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Why is it becoming increasingly impossible to open a restaurant on the Peninsula?

Uploaded: Sep 17, 2019
In early August, Ben Bate got some bad news.

The City of Mountain View informed him — seven months after he took over 383 Castro St. to open Ludwig’s German Table — that the building's grease trap needed updating. Digging out the carport and sinking the 500-gallon grease trap will push the restaurant's opening back another three to four months.

The future home of Ludwig’s German Table in Mountain View (a building where Bierhaus used to operate out of) on Castro Street. Photo by Magali Gauthier.

The grease trap was simply the latest request from the city that has frustrated Bate and delayed the opening of the popular German restaurant and beer garden from San Jose. There was debate over the type of plants that would be outside the restaurant, the color of the tables, the style of the chair legs. More recently, the city asked Bate to remove the Corinthian detail at the top of 21 white columns that anchor an outdoor trellis.

The cost to do this? About $12,000.

When I spoke with Bate and co-owner Nicole Jacobi in February, they hoped to be open in May or June.

"We'll be lucky if we can open this year, to be really honest," he said more recently.

They get regular emails and questions from customers asking when Ludwig's will open in Mountain View. Bate said he wanted to share what the process has been like not to criticize the city, but to inform the public about what it takes to open a restaurant.

"There are things that are out of our control, unfortunately," he said. "We want it open as much as the people that are asking."

The City of Mountain View did not make any staff available for an interview, despite repeated requests.

Ludwig's is by no means the exception on the Peninsula, where restaurants are routinely delayed by complex city regulations and bureaucratic red tape. The cost of opening a restaurant — before the first customers are even served — has become prohibitively expensive, particularly for small, local businesses owners without the backing of deep-pocketed investors. (In San Francisco, a Board of Supervisors committee held a hearing on Monday to discuss what they could do to address this, including easing the permitting, planning and building processes for restaurant owners.)

Melody Hu, who is working to open a gluten-free bakery in downtown Los Altos, sent an email out to subscribers earlier this month explaining why it's not yet open.

"When I signed the lease for what used to be Mr. Cho's Mandarin Dim Sum, I knew that several things had to change to transform the store into a cute little bakery. But I underestimated the time it would take," she wrote.

Hu took over the 209 1st St. space in early 2019 and planned to open Sweet Diplomacy by this summer. Now she’s hoping for the end of this month but is hedging her bets for October.

"The city's Building Department and the county's Department of Environmental Health both want detailed plans on even minor changes in the store. For the plans, we had to find and create an 'A' team of architect, mechanical/plumbing/electrical engineers, and a good general contractor ... all that took awhile," she wrote. "The plan reviews and final inspections will also take awhile.

"I admire the public safety net that our government agencies have created, and although the process is lengthy to say the least, at the end I think it’s nice to live in a world where most public places are built to a high standard of safety."

In Palo Alto, another restaurant owner is frustrated with what he described as an opaque and drawn-out experience with the city’s planning department. Guillaume Bienaime wants to open a bar in the building next to his 5-year-old French restaurant, Zola, on Bryant Street. He secured through a lottery a full liquor license (Zola serves beer and wine only) and filed the necessary paperwork for a conditional use permit for the next-door space, which was last a hair salon.

The owner of downtown Palo Alto restaurant Zola wants to expand next door and open a bar. Photo by Michelle Le.

Bienaime said there’s been little communication with the independent contractor overseeing his request since then. The city has 30 days to determine whether a conditional use permit application is complete or not; a tentative decision is then mailed to property owners and occupants within 600 feet of the project and becomes final 14 days later unless someone requests a hearing.

City records show Bienaime's application was marked as incomplete in early August, then resubmitted and last “marked as TBD on TBD by TBD.”

"There's nobody who I can go talk to about a timeline," he said. "I'm just completely left in the dark."

Meanwhile, he's paying about $7,500 in rent every month for the empty space.

"If we continue to make it so difficult for local business owners to create businesses within the city or this area in general then we’re going to end up with chain restaurants and chain stores because they're the only ones who can afford to pay through this process," Bienaime said.

