaurants (i.e. Greystone, French Laundry et al) and in some ways this is good because they cater to privileged, oftentimes namedropping pseudo gastronomists (aka phonies) and corporate spenders with business entertainment accounts.

Local restaurant prices (based on snob appeal) are too high as well. Only an idiot spends $18.00 for a spinach salad or $15.00 for a piece of carrot cake.

Time to get real. Let's eventually turn downtown Palo Alto & Mountain View back into traditional shopping environments with fewer fly-by-night dining establishments.
The Facebook, Google, Apple employees can learn to cook on their own.

Add some more bars as well (and drop the prices of drinks as there is a high mark-up on booze). Some Amsterdam-style marijuana coffee-houses would also be a nice downtown addition as well.

The coronavirus scenario will turn water into wine for some savvy investors & speculators. Rather than being a victim, become the next big wheel!

Posted by Maven
a resident of Another Palo Alto neighborhood
on Apr 16, 2020 at 9:03 am

Another problem here is that downtown customers come from a pool of workers who don’t live here. That was always a problem with many downsides. For example in an earthquake or other major disaster, there was never any attention paid to what Palo Alto would do to protect the population with so many more people here during the day. Our emergency manager is quoted as saying the density would result in loss of life already.

For restaurants, this means that their regular clientele are sheltering in place somewhere else. When we got takeout at Veggie Grill, it was pretty busy. But, we are familiar with veggie grill, and thought of them when it came time to get takeout. To be honest, if there were some kind of central place to look at an updated take out landscaping locally and that includes across city lines, could order, and it was a little more clear what was available, under what conditions we could get takeout, etc., then we would probably have gotten more takeout. Although, our families contribution wouldn’t be that much, since we can’t afford to go out very much anymore.

This is part of the wages of allowing downtown to become an office park. The connection to Palo Alto residents who would be there when The Goodweather companies moved on (as they can more easily) is never developed.

The very best businesses for locals in Palo Alto, that survived other economic upturns and downturns, they’ve gotten pushed out by the very same forces that have made downtown so unfriendly for local residents.

I have said this all along, and I still think it’s the best thing for Palo Alto and Silicon Valley in the long term. The states should help cities to buy up the downtown areas in very expensive places. By help, I don’t mean it has to be free, I just mean long-term debt, etc. The city could be a landlord for a while, but really they just need to own the land underneath the buildings. They could do long-term leases the way Stanford does to keep its properties below market rate. And they could reduce the rent to businesses in exchange for the businesses paying their workers better wages. As time passes, this ability will become more and more valuable to the city, without costing the city anything, so businesses could pay workers a real living wage while still saving money and better weather economic downturns. The city could also leverage businesses that residents need, not just a monoculture to serve denizens of an densely packed office park that isn’t technically within code anyway.

The main advantage, of course, would be that the city could also ensure that the businesses serve residents, too, and not just companies that pack in their workers too closely, have corporate cafeterias instead of patronizing the local restaurants, even poach the workers so places like prolific oven have to close,and have no connection to the community in a crisis. Where are the tech wizards to instantly create tech solutions to make the farmers markets, Costco’s and restaurants easier to access so residents don’t have shortages and can reserve times to go in person? The utter absence of volunteer civic engagement by that sector right now, is really sad and disappointing.

As was always going to be the case, the residents were going to have to pick up the pieces. I want businesses to survive here, too, but not just to survive the pandemic but also to thrive afterwards. We have the wrong leadership at the helm locally for the time. The mayor and his allies are mostly concerned with hurting local residents to convert this place to an office park and dense dormitory for tech whales. This story should be a caveat to businesses who either didn’t care or didn’t see the downside to that.

Posted by Ross Mayfield
a resident of Community Center
on Apr 16, 2020 at 9:11 am

We have to come together as a community to help save our restaurants and their jobs. I’m a Palo Alto native and lead of Silicon Valley chapter. An all volunteer organization, 100% of donations go directly to restaurants that provide meals to frontline health care workers.

We are working with restaurants here like Bevri, Pizzeria Delfina, Tamarine, Tootsie’s, Zareen’s. Providing meals to Stanford and 7 other hospitals.

I wish we had gotten to help Dan. The program is just now scaling up. We’ve had a direct impact on operations and hiring back, when many had to let go of 90% of their staff.

Posted by Mike
a resident of University South
on Apr 16, 2020 at 11:37 am

I've been told repeatedly by Suze, Dave, and Paula to have an emergency fund in case there is an emergency. They recommend 3 months to 12 months expenses. So Dan, why are you blaming others with your hand out?

Posted by Diner
a resident of another community
on Apr 16, 2020 at 11:38 am

As stated in the article "after the coronavirus shutdown "accelerated" economic pressures already impacting the restaurant." I can only assume that those other pressures were lack of business. I frequented Gordon Biersch when it was open and I tried Dan Gordon's a couple times and was dissapointed in the food, it did not live up to expectations, so I stopped going. I know others who felt the same way. So you can blame it on COVID-19 but if you are not making customers want to return you are not going to last very long.

As for alternate ideas like preparing meal kits, it is not meant as a long term solutions. Between take out, delivery, meal kits and possibly selling items like high quality produce and meats that they get from their suppliers they can hang on until the situation gets better. I would also think that many restuarants are in a good place to negotiate short term breaks on rent with the landlords since the option for the landlord is get some rent or have the resturant go out of business and get zero rent (no one will be lining up to open a new resturant for the foreseeable future).

Posted by Anon
a resident of Another Palo Alto neighborhood
on Apr 16, 2020 at 1:03 pm

Posted by Diner, a resident of another community

>> "accelerated" economic pressures [...] I can only assume that those other pressures were lack of business. I frequented Gordon Biersch when it was open and I tried Dan Gordon's a couple times and was dissapointed in the food, it did not live up to expectations, so I stopped going.

I only went to GB once back in the day, and, it was way too noisy for me. But, apparently a huge number of people did not agree with me. "Gordon Biersch? Nobody goes there anymore, it's too crowded." But, the larger question is whether there is anything that can or should be done to maintain and encourage small, independently-operated businesses in Palo Alto, and, reduce the number of commuting-dependent office jobs?

Posted by Dick D.
a resident of Crescent Park
on Apr 16, 2020 at 9:03 pm

I agree with a number of comments about rent being a killer all by itself plus the notion of the city getting into the real estate business until or unless landlords can get real. The few that survive now are the rare birds who own their place.

The cost of labor is a sore point if one accepts that those workers have to feed their kids and hardly scape by as it is with the local minimum wage. What ever body seems to ignore is that "elsewhere" labor costs aren't going to be much different since the state and most places aren't a lot different. To add to those other places the prices are going to lower too. Who in Grass Valley is going to pay for what here is a piece of carrot cake for $15? Or $250 for a tasting menu, sans wine?

I continue to think the best thing we can do is get some business acumen into the act and have the ambitious great cooks see what the thier restaurant plans financials are before jumping in. These days, not right right now but over a longer period, one out of ten restaurants don't make it past their first year - they never looked at what income & expenses were likely to be before things come crashing down. Right now those terrible crashes ae going sadly happen to many.

The city can help as a landlord AND with help in far better, more reasonable planning.

Just sayin'

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