Jarod Ottley (above) was the second chef at Cellar Door, taking over from Charlie Parker in 2010. Ottley was replaced by Ryan Shelton shortly before the name was changed to Le Cigar Volant. Photo by Dan Pulcrano.

Ryan Shelton remembers the first weekend that Le Cigare Volant was packed three nights in a row while he was executive chef.

“It was the first time that we were busy Friday, Saturday and Sunday. That Sunday, we did 70 people, but we turned away 100,” says Shelton. “We expected to do a hundred, hundred, hundred, but we did 130, 150, and then by Sunday I was like ‘I don’t have any more food left.’ I think we had 10 orders of salmon at the end of Sunday. But all the beef was wiped, all the chicken was wiped. We were down to two appetizers. I think I even sold out of all the salads. We wiped that place.”

Unfortunately, the place was already wiped. Its first busy weekend was also its last weekend in existence, as Randall Grahm’s ambitious bid for a destination dining spot in Santa Cruz closed at the end of December.

Steeped in natural foods culture and surrounded by grazing lands, small farms, the Pacific Ocean, wine regions and Northern California’s wealthiest county, Santa Cruz County would seem perfectly positioned to become the next Napa Valley. So why did the one restaurant that had attracted national attention—including a feature in the New York Times—struggle to find its footing?

After opening the restaurant three years before as the Cellar Door with superstar chef David Kinch as an advisor—part of a million-dollar-plus, ultramodern tasting space on the West Side—Bonny Doon Vineyard’s iconoclastic owner Grahm renamed it Le Cigare Volant last spring, shortly after bringing in Shelton. At the time, Grahm was famously quoted as saying “we want to have
the best restaurant in Santa Cruz.”

The reviews suggested that they were definitely in the running, as when the San Francisco Chronicle’s Michael Bauer called Shelton’s menu “fresh and sophisticated” (though he declared his favorite Santa Cruz spot to be Patrice Boyle’s La Posta).
And yet, something didn’t click. The initial rush from the media attention wore off, with occasional bumps when a new feature or review would come out. Graduation weekend briefly moved the needle, but things only got slower from there.

By October, the restaurant was barely doing half-capacity on a Saturday night. By the end of the year, just nine months after the re-launch, it was gone.

By that point, even Shelton, who came over from Palo Alto’s Michelin-starred Baume to run his first signature kitchen, couldn’t be surprised or even devastated.

“It was a relief, basically,” he says. “I hated to see it struggle.”

Epic Fails

So what happened, and what does it say about the outlook for destination dining in Santa Cruz? And, though they weren’t on the same level, what about the recent closing of longtime fine dining spots Peachwoods and (at least temporarily) Casablanca, or Pacific Avenue’s Aqua Bleu?

Before attempting to answer such questions about the local restaurant scene, it’s important to address two variables that are not unique to here. First, there’s the issue of the restaurant attrition rate in general: it is notoriously high. The National Restaurant Association, perhaps wisely, does not track the failure rate of restaurant start-ups. Nor, it seems, does anyone else. In the absence of hard facts, a lot of high numbers are regularly tossed out, but the most famous is probably the most ridiculous: in 2003, on his NBC reality-television show The Restaurant, chef Rocco DiSpirito declared that 90 percent of new restaurants fail in their first year. In an article—“Restaurant Failure Rates Recounted: Where Do They Get Those Numbers?”—author G. Sidney was able to calibrate the percentages more carefully, based on a 10-year academic study by Cornell and Michigan State universities: after one year, 27 percent of restaurant start-ups failed; after five years, 50 percent of the restaurants studied were no longer in business; after 10 years, 70 percent of them had shut their doors. There’s no denying it is a brutal business.

The second issue is what constitutes “destination” or “high-end” dining in the first place. It’s a subjective notion, and ironically one with which several Santa Cruz restaurateurs told me they try to avoid being tagged, since it can lead to the perception that they are strictly for “special event” dining—the same way that even some affluent diners will only consider going to Los Gatos’ Manresa once a year, or once a lifetime.

In Santa Cruz, a restaurant’s customer base needs to be much broader. Patrice Boyle, owner of two of the area’s most popular top-tier restaurants, Soif and La Posta, says the reason Soif celebrated its 10th anniversary last August has much to do with its diverse clientele of both locals and tourists.  

“You need the entirety of the community,” she says. “You need people who are passing by, people who go out once every six months and people who go out every night. We have some clients who are here at least twice a week. We’re their spot, we’re their ‘regular,’ if you will. You need all of that to survive.”

The “destination” perception is one that may have hurt Le Cigare Volant.

