Just hours after California Gov. Gavin Newsom disappointed a food industry that expected word on its future Thursday, he sat down to talk with a panel of restaurant workers across the state. Included in the group was Charles Phan, the chef-owner of San Francisco’s iconic Vietnamese spot, the Slanted Door — and his message for the governor was that, during the crisis, the rent is too damned high.
The conversation, which is embedded in full above, was part of Newsom’s “Economic Recovery & Reinvention Listening Tour.” Thursday’s remote tour stop is described by Newsom’s office as “a virtual roundtable with restaurant owners and workers to discuss their experiences and insights for what recovery can and should look like in a new economic landscape coming out of the COVID-19 pandemic.” In addition to Newsom and Phan, participants included Marc Simon, the CEO of Carlsbad-based fast food chain Rubio’s; Mariana Henriquez, the GM of LA’s Homegirl Cafe; Brenda Estrada, the owner of a restaurant called Nina’s Kitchen; and Debra Lewis, a server at LAX’s Point the Way Cafe.
Also on the call were various Newsom administration staffers and San Francisco billionaire/former presidential candidate Tom Steyer, the co-chair of Newsom’s 80-member Task Force on Business and Jobs Recovery. During the call, Phan argued that landlords need to “play along” with their restaurant tenants. As noted by the East Bay Times, Phan says that he’s paying around $40,000 per month for his restaurant’s two locations in San Francisco’s Ferry Building and in San Ramon.
Phan says that his Ferry Building spot served as many as 900 people per day prior to the pandemic, but he temporarily closed both locations when the Bay Area’s shelter in place hit. Pivoting to takeout won’t cover the rent, he says, as he signed his pricey leases “based on assumptions,” and he assumes other restaurateurs did, as well.
Landlords will need to “play along” if they want to keep their restaurant tenants in place, Phan says. Otherwise, “By year end, people will run out of hope, cash, and steam...We’ll see a lot of people throw in the towel.”