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Apr 1, 2007 10:10 AM

Bauers "restaurants fleeing SF" comment

In his Top 100, Bauer commented: "If rumors are correct, many restaurants that are fleeing San Francisco because of the higher minimum wage, the sick-leave mandate and upcoming mandatory health insurance may head south."

This issue has been getting some play lately. Curious to see if anyone is interesting in weighing on these potential effects of the mandates and if there are any specifics on what restaurants or restaurant groups, are talking about "fleeing".

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  1. There was recently this article in the SF Business Journal about restaurants leaving for Oakland:

    6 Replies
    1. re: JasmineG

      I notice neither of those places was actually leaving SF -- both were opening new branches in Oakland, not picking up stakes and moving existing ones.

      I'll believe it when I see it.

      1. re: Ruth Lafler

        One restaurant mentioned in the article was: the owners of Frascati sold it and opened Wood Tavern in Oakland.

        1. re: JasmineG

          Wood Tavern's one. Two others are Zax and Miss Millie's / Somerset.

          On the other hand, Yoshi's, Va de Vi, and Dudum Sports and Entertainment have all expanded from the East Bay to SF.

          San Francisco may be less business-friendly than some other places, but it's also a bigger, stronger restaurant market.

          1. re: Robert Lauriston

            Zax's move happened in 2002, almost five years ago, before the sick leave and higher minimum wage mandates. Poor business at the old SF location, and a pending rent increase at the end of the lease, prompted the move, according to the Chron.


            1. re: Robert Lauriston

              Actually, Va de Vi didn't move to SF, but the Presidio, which is federal land, so SF labor laws do not apply there.

              1. re: AB13

                Interesting. Va de Vi didn't move, the owners opened Pres a Vi.

      2. I don't know why anyone in their right mind would ever start any business in SF. When those existing leases run out I bet the exodus out of the city will be shocking.

        2 Replies
        1. re: chipman

          They'll stay in SF because that's where the business is. I was born and raised in Oakland, but a surprising number of San Franciscans have never set foot there. And Oakland doesn't have anywhere near the cachet of SF.

          If the owners of Frascati sold it, it's still a going concern, so no one has yet come up with a single example of a restaurant that closed in SF and moved to Oakland because of these new measures.

          1. re: Ruth Lafler

            I agree with Ruth; until I moved to Oakland, i rarely went to Oakland. but yet, living in Oakland, i visit SF daily, and not just for work reasons. Obviously for food too.

            If BART ever got it together and started some late night/ late weekend hours, people may find themselves heading to Oakland more often.

        2. There's going to be movement because of overhead costs but I seriously doubt there will ever be a monumental shift. Instead places will just raise their prices or someone else will step into the same "slot"..

          There's definately issues with running a business in SF but the benefits outweigh the negatives, stuff like density/foot traffic, the population eats our more, tourism/conventions and the magnet effect of SF. A well run restaurant with good food in SF will still do well...just not as well.

          1. Bauer's hypothesis is that perhaps the number of Top 100 restaurants on the Peninsula / South Bay growing from four last year (Amber India, Cetrella, Koi Palace, Manresa) to seven this year Junnoon, Kaygetsu, Mantra) indicates that restauranteurs are "fleeing" SF. But in fact the list includes three more SF restaurants than it did last year:

            San Francisco: 63, +3
            East Bay (including Contra Costa): 13, -4
            North Bay: 17, -3
            Peninsula: 7, +3

            4 Replies
            1. re: Robert Lauriston

              What I think is reflected by those new restaurant openings is that those areas were underserved to begin with. The population of San Francisco is fairly stable, while the population of the surrounding areas has been growing -- in particular, in the last 10-15 years there's been a huge influx of well-paid young professionals (a demographic that eats out a lot) in Silicon Valley, and the restaurant scene is just starting to catch up to that. Furthermore mid-range dining trends have changed, so that "nice" restaurants becoming more of an "everyday" thing, and people want to eat closer to home, and save fighting the traffic into the city for a special occasion.

              1. re: Ruth Lafler

                I don't believe the Silicon Valley restaurant market is any stronger than it was during the dot-com boom.

                I think the main reason the Peninsula / South Bay went from four restaurants to seven is that Bauer loves the upscale Indian trend (Junnoon & Mantra). The third addition is Kaygetsu, whose chef-owner has been a Palo Alto area favorite for 20 years. And Cetrella and Koi Palace are really different markets.

                1. re: Robert Lauriston

                  Robert, I wish you'd read what I write more carefully. I didn't say that the restaurant market was stronger than during the dot com boom, I said they are still in the process of "catching up" with the changes in the restaurant market over the last 15 years. The fact that there's a trend toward upscale Indian in that area is most assuredly a reflection of the huge influx of South Asian tech workers in that area (if not as customers, for raising the profile of South Asian cuisine and building a community that includes non-tech workers, including restaurateurs). However, I think there is another change in the demographic that affects restaurant trends: the aging (or really, maturing, since they're still not aged by any means) of tech workers. People who ten years ago thought nothing of driving up to the city after work and hitting the hot restaurants and nightspots are now older, maybe with children, and more likely to want a "nice" place closer to home.

                  But you're right about one thing: Bauer's prejudices towards certain styles of restaurant (most definitely upscale "ethnic" restaurants, preferrably with fancy cocktails) is the primary factor in all his choices.

                  1. re: Ruth Lafler

                    I don't think Bauer's choice to add Junnoon and Mantra has anything to do with trends in the area. I think he's just big on upscale Indian right now.