Bate and his three Ludwig's business partners, for their part, have been paying rent at the prominent corner space since January. He declined to say how much the monthly rent is. There's also the cost of the architect, engineers and other people who must be hired to comply with the city's requests. Every time the city files comments on Ludwig's plans, their architect must review them and respond.

In San Jose, the plans, permits, building and inspections for Ludwig's were finished in six months. Bate anticipates Mountain View will take at least a year. He's still waiting for building permits to start renovations. (Meanwhile, the building has been put on the market for sale, which the Ludwig's team didn’t know about until recently.)

The timing of the restaurant's opening also impacts the owners' bottom line. With the delays, it's likely Ludwig's, with its outdoor beer garden, will be opening in the dead of winter, its slow season.

Bate suggested that the city create separate planning processes for small and large businesses. It's hard for him to sustain a business through a protracted process, less so for a large tech company or restaurant chain.

"Everyone talks about trying to be pro-small business but it feels like we get treated the same as your Apples and your Googles and your Facebooks," he said. "There's one book for everyone. In this situation, it doesn’t make sense."

They knew they were taking a financial risk expanding to Mountain View but the potential payoff was too good to pass up, Bate said.

"Being on a street like Castro has the ability to pay off in the long run," he said. "We're only 3 years old. To have my brand on that street in a city like Mountain View is massive for me."

Both Bienaime and Bate said they're speaking out not to bash the cities they want to open in, but to hopefully find solutions.

"It's from a place of, we need help," Bienaime said. "It really eats me alive every day. They don't feel any of that. It feels very disconnected from what people are really feeling."

Local Journalism.
What is it worth to you?


Posted by Resident, a resident of Another Palo Alto neighborhood,
on Sep 17, 2019 at 6:49 pm

Get the local news stations on to it. They seem to be able to get action.

Posted by CrescentParkAnon., a resident of Crescent Park,
on Sep 17, 2019 at 9:37 pm

It's always common and simple to blame regulations/protections and government.
Until something like the Ghostfire thing happens. American doesn't have many of
those disasters because we have regulations so people cannot make bad decisions
based on saving a little money.

And is it really the one time costs ... or is it the unrelenting monthly slam for rents
and fearing of having to pay up or move out in the next lease negotiation?

Posted by charles reilly, a resident of another community,
on Sep 18, 2019 at 5:18 am

Here on the Peninsula, property values and working-class wages have indeed gone through the roof. Anyone who suggests those changes are driven by "greedy landlords" is just shooting from the hip.

Posted by Jeff says more parking, a resident of Duveneck/St. Francis,
on Sep 18, 2019 at 7:25 am

Look at the Michelin starred restaurant in Palo Alto, Protege. They almost threw in the towel. They jumped through all the hoops and then at the end a neighborhood activist (aka part of the PA “we will throw roadblocks in front of every development and business" crowd) claimed that the place was one spot underprepared and the building was a foot too higher something, the owners almost threw in the towel.
The council and their anti-everything sycophants pay lip service to “ we want local business. No chain stores", yet do their best to stymie any attempts to provide such establishments.

Posted by Ed, a resident of Barron Park,
on Sep 18, 2019 at 8:09 am

Well, unfortunately part of the problem ends up being that businesses don't want to pay their fair share of the taxes and so cities have trouble affording enough people to do the work. Proposition 13 is still gutting the revenue that local governments get. The easiest way to fix it would be to partially (or fully) repeal it.

Web Link

Posted by greedy landlords and public protection, a resident of Evergreen Park,
on Sep 18, 2019 at 8:11 am

> working-class wages have indeed gone through the roof.

In restaurants? hah.

Washers in the pit?
even Line Cooks, the heart of the kitchen?

Nah. None of them is near a living wage.

> regulations

We all want our families and neighbors protected. Some of us even want workers protected.

Also want sewage systems protected (the trap) so businesses don't socialize their losses by flushing bad **** into public infrastructure.

Posted by Bored M, a resident of Cuesta Park,
on Sep 18, 2019 at 9:18 am

I feel bad for some of these folks, but the article lost me at Ludwig's German Table. Come on now! You guys pushed out Bierhaus for a similar concept. Karma is real.

