The Old City Hall is not cursed. The restaurant business is just
tough, and raucous eateries don’t belong in downtown Gilroy.
The Old City Hall is not cursed. The restaurant business is just tough, and raucous eateries don’t belong in downtown Gilroy.
This is how city officials have responded to the news that Chips N’ Salsa might be going under like so many tenants before at the regal building on the corner of Sixth and Monterey streets.
Jim Angelopoulos said his Mexican restaurant no longer runs regular dinner hours seven days a week. It only hosts banquets for private or semi-private events up to 180 people.
The reason for the downgrade? Angelopoulos said it boils down to paltry downtown patronage and a strict city policy against eateries that turn into alcohol-fueled dance halls.
By law, Chips N’ Salsa can serve alcohol and host dancing as long as its kitchen remains open.
“Unfortunately with the way it is downtown, a restaurant on its own cannot survive,” Angelopoulos said. “We have no choice but to do banquets right now until we figure out how to get profitable.”
Angelopoulos tried to hold karoake or dance nights, but his late-night crowds irked nearby residents to the point that police were called to tamper the camaraderie.
“Every weekend is the same thing – complaints left and right,” said Bernie Wilder in July.
Wilder is the manager of the Milias Apartments, which lies caddy corner to the restaurant, and over the summer he said eight or nine residents complained on a regular basis each week.
“I just think they ought to have something to do with the noise there. The music is so loud it vibrates up into my building. We don’t need that,” Wilder said. “Our tenants can’t sleep at night. Sometimes we’re up at night until 1 or 2 in the morning. Two weeks ago, there was a big fight out there and there were six or seven cop cars out there at once.”
Angelopoulos likened the police attention to “harassment,” though, and said the city has not helped his business at all.
“It’s pretty simple – there are no people going downtown, so unless the city would like to work with us, I think they’ve worked against us,” Angelopoulos said.
But city officials said the police response was appropriate and reflected the city’s efforts in recent years to prevent new bars and nightclubs from cropping up downtown.
Mayor Al Pinheiro, who has worked to revitalize downtown, said Angelopoulos has a skewed perception.
“To blame the city I think is completely unacceptable,” Pinheiro said. “I believe this city has been pro-active in providing businesses to move downtown and flourish. Now all we can do is what we’re doing.”
In 2005, officials codified a temporary moratorium on alcohol-oriented businesses in the downtown historic core, though they allowed dance halls in other outlying areas by special permit. Happy Dog Pizza, for instance, lies just outside the boundary of the historic core, in an area known as the downtown “expansion district.” The area, whose boundary is marked by an alley a half block from Monterey Street, is allowed to have dance halls and alcohol sales even in the absence of a food operation. The same law applies for the downtown “gateway district” that serves as home to Tenampa Restaurant and Nightclub.
For these reasons, Chips N’ Salsa walked a thin line when it sold alcohol to loud, late-night crowds of customers.
Despite its particular troubles, City Administrator Jay Baksa said restaurants historically have struggled in the 1905 Baroque- and Mission Revival-style building.
City Council Candidate Bob Dillon admitted the restaurant business is tough, but recalled one successful restaurant at the Old City Hall that went under with the 1989 Loma Prieta Earthquake.
“I think it’s an appropriate venue for a restaurant,” he said, “but I also think they have to obey the rules.”
It remains the case, though, that the most profitable tenants at the site sold more than food and worked together, not alone, according to Baksa.
“The (businesses) that actually worked were when there was a multiple use of that structure by Gavilan College,” said Baksa, referring to the school’s $400,000 grant program that allowed small businesses to pay discounted rent at the old building.
The grant helped launch The Wild Rose House of Taste restaurant, Gallery of Flowers floral shop and a tamale business, but it expired in October 2002.
“When the grant ended, we went back to restaurant businesses,” Baksa said.
The lease with Chips N’ Salsa runs out in June 2008, when the city council will decide what to do with the building. The city council has discussed moving the museum at Church and Fifth streets to the Old City Hall and turning the current museum building into a rentable site of some sort.
Angelopoulos might force the council to decide early, though, since there is an advertisement for his lease space on CraigsList.com for $275,000. Angelopoulos could not be reached for comment on the ad.
Before Chips N’ Salsa opened in 2005, Glen Gurries ran a restaurant and neglected payments for several months before closing at the end of 2004. Gurries sold the remainder of his lease to Angelopoulos and has since been sued for bankruptcy.
Angelopoulos, on the other hand, has a successful track record in the restaurant business elsewhere.
He also owns Scramble’z, a retro family diner that opened in Morgan Hill in July 2004. It pulls in about 4,000 customers a week. Prior to opening Scramble’z, the Angelopoulos family operated the City Diner in San Jose for 25 years.
“We hope in the future (the city) works with us to have some form of entertainment downtown,” Angelopoulos said. “San Jose does it … I don’t understand what’s wrong with entertainment. Why does downtown Gilroy take it away?”
If he is elected next month, city council candidate Perry Woodward said he preferred to keep leasing the building to private sector businesses even though he “can’t wait” for the Chips N’ Salsa signage to come down off the “most historical building in town.”
Since the restaurant opened, some residents have complained about the sign’s bright colors.
The right business just has not come along, said Woodward.
Councilman Craig Gartman is challenging Mayor Al Pinheiro for the mayor’s seat, and Planning Commissioners Tim Day and Cat Tucker, Dillon, Woodward and incumbents Roland Velasco and Russ Valiquette are running for the three available council seats.
“I think we should put it on the market and see who wants to pay the rent rather than trying to dictate what type of business goes in there,” Woodward said. “We’re going to have to go back to the drawing board and find a business model that makes sense with that.”
