Japanese fusion restaurant Raku shut its doors in downtown San Luis Obispo on Dec. 31, after only two years at its location — making it the second business in that spot to close in the past three years.
Owner Tony Park says the reason is simple: Rent was too high.
“As a small, local mom-and-pop business owner, it was just too much,” said Park, who was paying about $10,000 a month for the 4,500 square foot space — about $2.22/square foot.
Rent for a retrofitted downtown spaces ranges between $2 and $3.50 per square foot a month, according to the San Luis Obispo Chamber of Commerce fact sheet on real estate.
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Previous occupant Lori Miller — who owned and operated Muzio’s Grocery & Deli in the same location in the Wineman Building until April 2011 — also cited high rent as her reason for closing.
“My accountant says everything is in line — it's just the rent that's out of line " she said in an April 2011 article in The Tribune.
The lease holder for the Wineman Building, Ali Vahdani of the VGI Group in Vernon, Calif., could not be reached for comment.
Mark Anderson of Anderson Commercial Real Estate, which is marketing the vacant space, said there are no new tenants lined up at this time.
Other factors contributed to Raku’s closure as well, Park said.
Between a selective (but sometimes money-strapped) college-student clientele and stiff competition between downtown restaurants, Park said he just was not prepared for the struggles his restaurant would face.
“When I had my restaurant in Grover Beach, all I wanted to do was open a restaurant downtown,” Park said. (He owned sushi restaurant Izakaya Raku before opening Raku.) “And the first six months — they were great. Sales were $160,000 a month.”
But in the end, the story was the same: sales lagged for the better part of a year-and-a-half, and combined with the rent, Park said he was forced to declare bankruptcy.
“(Downtown) is just a small pie that everyone wants a piece of,” Park said. “And it’s just getting smaller.”
Now, Park said he is pursuing other interests, though he declined to disclose them. He has no plans to go back into the San Luis Obispo city market again.
“San Luis Obispo will lose its charm,” he predicted. “As mom-and-pop stores go, and big franchises come in, it will lose its charm, and people will realize it’s not the town it’s cracked up to be.”