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Dining in a Downturn: In the midst of a recession, restaurants close doors, change things up 

The once brisk bar at MerendaOver the past half decade Bend's culinary scene has made waves on a regional and national level - even garnering

click to enlarge The once brisk bar at Merenda
  • The once brisk bar at Merenda
The once brisk bar at MerendaOver the past half decade Bend's culinary scene has made waves on a regional and national level - even garnering a mention in The New York Times. But you don't have to look too hard to notice some significant changes in the local industry - eateries of all types are opening, closing or changing their approach all over town.

Just this week, news broke that Deep, the chic downtown Japanese bistro, would be closing and then the following day, Jody Denton announced that his other restaurant, Merenda, would also be closing up shop. Both eateries' last day was slated for New Year's Eve.

In the past few weeks we've seen some of Bend's other well-known and most-talked-about eateries close their doors. The list of restaurants that have closed up shop this past year would at one time have read like a guide to fine dining in Bend: Bluefish Bistro, Hans, Volo...and now we can add Merenda and Deep to that list. At the same time, we've also seen an influx of new chains and franchises. It might seem like Bend is in the midst of a culinary collapse, but restaurant industry experts say that the changes we're seeing here are also occurring nationwide. Local restaurateurs are rolling with the punches and even as high-end eateries close their doors, owners say that Bend's reputation as a culinary hotspot isn't necessarily in danger-even as the dining landscape takes on a different look.

Gavin McMichael is the owner and chef at the Blacksmith Restaurant, Bar and Lounge, an establishment that earned a spot on Conde Nast Traveler's "Hot List" in 2004 (naming it one of the best 66 new restaurants in the world) but is now a case study in change. After a remodel more than a year ago, the Blacksmith reopened its doors with not only a new look, but some tweaks that arguably threatened its standing in Bend's fine dining scene. Blacksmith instituted a high quality, but low-priced happy hour menu during both the late afternoon and late night hours. And then the Blacksmith took its approach to increasing clientele by creating a club-like environment with a DJ and dancing on weekend nights.

"I'd probably be one of those restaurants that would be closing these days if I hadn't done all the things I've done. I don't know if I would have had a chance," McMichael says of the changes he's instituted at his establishment.

McMichael and the Blacksmith didn't invent the happy hour by any means - even if McMichael himself claims to have created a "happy hour map" during his college days that he and his buddies would use to navigate through town in search of bargain food and drink - but the restaurant was one of the first to hop on a happy hour bandwagon that seems to have flooded the downtown eateries and beyond. You can waltz into any number of Bend restaurants and find some sort of late-afternoon food and drink specials - whether at a pub-style location like the Summit Saloon and Stage or a more fine dining focused locale.

Ron Paul, in addition to sharing a name with a recent long-shot presidential candidate, is a restaurant analyst with Technomic, a Chicago-based restaurant consulting and research firm. Paul says that our happy hour trend is hardly unique and says that the same about the overall changes in Bend's dining scene. In fact, Paul says that expanded happy hour menus have even been instituted at massive chain restaurants like the Cheesecake Factory.

"It's really a fight for customer traffic at this point. They need traffic and they hope that getting them in the door they can generate not only revenue, but also a broader customer base," says Paul.

With the current state of the economy, Paul says that the figures his company has tracked indicate that fast food and chain restaurants are booming as diners tighten their budgets. Not surprisingly, Paul says that McDonalds is the strongest performer as of late and although Subway (which has a franchise opening in downtown Bend) is a privately traded company and more difficult to track, he says his company's research indicates that the sandwich chain is also having a good year.

Paul says there is a focus on what he calls a "perception of value" by American consumers in which good deals might trump high-end dining options in the minds of some. We've seen this in Bend - a good example being the closing of fine dining seafood locale Blue Fish Bistro and the emergence (in the same location only a month later) of the Bend Burger Company. This past year also saw the opening of mid-priced eateries in the Old Mill District like Café Yumm, Flatbread Community Oven and Pastini Pastaria.

Bend's restaurant industry rumor mill (who's closing, who's opening, who just got a new chef, who is revising their menu, etc.) has been spinning as fast as ever in the wake of Volo abruptly closing and the seasonal close of Fireside Red, both of which opened doors within the last year. But thrown right into the mix of these rumors came news that consultants working for Olive Garden were in town and looking into setting up shop at the north end of Bend.