“The whole ‘special occasion’ thing, I don’t know that we shouldn’t have been charging $100 per person for Cigare Volant, because people treated it like we were,” says Shelton. “And if we were in San Francisco, we probably would have.”

Do the Math

San Francisco definitely plays a role in some of the issues faced by Santa Cruz restaurant owners. One is the matter of perception.  

“The thing about Santa Cruz is all our food costs are the same as San Francisco, or higher,” says Jozseph Schultz, owner of India Joze. “It’s just as expensive to live here as it is in San Francisco, basically. But you go to San Francisco and you expect to pay—it’s a big city, you’re going to pay for it. Somehow people have this idea that, ‘Well, I’m in Santa Cruz, so I shouldn’t have to pay so much for a dinner.’ I know that all the high-end places that have ever been in Santa Cruz are always fighting that.”

Schultz revolutionized the dining scene here in the ’80s and ’90s with the original India Joze, but gave up on the idea of high-end dining—partly for practical reasons, partly for political ones—after he sold the restaurant in 1996. He opened a new India Joze on Front Street in 2010.

“I sort of felt that I couldn’t maintain the accoutrements of what fine diners expect. I couldn’t do that and still keep prices in a reasonable range. I mean, I still get everybody in India Joze, because I have that history,” he says. “But at this point, the market for restaurants—and everything else—is very stratified. You have very niche marketing. You don’t see this mixing of different socioeconomic groups that you used to see. It’s a breakdown of community. Right now, I have people who won’t come into India Joze because the silverware doesn’t match, or whatever it is.”

Paul Cocking, who has run Gabriella Café for 20 years, says Santa Cruz restaurant owners are also up against basic arithmetic.

“A lot of people say ‘why is San Francisco so busy? Why do restaurants with much higher prices exist there, and they can’t exist here?’ But just look at the population they have to draw on,” says Cocking. “We have a half-dozen decent restaurants within a couple of miles of downtown. But how many people are within driving distance? A couple hundred thousand? In San Francisco, they’ve got millions of people within a half an hour, and maybe 12 restaurants that we talk about here. Places like Delphina are busy every night. Saturday night is probably a three-week book. A16, same deal. ”

Cocking remembers what Charlie Deal, who founded Oswald, told him about the local scene several years ago. Deal had moved on from the high-end Oswald at the time, and was about to go in a totally different direction with the Asian-street-food spot Charlie Hong Kong, despite many people telling him he should open another fine dining restaurant.

“Charlie told me he didn’t think there were enough people in Santa Cruz to fill a large high-end restaurant. I think that’s the biggest challenge for tablecloth restaurants: there are just so few people here that eat out often enough on Tuesday nights and Wednesday nights and Thursday nights. They go out on weekends. But to succeed in this business, you need to be busy every night.”

There’s also the issue of the recession, which hit Santa Cruz restaurants even harder than most people probably realize.

“In ’07, when the stock market crashed, business fell off dramatically,” says Cocking. “I probably did half in ’07 what I was doing in ’05, almost. In restaurants, when you’re operating on—I think the industry average is 10 percent profit margin, which is pretty hard to achieve, really—you drop business in half and it’s pretty hard to survive.”

A Different Scene

That was about the same time that Boyle started La Posta, which celebrated its sixth anniversary in December.  

“We struggled for a couple of years,” says Boyle. “The first three years, frankly, were a big struggle. But when Katherine [Stern, the current chef] moved in, it was smooth sailing.”

Perhaps the reason Boyle wasn’t afraid of failure at her second location was that few people had faith in her first: “A lot of people told me that I would fail miserably when we opened Soif. They said ‘you are completely nuts.’ I thought, ‘Well, maybe we are. We’ll see. I hope not.’”

Instead, Soif was an instant success. “It was definitely a gamble. But there was nothing like it. The food is great, the wine list has always been really, really good. But it’s fairly causal. We have a real mixed clientele. People who are off to the movies, people who want a snack, people who want to sit at the bar and geek out about wine, people who are here for a date and are dressed up and want the ‘dining experience.’ There’s nothing else quite like that, so we didn’t have the same kind of competition,” says Boyle.

Perhaps no descriptor comes up in a conversation about what works in Santa Cruz dining as often as “casual.” It’s a big part of Café Cruz’s successful 18-year run, says Nikki Wilson, who co-owns it with her husband Steve.

“Santa Cruz is a pretty casual place. That’s part of our culture here. There are still people who like all the nuances of high-end dining. But there are a lot of people here who don’t think it’s that important,” she says.

Wilson thinks there’s a strong market for fine dining here—as long it has that element of accessibility.

