Downtown restaurants fight for business Downtown restaurants fight for business (April 23, 2004)

City needs more retail to attract visitors

By Jon Wiener

Shoppers in downtown Mountain View will not find a large grocery store, a stationary store, a pharmacy or a music store. But they will find 70 places to sit down and have a bite to eat. Small wonder Castro Street has come to be known as Restaurant Row.

But opening a restaurant downtown is hardly a sure bet for a business owner. Recently, Castro Street has seen closures of new and long-established eateries including the Global Village Cafe, Florentine Pasta Market, Vivaca Grill and Wienerschnitzel. Most of the closed restaurants are being replaced by newer ones at the same locations, according to Ellis Berns, the city's economic development manager.

"Lots of cities look at our downtown and say they really envy the fact that we have so many restaurants, because they attract a lot of people," Berns said. "We feel pretty positive with restaurants being the core of the downtown, and we're trying to recruit more retail."

"More retail." Those are the magic words to city planners and restaurant owners alike. Many downtown restaurateurs are concerned that Castro's lack of retail businesses, a problem that has vexed Mountain View's city planners for years, may pose a threat to their industry.

"Having a balance of retail and restaurants is a good thing for the downtown. The customer base is the same and they can work together in terms of attracting more business," said Karen Cabello, director of the downtown Central Business Association. What most people interested in the vitality of downtown Mountain View want to see is a grocery store, which they say will draw more visitors to the area.

"There's only a certain amount of people that come downtown to eat," said Miya Pei, co-owner of Cafe Yulong. "We like to have a lot of restaurants around us, but we need to attract more people with retail."

John Akkaya of Don Giovanni put it more bluntly. "The amount of people coming to Castro Street will not support the number of restaurants downtown," he said.

Akkaya opened Don Giovanni in 1997. Just staying open for seven years qualifies as a success story, especially in the restaurant business. But the prospect of a half-dozen additional restaurants opening in downtown over the next six months has him worried. Akkaya believes the solution is for the city to limit space for restaurants.

"They shouldn't issue any new licenses for restaurants," he said. "We have enough for the time being."

Pei, Akkaya and others in downtown have been hit hard by the economic downturn, both for its effects on individual consumer habits and the loss of businesses from the downtown area.

"The first things to go are expensive apartments and nice cars. Then people start to wonder if they really need to eat out," said Nick Chaput, owner of the Dana Street Roasting Company.

The state of downtown office buildings also made an impact. PayPal's departure from its office on Bryant Street removed 200 employees and potential customers out of the downtown area. Chaput said his revenue dropped $200 each day in the weeks following PayPal's departure.

Office vacancy rates throughout Mountain View have fallen from a high of 27 percent to about 20 percent, largely due to tech companies moving into the industrial parks in north Mountain View.

Chaput, who also serves as the president of the Central Business Association, said rents at some downtown locations can be out of step with vacancy rates.

"We have got some greedy landlords down here. Sometimes, when a business starts to do well, the landowner thinks that he's a co-partner in the business," he said. Chaput said his ability to negotiate a fair rate with his landlord is key to keeping his shop open. Other businesses that opened in 2000-2001, when rents reflected a vacancy rate below 1 percent, now are struggling to get by.

"I still don't get a sense that things are turning around," Chaput said. "I think you're going to see some thinning of the herd for a while, maybe even some empty storefronts," he said.

To Berns, those empty storefronts create an opportunity for the city, provided he eventually finds someone to fill them. He said the city has taken numerous steps to promote the downtown by helping business owners upgrade their buildings.

First floor retail (a category that includes restaurants) located within the special "Parking Assessment District" can pay a fee to help support the city's parking structures rather than providing their own parking, as is normally required by law. And a popular matching grant program for facade improvements is entering its ninth year and will be in front of the Mountain View City Council for renewal in the next month or two.

"Restaurants understand that in order to do business in Mountain View they need to constantly upgrade their quality," said Berns, a sentiment echoed by several restaurant owners. "There was a period of time when a restaurant would turn over, a new operator would come in and do minimal improvement," said Berns. Now the city issues conditional use permits that require health and safety upgrades to some buildings when a new business comes in.

Akkaya, who renovated his facade himself, agreed with Berns. "The outside of a restaurant has to be attractive -- that's why you go inside. I wish everybody would clean up. In the long run, it will help all of us."

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