SEATTLE CHEF MATT DILLON opened his restaurant Sitka & Spruce in a tiny Eastlake strip-mall space next door to a Subway in 2006, back when the city had cheaper rent and more manageable traffic. He had a vision: Take the culinary technique and reverence for Pacific Northwest ingredients he’d learned from the renowned Jerry Traunfeld at the Eastside’s high-end Herbfarm, install it in this spot on a DIY shoestring, and make beautiful, local food at much more accessible prices. He put in a few tables and a small counter, and put up a chalkboard sign reading “Food worth standing up for.” The first album he played when he opened the doors was by punk band Minor Threat.
People stood up for the food at Sitka & Spruce. In 2010, Dillon moved the restaurant to a bigger spot in the fashionably rehabbed Melrose Market on Capitol Hill. He won a James Beard award, and, eventually, he ran several restaurants — creating warm, welcoming places for people to cook and serve, as well as eat. Along the way, he supported local foragers and farmers, and he became a mentor to many, including chefs Logan Cox of Homer, Emily Crawford Dann of the Corson Building and Edouardo Jordan of Salare.
But New Year’s Eve 2019 was Sitka & Spruce’s final night. What started out all heart in a Seattle that supported young chefs’ dreams ended with Dillon crunching numbers, agonizing and coming to the very difficult decision to pull the plug.
He’s not alone in the realization that equations that used to work in the Seattle restaurant industry now don’t add up. As the city’s unprecedented restaurant boom begins to show signs of slowing, other prominent chefs and mom-and-pop operations alike are doing the same sad calculations.
“In order to buy great product and pay a great wage that people can live on in our city …” Dillon said when he announced Sitka’s closure, “the math just doesn’t work.” For Seattle restaurants overall, he predicted, “There’s gonna be a reckoning, big time. I don’t think it’s gonna be pretty.”
AS SEATTLE HAS GROWN WILDLY, so has its restaurant scene. At the beginning of 2010, the year that Sitka & Spruce moved up to Capitol Hill, the city was home to 2,331 restaurants, according to Department of Revenue data. At the beginning of 2019, restaurants here numbered 2,790 — an increase of 20% in under a decade, keeping pace with a population increase of 22.8%. (The DOR figures represent all food-service businesses, including full- and quick-service places, trucks and carts, and caterers.) Over the course of last year, more than one new restaurant debuted per day in the Seattle area. And Seattle restaurants’ gross annual sales are big-time: a 2018 total of $3.2 billion.
But the increase in average annual sales per restaurant (or truck, or caterer) spiked to a high of 7.73% at the beginning of 2015. By the start of 2019, that figure had become a decrease of -0.2%. Industry veterans talk about oversaturation. Longtime top-tier Seattle chefs such as Maria Hines — who, like Dillon, pared her mini-empire down to just one restaurant, Tilth, this past year — observe that public interest has become more fickle, with diners in pursuit of all that’s shiny and new at the expense of established favorites. New superstars aren’t immune, either. Two fresh James Beard awards don’t make Edouardo Jordan feel insulated in running his Ravenna trio of Salare, Junebaby and Lucinda. He speaks of the city’s “changing dynamics making it harder to just survive … Even me, I’m counting pennies every day to keep the doors open.”
And recent Seattle restaurant closures, big-name and smaller scale, feel full of portent. Traunfeld, an industry luminary and mentor to many beyond Dillon, closed his mainstay Poppy this past year. The space is now home to a new restaurant, Carrello, and Traunfeld is happily moving to Palm Springs, California, but this represents a changing — or even a loss of — the guard. Two of the city’s biggest players, Tom Douglas and Ethan Stowell, announced multiple closures at the end of 2019 — possibly a result of overexpansion, but destabilizing to the industry nonetheless. Small neighborhood operators, meanwhile, face many of the same pressures, with far fewer resources to fall back on.
What, exactly, are those pressures? The “lost lease” is a common refrain — a catchall for issues ranging from rents raised to an untenable level to landlords who’ll only renew month-to-month so as to keep their options open. The lease was up on the Sitka & Spruce space and, putting sentimentality aside, Dillon says he looked at it as if he were opening the restaurant today.
In 2010, when Sitka moved in, Melrose Market as a whole was appraised at $2.4 million; last year, the property was sold to an out-of-state investment corporation for $15.5 million. With the new valuation, costs associated with the rent — property taxes, insurance and more, which get passed along to tenants — were ballooning, and not going to deflate anytime soon.
“There’s a lot of outside investment, not local investment, in the buildings and infrastructure,” in Seattle today, Dillon says. “They’re not investing in the community… they just need to get their return for their investors.” He’ll continue to run his other Capitol Hill restaurant, Bar Ferdinand, with a more manageable lease in a building that’s still locally owned.
WHAT ABOUT THE MINIMUM WAGE? “The $15 argument — what’s the point?” Seattle restaurateur Ethan Stowell says. “Two years later, everybody’s making more than that anyway.” Stowell wishes the minimum-wage issue had gone to a vote, and bemoans the time and expense spent by operators large and small on figuring out how to implement it. The whole thing happened too fast and without enough support for owners, he opines. But he’s already paying cooks $20 to $24 an hour.
It’s a refrain from restaurant owners across the city: To even get anyone to come work, you have to offer above the minimum anyway. For a 40-hour week, $15 is $2,400 per month, pre-taxes. In Seattle in 2010, median rent and utilities cost $721 a month; by 2018, that more than doubled to $1,699. And as low-wage workers have been priced out, even more are needed by the hungry restaurant industry — in November 2019, job postings for food-service workers in Seattle-King County numbered 3,632, according to the state Employment Security Department. It’s not just Seattle, either; the restaurant labor shortage extends nationwide, with looming crackdowns on undocumented workers adding to the strain.