“Santa Cruz is such an up and coming place. People are coming to Santa Cruz for a lot of reasons, and that creates a lot of opportunities for restaurants,” she says.

It’s telling to note the biggest changes that Oswald manager Keet Beck-Brattin sees between the last incarnation of the restaurant (with which he was also involved) and the current one. He calls the new Oswald “surprisingly casual.”

“We’re not really trying to be fancy,” he says.

There’s now a bar, which Beck-Brattin says has boosted the energy level in the restaurant.

“Our quality of food and beverage remains consistent, but I think in its most recent incarnation it’s a fun, lively place for people to go.”

Cindy Geise, who owns Ristorante Avanti with her husband Paul, says ultimately the key to making a restaurant work in Santa Cruz at any level may not be all that different from anywhere else. After 25 years in the same location on Mission Street, the Geises moved Ristorante Avanti just a couple of blocks to a new location last year, and opened the new Pizzeria Avanti in their old spot.  

“There’s definitely a secret to success: it’s called work hard every day, and improve your business every day,” says Cindy Geise.

Sourcing of Pride

If it’s true, as many restaurant owners claim, that the local scene is crowded, what makes so many people want to have a restaurant in Santa Cruz?

“The people who have restaurants there must really want to be in the area,” says Shelton. “There’s been no one even doing a second location in Los Gatos, or doing a second location in Half Moon Bay. It’s all still Santa Cruz. Clearly, those people want to be in Santa Cruz.”

But he prefaces all of his comments by saying that however difficult high-end dining can be in Santa Cruz, he enjoyed working here and completely understands why chefs, owners and other restaurant types want to be here.

“It’s cool, Santa Cruz itself. It has the reputation,” he says. “When I was using N-A Ranch Beef, people would say, ‘Oh, you’re using Tommy’s beef?’ I was like ‘oh my god, you know the first name of my friggin’ rancher? How do you know that?’ People get it there. You’re not on a soapbox shouting to no one. You’re basically preaching to the choir. Everyone there, they know. That’s how they shop at home, that’s the only restaurants they go to. That’s the why of being a restaurateur there. It’s almost a fake utopia thing. It’s Michael Pollan Land, where everything is real.”

“It has an extraordinary base of great food and great base materials—seafood, vegetables, fruits—that is really amazing,” says Boyle of Santa Cruz. “It’s a fabulous place to live. We’re in this great little spot, so people want to be here. Where we’re located is I think pretty good, even with the hill. We could definitely maybe use a few more higher-end hotels, but that’s probably a lot like the restaurant business—really hard.”

While working in Santa Cruz, Shelton says he’d go to other places in the Bay Area he liked— “places that are supposed to work really hard to source farms”—and feel like, comparatively, none of it was good enough.

“I was like, ‘this is not local, this is not special! This is standard!’ They’re trying, but it’s so hard there. It’s good enough for people in the East Bay or San Francisco, even the South Bay. It’s good enough to see standard stuff, as long as it’s not crap. But in Santa Cruz, when I say something is Dirty Girl shelling beans, people go ‘I didn’t see it at the market today.’”

Crashed Cigare

As to the whys behind the failure of Le Cigare Volant, everyone on the local scene seems to have a different opinion. Not enough time to succeed, lack of a consistent direction for the restaurant, poor location—the list of speculative factors goes on and on.

“Randall has a tendency to change focus a lot, and I think that’s very hard on a restaurant,” says Boyle, who was general manager at Bonny Doon Vineyard for 12 years before she opened Soif. “It’s hard enough in any business. But for a restaurant I think it’s really, really hard. You can make little tweaks and changes, but I think making big changes is sometimes perilous.”

“His intentions were very good,” says Charlie Parker, who was the restaurant’s first executive chef, back when it was Cellar Door. Parker left in 2010, and is now chef at the gastropub Freddy Smalls in L.A., but he still sees huge potential here. “Santa Cruz is the most amazing place to have a restaurant,” he says.

It’s clear that high-end dining is not going to continue to succeed here without what Schultz calls “buy in” on the part of the community—supporting what the restaurant owners and chefs they like are doing, even if it isn’t always perfect.

“The thing that’s so sad about the upper-end places like Le Cigare Volant is it was a beautiful place to go, it felt great,” he says. “You can argue about was the food worth it or not. I don’t know. But you can’t have a space like that unless you support it. Because a slight downturn, 10 percent off, and suddenly none of your numbers are working anymore. It could be a lot of things—the weather’s bad, there was a power outage. What we need to do is think of the value of a restaurant not in the specific experiences, but the existence of the restaurant at all. Whether it’s Taqueria Vallarta or whether it’s Soif, it’s a part of your life.”