Does downtown SLO have too many restaurants?

Downtown San Luis Obispo has evolved into a foodie’s paradise, but we have to ask: Can so many restaurants survive?

It’s a topic that should at least be broached, following the closure of three restaurants in a single month: Thomas Hill Organic Kitchen in mid-December, Pluto’s on Dec. 18 and the downtown Splash Café on Dec. 31. (Two other Splash Cafés, one in SLO and the other in Pismo, remain open.)

Owners of the three businesses offered explanations: For the upscale Thomas Hill — which was open barely a year — ongoing construction in the area was a factor; for the downtown Splash Café, lack of revenue growth and steep rent were mentioned.

The owner of Pluto’s — which specialized in made-to-order salads and sandwiches — put it this way: “It really was just due to lack of business. We did pretty good, but not good enough.”

Disappointed customers chimed in with speculations: Lack of downtown parking was one, high rents another, and for Thomas Hill, the upstairs location was seen as a bummer.

But can we please talk about the elephant in the dining room? That would be the proliferation of restaurants in the downtown. We recently counted 60 eateries in the city core, ranging from pricey, high-end restaurants to fast-food chains where you can grab lunch for around 5 bucks. (We didn’t include juice bars, ice-cream, yogurt, coffee or smoothie shops — even though some of those stock a good selection of food items.)

On top of that, more restaurants are in the construction or planning stage.

That’s a lot of food in a limited amount of space. Yet there’s not much to be done about it; as SLO Mayor Heidi Harmon said, there’s no policy that allows the city to dictate the mix of businesses downtown.

We heard the same thing last year, when we pointed to the growing number of hair salons in downtown SLO.

Yet some cities have contemplated zoning restrictions to avoid having their downtowns overrun by certain types of businesses, such as national chains or “personal service businesses” like hair and nail salons.

The city of Pismo Beach is one. It recently passed a temporary moratorium on new personal service shops in its downtown. It defines those as “tattoo parlors, massage establishments, pawn shops, resale shops, smoke shops, check cashing stores/payday loan businesses, bail bonds businesses, gold and silver exchange stores, tire sales and repair, and blood/plasma sale centers.” (The city says hair and nail salons aren’t an issue in the downtown.)

Pismo Beach City Manager Jim Lewis says the city is taking “a breather” and is not seeking to outlaw certain types of businesses, but rather, to encourage a good mix of uses downtown.

“People want a retail and restaurant experience,” he said.

Agreed — and that’s not just for the sake of visitors.

A mix of uses is good for the financial health of cities that depend on sales tax revenue to pay salaries, pave streets and keep the lights on at City Hall.

That’s particularly true for San Luis Obispo; sales tax is consistently SLO’s single biggest revenue source.

And here’s the deal: While restaurants and hotels are big contributors — they were SLO’s third biggest source of sales tax in the first quarter of 2017 — they don’t bring in nearly as much as general consumer goods or auto sales.

Consumer goods have been the single most important source of sales tax revenue for the city for a long time, but lately, that income has been declining slightly — no surprise with the rise of online shopping.

While we’ve gained restaurants, we’ve lost some independent, locally owned retail shops and, with them, some of the charm and uniqueness of downtown.

We aren’t advocating a ban on new restaurants, but we do believe more should be done to encourage the addition of smaller, independent retailers — or at least to halt the exodus of those that remain.

Some ideas for city officials and downtown business owners and associations:

▪  Encourage experiences. Some of this is already happening. Downtown stores offer yoga lessons; cooking demonstrations; trunk shows featuring popular designers. More, please ... but not on Thursday nights, when parking is worse than ever. (Note to Save Our Downtown: How about bringing back flash mobs?)

▪  Encourage mixed use. We’re not talking about putting apartments on top of shops — though that’s a great use of space — but rather, mixing up what’s under one roof. One example: Takken’s not only sells new shoes, it fixes old ones, too. Another: Ambiance sells clothes and shoes, but also stocks goodies like flavored cotton candies and the ever-popular Brown Butter Cookies. (There’s that food thing again. ...)

▪  Encourage more pop-up businesses like the SLOcally Made shop that opened on Monterey Street for a week before Christmas . Empty stores are ideal for this — as long as the pop-ups are well promoted.

▪  Make it easier to subdivide large spaces into smaller ones, which would make downtown rents more reasonable.

▪  Parking, parking and more parking. Lack of parking is the most common complaint we hear from shoppers. In second place: The uneven sidewalks, which are especially hazardous for people with mobility issues.

Finally, if you do run into someone who is thinking of opening a new restaurant (or hair salon) in the downtown, you might want to have a heart-to-heart with them ... over lunch, maybe?

This story was originally published January 12, 2018 at 12:49 PM with the headline "Does downtown SLO have too many restaurants?."