The Hake, a well-regarded La Jolla restaurant that reopened two years ago following a $2.5 million makeover, has closed.
The upscale restaurant, which gained 2,000 additional square feet and an ocean view as a result of the ambitious overhaul, was never able to generate the level of added business that its owners had anticipated as a result of the remodel.
Rather than invest even more money to revive revenue, the ownership decided to close the dining room last week and sell the business, said co-owner Ricardo Dondisch. The owners had anticipated that the improvements would double sales, and while revenue did increase by about 40 percent, it wasn’t enough to sustain the business and recoup the renovation costs, Dondisch said.
In retrospect, the restaurant made the mistake of reinventing the Hake as a more upscale, refined dining experience, Dondisch explained. In the process, the 5,400-square-foot restaurant loss the frequent visits previously made by many of its regulars.
“When we had the old restaurant, it was more causal and people liked that a lot but when we remodeled we felt we had this new building and we needed to make it an experience, and our food became more complicated and service became more focused on fine dining,” he said. “While some people really liked it and it became a destination place, we lost that everyday customer.”
The restaurant also experienced some turnover among its chefs, and there were disagreements over the direction of the menu, which didn’t help, Dondisch acknowledged.
Located slightly below street level on Prospect Street, the seafood-centric restaurant opened in 2013 and was marketed as a global brasserie. Nearby are other popular ocean-front restaurants like George’s at the Cove and Eddie V’s Prime Seafood.
In early 2016 the Hake closed for what ended up being 10 months — longer than anticipated — to complete the renovation and expansion.
The majority owner is the Tintorera hospitality group, which also operates 21 restaurants in Mexico City, with three more to open in the coming months.
“So we came to a point where we had to decide, do we change the concept and name, which would require more money, or do we focus on the market where we’re growing,” Dondisch said.
Location Matters, a restaurant-focused brokerage, has been marketing the Hake restaurant space for the last three months and currently has an interested buyer, said broker Michael Spilky. All that is needed is approval by the landlord, he said. He could not divulge the prospective buyer but said it is a San Diego restaurateur with other locations.
“We had a decent amount of interest,” Spilky said. “The landlord is pretty particular and wants someone who will do a sizable amount of revenue. The location is great, it does have some challenges because it’s below the street, but having a view on Prospect is pretty rare, and the ones that do have a view are doing pretty well.”