Posted by Let's talk solutions not problems, a resident of Waverly Park,
on Sep 18, 2019 at 10:09 am

There's a huge difference between "burdensome regulations" and "opaque and inefficient process." Many of the regulations may seem onerous, but protect the public's safety, health, and shared infrastructure.

On the one hand, it shouldn't take a year to navigate a bureaucratic labyrinth only to discover costly and time-consuming changes at the end of the process. On the other though, it's difficult to add necessary staff given appropriately tight local government budgets.

Why not create a self-funded "small business facilitator" position? Small businesses like family restaurants could pay (for example) $20,000 for 10 days of a dedicated government staffer's intensive expert review of the location, its plans, government processes, and regulations. Assuming full utilization, this would bring in about $500K in annual revenue (thus being budget-neutral to the government) while easily saving the owner the $20K in excess rent, fees, and lost revenue.

Fast-tracking small businesses maintains the small-town feel we want on the peninsula, maintains a dynamic economy, and gives local entrepreneurs an opportunity to live their dreams in their home town. Aren't these objectives worth solving for?

We need more compromise and creative problem solving to reclaim the "yes we can" spirit that seems to have been lost in favor of finger pointing, stalemates, and side-ism.

Posted by Polomom, a resident of Waverly Park,
on Sep 18, 2019 at 12:04 pm

Polomom is a registered user.

@Bored M, not sure where you got your information, Bierhaus closed because landlord and tenant were at odds. Having the building department take 7 months to tell Ludwig's a major remodel was necessary, only means our building dept is hopelessly understaffed. And since when do they criticize a building's facade? Somebody has an interest for this not to go through and the building to be sold by the Tan's for a new development. Likely offices. The future will tell....

Posted by Beer Garden Fan, a resident of Old Mountain View,
on Sep 18, 2019 at 2:25 pm

@Bored M: The landlord pushed out Bierhaus. The landlord had the option to renew the lease at a higher rate with Bierhaus but elected to not do that. I don't know the details behind what appeared to be a soured relationship between that landlord and that tenant but Ludwig's is not be blamed.

Posted by senor blogger, a resident of Palo Verde,
on Sep 18, 2019 at 3:32 pm

No wonder a hamburger costs $18.00

Posted by Brooke W, a resident of Menlo Park: Central Menlo Park,
on Sep 18, 2019 at 7:17 pm

@senor blogger - or $50 at Selby's

Posted by Stu Soffer, a resident of Menlo Park: Linfield Oaks,
on Sep 18, 2019 at 10:16 pm

Good article. Running a restaurant is near the bottom of endeavors I'd like.

It's tough.

But we do have some champs:

Bistro Vida
Orens Hummus

Bakery at a town and Vountry

Posted by Bill, a resident of Rex Manor,
on Sep 19, 2019 at 1:01 am

It is not just restaurants. Any small business is getting challenged with labor costs, regulations, insurance constantly rising, and do not get me started on how much my rent has gone up. Seniors on fixed incomes are shocked how much everything is costing now. It is nice that California city and state workers have great pensions with COLA when the rest of us do not. My retirement plans will force me to move from Mountain View in a few years after selling my business. I simply do not have enough money to live in Googleville after retirement.

Posted by Sneaky Pete, a resident of Old Mountain View,
on Sep 19, 2019 at 7:58 am

Sounds like the owners messed up and are now trying to put the blame everyone else.  

I work on Castro so I eat at the restaurants downtown regularly. A while back I saw that this place was under construction and got excited to try out a new spot but then suddenly the construction stopped. I heard they apparently got shut down by the city for not getting a permit... Now out of the sudden they are "delayed" another 3-4 months? Sounds like they got caught and now are upset they have to go through the process just like everyone else.

Even the article says "Both Bienaime and Bate said they're speaking out not to bash the cities they want to open in, but to hopefully find solutions."

Maybe the solution is to do things right and not be shady in the first place?

Posted by Polomom, a resident of Waverly Park,
on Sep 19, 2019 at 12:13 pm

Polomom is a registered user.

@sneaky Pete: since when are Corinthian details on an outdoor shade structure/pergola needing a permit to open a restaurant? It's not a structural requirement, but esthetic.
Seems unnecessary delay tactics. Looking at the monstrous building projects anywhere else in the City. Especially North Bayshore, which are moving along at incredible speed one has to question the priority of our MV building dept. .

