When restaurateur Arsalun Tafazoli began working almost three years ago on what would be his most ambitious dining project yet, he anticipated a budget of $2.5 million and a June 2016 opening.
What he couldn’t have foreseen was a budget that eventually ballooned to $6.5 million, forcing Tafazoli to sell one of his company’s downtown restaurant and bar venues, Fairweather and Rare Form - both of which remain open, but under new ownership.
Unexpected hurdles emerged at almost every turn, not the least of which were new airport flight safety rules that threatened to kill the entire project. Add to that the challenge of transforming an old photo supply store with rooftop parking into a two-level, 10,000-square-foot restaurant, and it’s no surprise the bills kept mounting.
Now more than a year after its scheduled opening, Born & Raised, a glamorous, wood- and marble-embellished steakhouse in the heart of Little Italy, formally opens Wednesday. And true to its much anticipated debut, reservations are already booked through the end of September.
As pleased as Tafazoli is with the enthusiastic reception, he remains anxious about the upscale restaurant’s staying power, especially in light of the unexpectedly huge investment in a building his company does not even own.
“On every level, we encountered the worst-case scenario,” said Tafazoli, co-founder of CH Projects, which operates nearly a dozen venues, including Ironside Fish & Oyster, and Craft & Commerce, also in Little Italy. “Frankly, we operate more on gut and emotion and with a project of this magnitude, we probably should have done a little more due diligence.
“Right now, this is definitely pushing us to our brink. Had I known everything I know now I’m not sure I would have done this. But six months, a year from now I’m hoping I’ll be glad I was just the right amount of stupid at the right time.”
Designed as a throwback to the swanky steakhouses of the mid-20th century and earlier when tableside service was de rigueur, Born & Raised occupies the former Nelson Photo at India and Fir streets, since relocated to Point Loma.
Dressed with brass inlays, Italian marble and an abundance of rich walnut - down to fanciful columns that resemble blossoming flowers - the restaurant’s lower and upper levels will seat up to 250. That’s more than three times the maximum capacity the San Diego Regional Airport Authority had at one time dictated for the redeveloped space.
Tafazoli ultimately was able to persuade the San Diego City Council last year to set aside the Airport Authority ruling that was rooted in revised safety regulations intended to diminish human activity in neighborhoods under the flight path in the event of a crash.
By the time CH Projects won the City Council OK, the tally for the delay and costs associated with the fight reached $200,000, Tafazoli said.
Structural challenges, plus the meticulous design of the project, including high-end materials and custom-made pieces overseen by Tafazoli’s go-to designer Paul Basile, also contributed to soaring costs.
“Nearly every item - from the flooring to the staircase to the ceiling and everything in between - was crafted by our team, so the coordination of the installation had to be precise,” Basile said. “The biggest structural challenge was converting the original single story to a two- story. Because the original rooftop was used as a parking lot for 10 or so cars, we thought the second-story expansion would be a relatively easy build. But retrofitting the building presented huge challenges.”
Add another $500,000 to the rapidly rising tab.
In addition to the dramatic design details, CH Projects hopes to wow guests with tableside preparations, from Caesar salad and Shrimp Louie to Steak Diane, and a roaming dessert cart that will allow diners to choose from among a rotating selection of confections.
The culinary centerpiece, though, will be a 40-square-foot, glass-enclosed room for dry-aging beef - up 1,000 pounds at any one time.
The genesis of Born & Raised was an expiring lease of longtime tenant Nelson Photo, ensconced for more than six decades in a neighborhood that increasingly had become a magnet for some of the city’s most buzz-worthy restaurants and star chefs.
Third-generation family owners of the site soon were fielding inquiries from restaurateurs for a spot that could command significantly higher rent, said Dino Cresci, who oversees the property owned by three members of his family.
“We as a family picked Arsalun. His restaurants are wonderful and we’re very fortunate we picked him,” said Cresci, whose Italian-born grandparents bought the India Street lot in the 1920s. Thirty years later, his widowed grandmother developed the building that would house the photo supply store. Before that, it housed a drugstore and soda fountain that came to be the gathering spot for young people in the Italian neighborhood
Even if Tafazoli had wanted to purchase the building, it was never an option.
“We constantly have people wanting to buy it,” said Cresci, whose sister owns the property with two other family members. “We don’t ever want to sell it, it’s been in our family for all these generations. The one thing we asked of Arsalun was that dedication plaque for my mother and father go back on the building. It tells their story of Little Italy.”
Not surprisingly, the tab will be high at meat-centric Born & Raised, with prices for dry-aged cuts of beef topping out at $87 for a 22-ounce bone-in New York steak.
While upscale restaurants like Tafazoli’s account for just 1 percent of restaurant industry traffic, the fine dining segment has been a standout in recent years, posting decent growth compared to the industry as a whole.
Although fine dining traffic turned negative in 2016, it regained momentum over the last 12 months, posting a gain of 1 percent through June, according to NPD, a market research firm. That compares to a 1 percent decline for all restaurants.
“It’s a battle for market share, and the only way to grow your business is building brand royalty and repeat business,” said NPD restaurant analyst Bonnie Riggs. “If you’re a fine dining establishment and you give consumers a compelling reason to visit your concept and they feel it’s worth it they will come.
“The San Diego market has been doing relatively well. They’ve not been closing as many units compared to other major metro areas so that speaks to demand.”
Tafazoli said he understands the risks but at the same time has also seen his more upscale venues thrive, which give him a measure of confidence.
“There is always a better market for things like Chipotle because of the price point,” he said. “But with us, you have to invest your time and it’s more expensive. Still, this is a whole new model and we haven’t gone this far before.”