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.
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.
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.
This article appears in Jan 1-7, 2009.
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Expanding the subject of dining in downtown bend to dining in bend, I have counted at least 17 restaurants in general that have closed from 2007 through 2008 and at least 3 restaurants that transformed their menus or were purchased. This is a clear sign of the over proliferation of restaurants fine or otherwise in Bend. The consumer has clearly spoken that they want the biggest bang for the buck and the economic situation has reinforced that adage. Restaurants are not the only businesses that can be established in Bend. Show some creativity or at least survey the public on what they want.
The financial crisis is not over yet. Surely Obama has given us some new hope, but he is put in a position to spend as much if not more than Bush did in eight years to get the economy going again.
Commercial lease rates are the reason businesses are shutting their doors. No further explanation is needed. Hans who had one of the best places simply left when he was faced with lease rates out of this world. He was a business man and saw no interest in working for some greedy landlord. He bailed as he was smart. When lease rates in Bend are equal to Rodeo Drive and Manhattan, then we have to wonder what is going on. At least in LA and NY people make the money to live there, while Bend is still at poverty wages on a nationwide scale. It is sad, but this downturn will bring commercial realtors back to planet earth. Restaurants are risky enough, then add on the stress of lease rates into the stratosphere. Jody Denton has done a great job of bringing a real restaurant experience to our small mecca of a town. I am sad to see him shut down. Before he came to Bend it was buffalo burgers and onion rings with the beer.
Bend prices are going to drop further until they are competitive. When Bend offers up jobs paying real money like the rest of the country, then we will see prosperity again. the greedy know who they are and I feel truly sorry for those who bought commercial property at astronomically low cap rates. One would have been better off in 90 day CD’s.
More will fail and fall before this crisis comes to a halt. Commercial properties are overvalued by as much as 200%. Residential real estate is still too high as well. We are still going to see a downturn in the area of 40% yet in value before prices are realistic again. Low rates and FHA loans are not the solution as FHA loans are a way to push high risk onto government and obsolve banks of their risk and responsibility. How does this fit in with eating out? It is all a part of the whole picture.
Does this mean that all the foot traffic is leaving downtown? Does that mean it may possibly be once again kind of a ghost downtown?
Maybe it’s time for the government to bail out the high end restaurant industry!
I hope so… I would like to see more tumble weeds and less Calis strolling downtown. More pickup trucks and fewer Prius’. More cowboys and cowgirls, and fewer faux ranchers.
The unfortunate closures of both Deep and Merenda does not bode well for Downtown Bend in 09. High rents on Bond and Wall will make it very difficult in this economy for all downtown business not just restaurants to survive. Sad to see both close.
People who have given their life to the pursuit of a dream are failing for a variety of reasons–unsustainable rents are a part of the problem for some, but the economy sucks! The schadenfreude I see on the part of a certain segment of the population who seem to think they are immune to the effects of these failures pisses me off to no small extent. People are out there trying to be a part of something–trying to build something. Why persist in denigrating their efforts, failures and successes? If everyone demonstrates that attitude, the situation will be catastrophically worse than imaginable–and it is pretty f—ing bad! I wish I knew that my crap didn’t smell the way some of you do. Merendas and the Deep may not have been my kind of place, but I see people who have been here for decades struggling, too. CO rednecks, cowboys, and cowgirls will find it tough to get the things they need when their oxen are gored with those of others.
Can I be smug, sarcastic and vindictive when that happens?
This bust was a long time a coming. When lease rates in downtown Bend are higher than Manhattan and the greed has gotten out of control, then a restaurant owner like Jody Denton reaches a point where he is no longer working for himself, but rather his landlord. Jody brought some great fine dining to Bend and is a well known chef. I thank him for bringing some great dining to this area.
The commercial market here is going to suffer for a long time into the future. The bust is due to GREED running the show. Greed all the way around. One is better off putting their money into CD’s and avoid the hassle, the management fees as well as the high level of arrogance in this market.
Hans who had the best restaurant in Bend for decades shut his down due to a greedy landlord wanting him to pay some astronomical lease rate. He was not going to work to make huge money for some land lord.
The commercial rates in Bend are still 50% too high and this is not what recent new owners want to hear, they want to know that they spent their money wisely and made a good investment, but this is no longer so. It will take over a decade to see the prices get back up to where they once were.
We are going to see a lot more restaurants go under due to lease rates. Rumor on the street is that a well known west side location is also on their way out due to GREEDY landlords.
Who is to blame? A good question. Wall Street Execs paid themselves over 18 Billion in BONUSES in 2008, the fifth highest bonus year in American recorded history. GREED again rules.
If you want to lease property, offer half what they are asking and if they do not take it, then it surely makes sense for them to leave them sit empty for years. Also in this economy sign nothing more than a six month lease at a time with a renewal clause with a very low increase in lease rates.
The market for all of our economy will correct itself the quickest when people get off their high horse and realize what the true value is of real estate, leases, gas prices and gets into thinking based on integrity and honesty.
I will lower my rent to 1975 levels to the first person that sells me a 1966 Vet, 1966 AC Cobra, 1971 Cuda Hemi convertible, 1969 Chevelle SS 396, Vincent Blachshadow, Harley XR 750, or 69 Camaro SS Rally Stripe, cost in 1975.