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The Grove to close in Hayes Valley after all, citing missing stimulus checks

Photos: Sebastian L./Hoodline Tipline
By Teresa Hammerl - Published on May 01, 2020.

Recently, an "available for lease" sign popped up on the Hayes Valley location of comfort-food eatery The Grove (301 Hayes St.)

At the time, the restaurant's executive vice president, Steve Ring, said that the company was trying "to test the waters of the market by posting the signage ... as of now, we are planning to reopen."

But in just the space of a few days, things have changed. Via email, the Grove's owners, Kenneth Zankel and Anna Veyna Zankel, told Hoodline that they now plan to close the location. 

Two days ago, the Zankels said, they learned that Bank of America (BofA) had not yet submitted their Paycheck Protection Program (PPP) loan application for the Hayes Valley location Small Business Administration (SBA). That's despite the fact that the application was completed nearly a month ago, on April 4, they say. 

With weeks of waiting for the loan behind them, the business couldn't survive another weeks-long wait after the application was actually submitted, the Zankels said.

"The clincher was BofA," they wrote. "We could not continue to live with the uncertainty and pressure."

They'd already had a phone conversation with their Hayes Street landlord, and decided to list the space "so that if we decided ultimately not to stay, there would hopefully be others already interested," they wrote. It will now remain on the market. 

In their email, the Zankels were exceptionally transparent about their restaurants' finances.

They said that they lost $210,000 in March alone across their four Grove locations — Hayes Valley, Pacific Heights, SoMa and in the Design District. Business in Hayes Valley, specifically, declined as soon as the SF Symphony and other performance venues closed. 

None of the Grove's restaurants has gotten a PPP loan so far, even though their applications were also submitted in early April. The Zankels say they've received a $10,000 Economic Injury Disaster Loan (EIDL) from the SBA for each restaurant – but that's just a drop in the bucket.

The couple says the four restaurants' basic monthly expenses — rent, CAMs, insurance and utilities — run almost $100,000. And with 170 employees across the restaurant's four locations, the payroll bill for the first two weeks of March comes to $240,000. 

It's still somewhat unclear if the Grove's three remaining PPP loan applications have been submitted by Bank of America. Despite multiple calls and emails, the pair have received conflicting reports.

"If we again miss out due to this and the SBA fund again runs out, this would make it significantly more difficult to reopen these other three restaurants and to hire back our staff, which is why the PPP was created in the first place," the Zankels wrote.

With the missing checks, other Grove locations are also facing an uncertain future.

The most vulnerable location, they say, is the one on Fillmore Street in Pacific Heights. With social distancing requirements, its indoor capacity would decline from 60 to 25 seats, and the lease is up in 18 months. Unless they can work out an agreement with the landlord, they say, they won't be able to afford their plan to renew it. 

"The landlord is a good guy we have a nice relationship with, and we are having an amicable conversation," they wrote. "We would like to re-open Fillmore and be there for another 20 years, if that can work for all involved."

The Grove's Pacific Heights location, on Fillmore Street, could be in jeopardy. | Photo: Andrew D./Yelp

The Design District location is currently expected to be the first to return. Starting around May 15, the Grove will relaunch takeout and delivery service exclusively from there, starting with an abbreviated menu and expanding into "family meals, weekend packages, some other ideas that we think our audience will love," the two owners wrote.

As for the SoMa location at 690 Mission St., Kenneth Zankel says that he's working to finalize some details with the landlord. A lack of business travelers, conventions and shoppers will be difficult to withstand, and while reopening is "not a sure thing," he said, "it's one I'd bet on."

"It is okay, because we think that location will be the slowest to come back — for us, Pizzeria Delfina, Oren's Hummus, everyone [in the building]," he said. But especially with Salesforce’s Dreamforce event canceled, this "could be a slog."

In the meantime, the Zankels say, they're giving away meals to employees once or twice a week, and helping them navigate the unemployment system as much as they can.

"It’s a surreal and terrifying shock to watch your life’s work crushed in the course of a week or two, as restaurateurs across the country did," the Zankels' email concludes. "We want our work-family back. Our regulars know a lot of their faces and stories far more than ours."

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