Cliff House Owners Say Federal Mismanagement Killed 157-Year-Old Ocean Beach Restaurant

The Cliff House, the iconic restaurant that’s overlooked Ocean Beach since 1863, won’t reopen when the pandemic ends. But we shouldn’t blame the coronavirus crisis for its closure, proprietors Dan and Mary Hountalas say — it’s the National Parks Service, which owns the restaurant's building, that’s responsible for its demise.

In a statement sent late Sunday and since picked up by a panoply of local news outlets, the Hountalas family says that the saga began on June 30, 2018, when their 20-year lease with the National Parks Service ended. The Hountalas family, which has managed the Cliff House since 1973 (four years before the NPS bought the restaurant from then-owner George Whitney, Jr.), said that it wasn’t until over a year later, in 2019, when the NPS started the application process to confirm a tenant for the next 20 years, offering six-month and one-year lease extensions to the Hountalases in the process.

When contacted by Eater SF in January of 2020, nearly five months after the application process began, an NPS spokesperson refused to confirm when the operator of the Cliff House would be named. A spokesperson would only say that “a public announcement when that final decision is made and the appropriate parties are notified” and that “we are working through the review process and will announce the decision as soon as possible.”

When contacted in September by Eater SF, NPS spokesperson Julian Espinoza said that “the National Park Service is not permanently closing the Cliff House. We are continuing the solicitation process, which we first announced in August 2019, and hope to have a new lease agreement in place in 2021.” The NPS has not responded to Eater SF’s questions on the restaurant’s future since, including a message sent early on December 14. Update: In an email sent Monday afternoon, an NPS spokesperson said “we have honored their request to let the existing concession contract expire” but that “we do not have any further information to provide at this time.” The spokesperson did not respond to any questions posed by Eater SF.

However, that’s not what the NPS told the Hountalases, according to their statement. Instead, they say, on December 7 the NPS informed them that the first application period “has expired and will need to be completely redone causing a further delay of what could be years.” Their current lease extension, set to expire on December 11, could be extended by one more year, the NPS allegedly told the Hountalases, which would allow them “to continue guarding and maintaining their building with all costs to be paid for by us without any compensation whatsoever from the NPS.”

This wasn’t a manageable arrangement to the Hountalas family, they say. Shuttered at the beginning of the pandemic, the Hountlases attempted to reopen for takeout and delivery in June, “but after 10 weeks could not continue to sustain the unbearable losses associated with takeout,” they say. And because it “costs tens of thousands of dollars every month to maintain and guard the massive Cliff House building,” another extension — especially without knowing the eventual fate of the longer-term lease — wasn’t an option. Their claim on costs is likely accurate, as the Cliff House contract also requires maintenance of a nearby parking lot — and given the punishing sea air, systems like HVAC, locks, and other interior and exterior elements must be replaced on a regular basis. In fact, say potential vendors who spoke to Eater SF, the maintenance expectations for the next tenant are so great that it would “make it impossible to turn a profit.”

And that was before the pandemic. Now add to that that the Cliff House’s insurance claim for business interruption was rejected (prompting a lawsuit against policy carrier Allianz) and the current, ongoing shutdown.

The Hountlases say that now, “we must remove all personal property in the building including all memorabilia as opposed to being paid for our property by the ultimate successor operator as provided in our contract.”

While the pandemic has obviously had an impact on the Cliff House’s operation (and the Hountlas family, which also operated the now-shuttered Louis’ restaurant just up the street since 1937), the Hountlases say that the real issue is the NPS. “There really is no excuse to be in this situation,” they say in a statement. “There was no COVID-19 in 2018; one or more upper echelon leaders within the NPS obviously did not do their jobs, resulting in this sad situation.”

The Hountlases warn that with them out of the picture, taxpayers will foot the bill for building protection and maintenance, and that “the Cliff House will be boarded up and fenced in for several years as [the NPS] once again try to implement their own processes.”

“Realistically we are looking at two to three years of a closed facility,” they write. “And if there is insufficient maintenance done to keep it up, re-opening costs will be tremendous. How will The Cliff House look/feel when it eventually re-opens? Will there be some element of local ownership? Will it even be The Cliff House?”

You can read the full statement from the Hountlas family below.