Jersey Mike's, Smashburger and Lotus Thai Cafe on Fifth Avenue have all closed this year. The restaurants are located just steps away from each other.
Hillcrest is known as a restaurant hot spot in San Diego. With more than 200 places to choose from, diners have lots of options in the eclectic uptown neighborhood.
But why is a busy section of Fifth Avenue in the neighborhood…empty? Between Washington and University Avenues, four restaurants have vacated in the last few months. Further down the block, other places have also changed face, with three other restaurants all closing within days of each other last year.
Since last fall, Freebirds World Burrito, Smashburger, Jersey Mikes and Lotus Café have all shut down. All but Lotus Café are part of larger, national food chains.
Those restaurants are located within steps of each other in a busy area, and many people walking by have wondered why that particular corner is perpetually unoccupied.
So what’s the problem? Well, there are a few possibilities.
The first is that the concentration is just too great. Hillcrest has dozens of restaurants vying for customers within a relatively small area.
Mike Wright, who formerly owned City Delicatessen on Sixth and University Avenues, said with hundreds of eateries in a small neighborhood places are competing for customers more than ever before.
“What happens is, you have over-saturation, and we’ve got an area we created that’s popular for dining and what’s happening is big space restaurants are having a tough time,” he said.
Nancy Moors and Ann Garwood, who have been publishing the Hillquest urban guide for 10 years, said Hillcrest’s popularity for dining has also put it in high demand for up-and-coming chefs who often have a hard time maintaining the financial aspect of an eatery.
“Just because you’re a good chef or want to have a restaurant in Hillcrest doesn’t mean you’re a good business person,” Moors said.
And the restaurant business is known for being difficult.
“There’s so many reasons restaurants fail,” said Carl Winston, San Diego State University’s director of the L. Robert Payne School of Hospitality and Tourism Management.
Some of the reasons restaurants come and go could be because there are low barriers of entry, Winston said. He cited particular problems for Hillcrest, including a small residential population, too much supply and one major issue: Parking. Hillcrest is notorious for having very few free spots.
“Parking in that area is a nightmare,” Winston said.
Wright agreed, saying people aren’t willing to add that expense to the cost of their meal.
“The bottom line is that there is parking in Hillcrest, but nobody wants to pay for it,” said Wright.
To help with this problem, Hillcrest recently launched a parking smartphone application and trolley service from Thursdays to Sundays, though it’s unknown as to whether it’s helping the parking problems in the area.
Cost of rent in Hillcrest plays a factor for fair-weather businesses as well, as bills can be considerably higher for restaurateurs.
“It’s a high rent area, it’s really a tough nut to crack,” said Moors.
Wright also said he’s seen rent consistently go up, making it hard for businesses to commit to a space and landlords to find a reliable business for the area.
The two main rental properties on the 3900-block of Fifth Avenue are owned by Carlton Management, Inc. and Cassidy Turley San Diego. Neither would reveal how much the cost of rent can be in those spaces, but business owners said it often costs upwards of $5,000 per month.
But Garwood said because the area is so popular, the storefronts won’t be empty for long.
“Hillcrest is just a really special neighborhood and it will continue to be a successful neighborhood,” she said. “By and large, there’s always someone waiting to take that space.”
She’s right. Amici’s East Coast Pizza is taking over the storefront formerly occupied by Freebirds, which has been empty since last October. And RB Sushi will take over Lotus Café's space, confirmed Mike Clark from Cassidy Turley.
“Unfortunately, the Lotus Café concept was tailored to a narrower audience and did not catch on in Hillcrest as well as its operators hoped,” Clark said in an email. “On the other hand, a sushi restaurant had been a successful part of The Village Hillcrest for many years.”
As for the other empty stores? They’re still up for grabs – but Garwood joked that those areas seem cursed.
“There are a few spaces that have skull and crossbones over it.”