‘Scarier than COVID’: Wharf collapse cost nearby restaurants hundreds of thousands of dollars

Moments after a 150-foot section of Santa Cruz Municipal Wharf collapsed into Monterey Bay on Dec. 23, diners and workers fled its restaurants for the mainland, abandoning seafood lunches and cocktails on the table, and the bills unpaid. 

It fully reopened 12 days later on Jan. 4, but now wharf restaurants say they are facing a new disaster: a financial loss of hundreds of thousands of dollars by losing the vital winter holiday rush. 

“That week between Christmas and New Years is one of our biggest weeks,” said Cindy Pawlak, who co-owns Stagnaro Brothers restaurant and seafood market with five family members. “It’s really the boost that gets us through January, February and March, which are pretty slow, until we can get to summer when it’s really great again. We lost all that in December.” 

Stagnaro Brothers restaurant lost more than $200,000 due to the wharf collapse, Pawlak estimated. Other restaurants on the wharf also sustained losses north of $150,000. The closure put enormous strain on wharf restaurants that were already struggling after years of the pandemic and its aftermath and increases in labor and material costs, restaurant owners said. 

“It’s going to take a while to recover,” said Mark Gilbert, owner of Firefish Grill and Woodies Café on the wharf. “Right now we’re having to grovel just to keep it open.” Gilbert said he hoped to regain financial stability by spring break in late March. 

Between Firefish and Woodies, Gilbert lost more than $170,000 due to the closure over the holiday week, including $20,000 worth of food that spoiled after the employees evacuated. “We basically turned the [stove] fire off and got out. We came in a couple days later and there were still mai tais on the table,” said Gilbert. 

It’s normal for his restaurants to operate at a loss in December, but only by about $20,000 to $30,000, he said. It might sound bad to lose money during a busy month, but it’s not an unusual situation for wharf restaurants, which make the bulk of their income for the year between May and September, Gilbert said. Revenue over the holidays is still vital to help make ends meet during the slow winter months. 

Gilbert said he continued to pay all of his employees who did not go on unemployment while the restaurants were closed. As a result, he was able to retain all of his staff members.

Unlike the rest of the restaurants on the wharf, Stagnaro hit another snag as soon as the wharf reopened. The restaurant is at the end of the wharf, the closest building to the damaged area. A barricade placed by the city a few doors down from the restaurant prevented cars from parking in front of Stagnaro, as well as neighboring businesses Marini’s Candies and gift shop Santa Cruz Bay Company. The area was open to foot traffic, but the barricade deterred people from entering the area, Pawlak said.

“Either they don’t know that we’re open, or they don’t want to walk down,” Pawlak said the day before the barricade was finally removed. “It’s dark and it’s cold, and I don’t think that they want to walk down there. So it’s been pretty quiet.”

Business was so slow that Stagnaro Bros. had to shorten its hours, opening a half-hour later, at noon instead of 11:30 a.m., and closing an hour earlier, at 7 p.m. instead of 8. Ten of its 75 employees quit because they didn’t have enough hours, Pawlak said. In an effort to get the word out that the restaurant is open, the business purchased large signs, posted to social media and bought local advertising. 

The barricade was removed last Saturday, and since then customer flow has returned to normal. But the closure’s impact had made a substantial mark in the 88-year-old restaurant’s history. 

“This is scarier than COVID,” said Scott McPherson, Pawlak’s brother and fellow co-owner. Their grandfather, Giovanni Stagnaro, founded the restaurant in 1937. “Like, are we going to be here in a month? And we’ve never, ever felt that way. I’ve never felt like we might not have a job, or we wouldn’t have a business.” 

Stagnaro’s seafood market also took a hit. The day that the end of the wharf collapsed, the market, located at the front of the restaurant, was stocked with pre-ordered Dungeness crab ready to be picked up for holiday feasts. But after the area was evacuated and closed, the business lost many of the orders because people were unsure how or whether they could pick up their crab. 

“We have the phone numbers and tried to call as many people as we could. But I think a lot of people saw that the wharf collapsed, and they probably felt that we couldn’t get our orders,” McPherson said. The people that they were able to reach were able to pick up their crab at Stagnaro’s wholesale distribution center on Washington Street in downtown Santa Cruz. 

At nearby restaurants, it’s business as usual, servers said. Managers at the two restaurants closest to Stangaro Brothers, Makai Island Kitchen & Groggery and Olitas Cantina & Grille, said that while the closure was tough, the number of visitors seems to have returned to normal. 

“This time of year is always slow, but it’s comparable to a normal January now,” said Connor Iles, a manager at Olitas. 

Makai manager Shannon Croft was surprised at how busy the restaurant has been since it reopened. “I’d say it’s almost busier than a normal January,” Croft said, and added that many of Makai’s regulars have returned to support the restaurant. 

For more than a week after it reopened, Makai’s Google listing marked it as “temporarily closed.” “Our host was constantly answering the phone to say that we were open,” said Croft. 

Makai’s Google listing says it’s open, but the listings for Stagnaro Brothers, Riva Fish House and Firefish Grill, as well as several wharf retail shops, are still marked as “temporarily closed,” which Pawlak and McPherson fear could deter traffic even further. 

“We just want people to know that we’re open,” said McPherson. “We want a chance to make it through the winter like everybody else.” 

The collapse and subsequent closure are the latest events to strike the wharf, but the area has been struggling for almost a decade, said Gilbert of Firefish and Woodies. “The wharf’s in big trouble, and it has been declining since labor costs began going up in 2018. The city of Santa Cruz needs to pay attention to it,” he said. 

Gilbert has noticed fewer people visiting the wharf starting before the pandemic. And despite raising menu prices, the gross income at his restaurants has been the same for the past six years – around $30 million annually. That’s a bad sign, he said. 

“That’s flatlining. You keep making the same amount of money, but you’re serving less people,” he said. He thinks the city should update the wharf with better infrastructure and fresh attractions to entice new and annual visitors. 

“People want to see new stuff, and we haven’t provided it to them. Not taking care of the wharf means that you’ll lose part of the wharf,” said Gilbert. “If we had a new restaurant out there it would have been fine, because there would have been new pilings and new construction.”

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