Posted by Guillaume Bienaime , a resident of another community,
on Sep 19, 2019 at 12:26 pm

@sneakypete Please don't accuse people of doing « shady » things based on hearsay, without any actual knowledge of the situation. We've applied for and been approved for every permit asides form the planning. What we're asking for is a reasonable timeline and transparency in the process. You're snarky comments aren't helpful or necessary. No one is blaming anyone, we're just asking for help.

Posted by resident, a resident of Another Mountain View Neighborhood,
on Sep 19, 2019 at 4:06 pm

Very sad that the city won't give their side of the story. Are they reluctant because of privacy issues that the restaurant owner won't release them from?

Posted by Sneaky Pete 2.0, a resident of Old Mountain View,
on Sep 20, 2019 at 5:52 am

@Guillaume Bienaime

I apologize If my comments came out snarky but please correct me if I'm wrong, was there construction there? If you got approved then what's the delay? Just seems to be a lot more between the lines..

Posted by A Moral Compass, a resident of Leland Manor/Garland Drive,
on Sep 20, 2019 at 8:01 am

A Moral Compass is a registered user.

If one does not OWN the property/building, the business will ALWAYS be at the mercy of the landlord or property management company.

Doesn't matter how successful it is.

Posted by Mark Weiss, a resident of Downtown North,
on Sep 20, 2019 at 8:19 am

Mark Weiss is a registered user.

Related point: there are roughly five places in Palo Alto that I have produced concerts in that are no longer there -- running a music venue is not easy here either:
The Varsity
The Edge and The Illusion
Art 21 Gallery
et cetera


Posted by greedy landlords and public protection, a resident of Evergreen Park,
on Sep 20, 2019 at 9:38 am

> It is nice that California city and state workers have great pensions with COLA when the rest of us do not.

Too bad we all followed the republican blitz against unions over the last five decades. Strong unions would have kept the average working family protected. Now we pay the price because we laughed off unions.

Pay the piper - in this case just so the wealthy get wealthier. Don't you wish you had supported unions back in the day?

Posted by Huh?, a resident of Adobe-Meadow,
on Sep 20, 2019 at 10:02 am

That seems like a false narrative considering the history of your Blog and aaaaall the places you wrote about opening up over the past year.
The real question is, have we reached critical mass with the myriad of dining options in this area?

Posted by Resident, a resident of Another Palo Alto neighborhood,
on Sep 20, 2019 at 10:12 am

I think this is a topic worthy of discussion.

If we take for example Mikes in Midtown, this is not a new restaurant opening, but a major remodel and expansion. What should have been a fairly simple expansion turned out to be a very long battle with the City. Thankfully Mikes made it through and now it us up to us to support the restaurant to help it succeed. I appreciate having a decent restaurant in Midtown and I know others do. So the only way to keep places we appreciate is to use them rather than driving up and down the peninsula for similar type places.

Posted by Steve, a resident of Atherton: West of Alameda,
on Sep 20, 2019 at 12:51 pm

@sneakypete You call someone "shady" based on pure conjecture and then apologize if your comments "came out snarky"? What a joke of an apology. Based on a single observation, you then decide to engage in a bunch of conjecture of what might have happened -- which is perfectly within your rights, as misguided as your conjecture may be -- but then you go on to make a definitive conclusion that this must have been "shady". Your comments weren't "snarky", they were borderline slanderous. Apologize for that.

Posted by CrescentParkAnon., a resident of Crescent Park,
on Sep 20, 2019 at 2:47 pm

Le's talk solutions not problems said -
>> Why not create a self-funded "small business facilitator" position?

Exactly ... that is just what I was thinking. Have someone whose job it is to
keep things flowing and bottlenecks at a minimum - that is, to actually help
business people whose expertise might be running a restaurant and not
filling out paperwork.