“Is $15 killing the Seattle restaurant industry? It’s absolutely not,” Stowell reiterates. He, too, cites increased competition as one factor — when he debuted his first restaurant, Union, in 2003, just one opening was a big deal, he notes, laughing. But mainly, he says, “The cost of living in Seattle is going very high, and it’s trickling down to business” — rents, labor cost, product. Just raise prices, some say, but Stowell points out, “You can ask 100 restaurant owners, and what we hear over and over [from customers] is that it’s pricey for what you get.”
Stowell closed the three lowest performers of his dozen-plus Seattle restaurants — Super Bueno, Bramling Cross and Marine Hardware — at the end of 2019. He’s converting Super Bueno into another branch of his proven pasta place, Tavolata; the others have become private event spaces. He’s sanguine about it, for a reason that’s somewhat counterintuitive: “I feel fortunate to be in a position where we can afford to close restaurants,” he says. Stand-alone places, he points out, can get into positions with leases to uphold and loans to repay — which sometimes may be called in if the business folds — where they have to stay open even if profits aren’t there, working very hard and “just making ends meet to pay the bills.”
Stowell says he’s loved “the idea that restaurants can be a place where somebody of lower income can own their own business.” But he, too, sees contraction coming in the Seattle restaurant industry. “It’s harsh, and it’s not fair,” he says. “The ones that don’t make it, I feel bad for.”
LITTLE UNCLE WAS MAKING IT, but owners Wiley Frank and Poncharee “PK” Kounpungchart felt stretched thinner and thinner after running one of Seattle’s very best Thai places — known for its nuanced super-tastiness — for almost a decade. The couple met in the kitchen at chef John Sundstrom’s former Licorous. Kounpungchart says they built their business right, starting with pop-ups and eventually landing in a small brick-and-mortar on Madison, always emphasizing craft and sourcing superior ingredients. Bon Appétit agreed, putting Little Uncle on a nationwide top-50 list in 2016.
But for the last three years, Kounpungchart says, they, too, had a hard time finding workers. “You get fatigued training people, and there’s always turnover,” she says. “By the time we closed, it was just the two of us at lunch,” working alone, she notes.
Longtime regulars who were moving away would come to say goodbye — people who worked in the industry who’d eat at Little Uncle before their shifts, artists who’d been able to afford to live in the neighborhood but couldn’t anymore. “The cost of living just went up so high …” Kounpungchart says with feeling. “You feel that squeeze. It’s good for growth, but it isn’t good for affordability.”
During the same time frame, as Seattle got more crowded, driving to work or running Little Uncle errands took longer. “It’s just hard to move around the city,” Kounpungchart notes.
They felt pressure to join up with the increasingly popular app-based delivery services — one estimate puts more than half of restaurant spending off-premises in 2020 — but it just didn’t make financial sense. “The margin of restaurants is so low already — to have a third party take that from you …” she trails off.
Then there was social media, of which Kounpungchart is not a fan. “I think Instagram and social media have ruined the food industry,” she states flatly. “People don’t give a [expletive] about what ingredients we use anymore — it’s just as long as that plate looks Instagrammable. They eat with their picture instead of really tasting the food and realizing how hard it is to get that food in front of them.” Some customers would take “tons of pictures, then complain that it’s not hot,” she says and laughs. “There’s a shift in the generation” at work here, she believes. At the same time, devoting more of her and Frank’s scarce resources to cultivating their own social media felt like a fresh burden.
“Using good ingredients, creating a community — after a while we felt, wow, is this all worth it? … Just the hustle, every day?” Kounpungchart asks rhetorically. She’s now learning carpentry and doing construction, while Frank’s pursuing a bread-based dream at Columbia City Bakery. She says they were ready for a change. “The kids are like, ‘Whoa, this is so weird — we’re having dinner together,’ ” she laughs.
And Kounpungchart does see hope for Seattle’s restaurant future. She cites new Lao restaurant Taurus Ox, which has already taken over the Little Uncle space, as a bright spot and a perfect fit, with the owners planning to “run it as tight as they can,” doing much of the work themselves. “Chefs are like artists,” she says. “They come up with new ways to make things work … A new generation of growth is going to happen from this.”
For his part, Dillon says the now-old-school Seattle high-quality DIY ethos isn’t completely gone. He sees small-scale, affordable excellence coming from chef Sun Hong at his eight-seat, lunch-only Capitol Hill restaurant By Tae, as well as Mckenzie Hart at the Central District combo bike-shop-and-cafe Peloton. Lower Queen Anne’s Paju, from two friends who met in a New York Michelin-starred kitchen and now make modern Korean food for under $20 a plate, also fits the mostly broken mold.
At the beginning of Sitka & Spruce’s last night, Dillon was out in the middle of Melrose Market’s high-ceilinged, old-fashioned space, affixing commemorative menus signed by the staff to the back of framed prints by local artist, business partner and friend Eric Fisher. The last supper included native trailing blackberries and local black cod, sourced from longtime providers whom Dillon also counts as friends; oysters came from Vashon Island.
“I take full responsibility,” he said of Sitka’s closure. But he also mentioned “the people that just don’t care.” He spoke of Sitka’s beginnings, and of the community it has been a part of and fostered. When it came to what’s happening in the city now, Dillon did not wax nostalgic. “[Expletive] those suits,” he said.