If there was a bellwether for the state of a restaurant industry, be it local or national, Paul says that Olive Garden might just be it. He says that the restaurant chain, which is owned by Darden Restaurants (a Fortune 500 company that also owns Red Lobster, among other eateries) is a perfect indicator of the types of restaurants that thrive in a down economy.

"There's not a single dining critic who would say that Olive Garden is amazing. But you know what? The American people love it and that's because it has a perception of value. 'Unlimited salad and bread sticks'...what more can you ask for?" Paul says.

click to enlarge One of the other recent casualties
  • One of the other recent casualties
One of the other recent casualties To say that Americans are spending less on eating out isn't necessarily true. In fact, the National Restaurant Association released an industry forecast at the end of December speculating that the industry, which it says employs some 13 million people nationwide, would see a 2.5 percent increase in sales. But this modest gain could be completely negated should inflation continue to rise.

"In the year ahead, the industry's sales are projected to continue to increase, with a total economic impact that exceeds $1.5 trillion, yet at the same time, the industry is experiencing unprecedented challenges due to the economic recession and elevated food prices," says NRA CEO and President Dawn Sweeney in a press release.

Locally, McMichael speculates that the economy and slumping real estate market have been key hindrances to the restaurant industry.

"We have a lot of excess here in real estate and that trickles down to everything else and restaurants are part of that," McMichael says.

Carin Cameron owns Cork, the self-described "upscale American eclectic" restaurant on Oregon Avenue and says she's definitely heard a lot about restaurants closing in Bend - even rumors about her own eatery shuttering its doors. This, she says, is hardly true, but she is cautious heading into 2009.

"The next four months are going to be another make or break time. It's scary to look ahead, but I'm trying to look at it one week at a time," Cameron says.

She also says that downtown restaurants face a built-in financial pressure in the high downtown rents - some might recall that this was a reason cited by the owners of the popular nightclub and restaurant The Grove when it closed.

"Unfortunately, everyone can't make it right now with the rents the way they are. But, I feel lucky to be a small place," Cameron says.

Others restaurateurs like Denton don't consider themselves as lucky. Denton says that even with Deep closing, there was a possibility that Merenda would remain open under new ownership, but he says that deal fell through early Tuesday morning. He's confident both establishments will reopen under new ownership (Denton says he will not be active in either of the reopened restaurants), but doubts they will operate under the same format. And thus it's understandable that his forecast for the future of Bend's dining isn't all that sunny.

"I unfortunately think that Bend is about to go through what is likely to be a lengthy drought. We'll see what happens, but it doesn't look good," Denton says.

click to enlarge Better days in downtown Bend dining.
  • Better days in downtown Bend dining.
Better days in downtown Bend dining. Both McMichael and Paul say that the restaurant industry has been impacted by the credit crunch. When restaurants can't get credit, McMichael says, it makes starting or maintaining a restaurant much more difficult, especially in a time when private investors aren't looking to drop cash into a restaurant.

But even amidst restaurant closures some newcomers in Bend have found success and one of those is Jackson's Corner. The market/café is owned by Jay Junkin, who moved to Bend in 1999 to open Parrilla Grill, the wrap and burrito hotspot on Bend's Westside that he has since sold. Jackson's Corner has thrived, according to Junkin, by filling a niche market with pizzas, sandwiches, pastries and more - and also formulating a loyal customer base.

"As long as you can serve them what they need and want, and work into make it affordable for them and for you, then you'll find success even in these times," Junkin says.

While Junkin has focused on high-quality foods at affordable rates, he has kept tabs on the fine dining establishments in Bend and says it's unfortunate that some of them are closing.

"It's too bad that there was the quantity of those type of businesses that opened at the same time," says Junkin. "The psyche has changed. People are saying 'I want value and I want something that's comforting' rather than expecting something that's refined. I love that food and it's needed in the culinary world, but people treat it as an indulgence, so it gets cut out of their budget."

So where do all these changes leave Bend - a town that earned a glistening reputation for its restaurant options through word of mouth as well as national media attention? McMichael takes a stab at speculating as to the state of Bend's culinary reputation in the year to come.

"We're going to go into a dormant phase as to what happens to Bend dining. There will be less choices, but there should be enough here to maintain that reputation," McMichael says.

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