We just blame regulations or blame government, never understanding that
accord to our American credo, capitalism, the market is supposed to solve
all these problems, but it doesn't. All the nonsense we hear is fake news
designed to keep a system in place that pays some people tons of money
for doing very little, and who want to do even less, with less taxes and less

A monitoring and feedback function in side all levels of government to help
with problems, to help publicize problems when things are not working and
who have the power to push things through or get resources or attention
to stalled processes ... and then do something about making it better for the
next applicant.

The bottom line - are things working or are they not?

Posted by CrescentParkAnon., a resident of Crescent Park,
on Sep 20, 2019 at 2:58 pm

Stu Soffer ....

Bistro Vida
Orens Hummus

Let's not forget Pastis, Gyros, Gyros, or Izzie's Bagels, or even Mountain Mikes, just some of the places for great food at reasonable prices.

Hobees actually needs to clean up its act. I used to love that place and eat there for dinner at least once a week. No more. I really miss the Town and Country location.

Posted by Pascal, a resident of Crescent Park,
on Sep 22, 2019 at 3:01 pm

Too many restaurants. All Palo Alto & Mountain View street customers think about is eating.

Too many overpriced & repetitive restaurants as well. Like how many Chinese or East Indian restaurants are actually necessary to meet the dining demands of the community? Same with sushi bars.

Gluttony & obsession with fancy dining is nothing to be proud of.

Good that some restaurants are going out of business. They were probably not that great to begin with.

Stick with the basics...like Sundance & The Fish Market. They will never go out of business because they are not a foo-foo dining establishment or one of those nouveau 'pay more, get less' type of diners.

You want to overpay for food that will be chewed/swallowed & then passed?
Then go drive up to French Laundry where appearances mean everything (including the diners).

Eating at Dutch Goose tonight. Good enough for me.

Posted by DC, a resident of Sylvan Park,
on Sep 22, 2019 at 10:05 pm

I want my Chinese restaurant...

Our progress has been delayed again. We are still waiting for a walk through with the city of Mountain View for the second construction phase to be approved. Hunan Home's Express has been closed for almost 4 months

Posted by Jess, a resident of Stanford,
on Sep 24, 2019 at 1:03 pm

Thank you for bringing attention to this issue!
For those questioning whether we need more restaurants or bars, shouldn't we give the proprietors a fair shot at proving whether they can survive the already-brutal Bay Area restaurant break-even rates rather than forcing them to start underwater and prepare for months of burning money?
I don't think these business owners are trying to shirk responsibility or cut critical safety corners, they are looking for transparency in the process (and sorry, but I don't even see how aesthetic details that are already in place, or design choices-the color of the tables? should be integral to the path forward, but maybe that's just me!)
We are heading toward a soul-less university ave where only chains can survive (or worse- a ghost town of vacant spaces).
Here's to hoping there is a new spot in downtown PA where one can get a decent cocktail sometime soon. We need it!

Posted by Steve Edelson, a resident of Old Palo Alto,
on Sep 24, 2019 at 5:24 pm

Elena: Can you put me in touch with Ben Bates of Ludvig's German Table? I have a solution to his grease trap problem that will save him months of delay and thousands of dollars. Instead of installing a big expensive underground grease trap/interceptor, he can install a small Goslyn automatic grease trap that fits on the floor right by his pot sink. And since the Goslyn automatic grease trap catches 99% of grease--instead of just 80% like an underground trap--it will better protect the city sewers. Smart progressive cities like San Francisco are actually requiring automatic grease traps like Goslyn because they are so good protecting sewers from grease. And automatic grease traps automatically clean themselves, eliminating the cost of a grease trap service. Thanks, Steve Edelson 415.939.2384 steve@fogbustersinc.com

Posted by Run, Don't Walk, from This, Ludwig's Team, a resident of Another Mountain View Neighborhood,
on Sep 26, 2019 at 11:51 pm

This article only briefly mentions a HUGE factor: "....the building has been put on the market for sale, which the Ludwig's team didn't know about until recently." First, why in God's name would they originally agree to establish a business on a property that the owners had been desperately trying to develop? And second, why would they now still even consider it, given there could be new owners who may have other plans for the property -- something nobody bothered to tell them when it mattered?

That property is cursed! Aside from the wildly successful Bierhaus, no business there as seen and meaningful success, and its limited in terms of what can be built there.

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