Game of forks: New empire builders transform Sacramento’s dining scene

A smartly dressed Randy Paragary mills about his namesake restaurant for its swanky, buzzing preview party. Platters of hors d’oeuvre circle: beef tartare, crab beignets, chicken liver mousse, chocolate macarons.

The crowd? Young businesspeople, trendy socialites and the occasional industry player paying respect to the godfather. After all, Paragary had been the one and only food emperor of Sacramento for years. He owns and operates 13 restaurants and bars—including his eponymous Midtown restaurant—and is a behind-the-scenes partner in several other Sacramento spots.

That’s no easy feat—the restaurant business is notoriously risky and expensive. Urban legend goes that 90 percent of restaurants close in their first year. Despite that hyperbolic-but-still-frightening figure, a group of young entrepreneurs has emerged in the past few years—and they’re transforming the city’s dining landscape. It’s earning Sacramento shoutouts in national publications—it’s made the central city’s restaurant scene one to seriously watch.

And it’s all happened so quickly. Just look at Broderick Roadhouse’s Chris Jarosz. In less than four years, he went from owning one food truck to four restaurants—soon to be six—with a licensing deal in the works. He says he works 14 hours a day, seven days a week.

“There’s always a million things going on, but I feel like I can never get enough of it,” Jarosz said.

Another prime example: the owners of perennial favorite cocktail haunt Shady Lady Saloon—Jason Boggs, Alex Origoni and Garrett Van Vleck—are gearing up to transform what was once a one-restaurant operation in 2009 into a seven-part empire by the end of the year. Then there’s Kimio Bazett and Jon Modrow, of the Golden Bear and Hook & Ladder Manufacturing Co., with two hotly anticipated launches later this year.

These guys—and yes, these downtown empire-builders are all men right now—are taking big financial risks to make their mark on Sacramento. But as their empires grow, will Sacramento lose the culinary diversity that makes going out so fun?

Jarosz was broke when he launched his Wicked ’Wich food truck in 2011. The Pennsylvania native had bounced all over the country, dabbling in the corporate world, photography, hairdressing, nightclubs and, yes, restaurants and bars before landing in Sacramento. Seeking a stable paycheck to support his family, he went into real estate. Then the market crashed.

Urged to finally follow his passion for food, Jarosz managed to get a truck with the help of a friend, but he didn’t actually have enough money to buy ingredients for those East Coast-style sandwiches he wanted to sell on the truck.

“I basically wrote a check to some suppliers and then just started driving, hoping I could make enough money that day to cover the check,” he said. “It was definitely a sketchy couple of years.”

But popularity grew and created restaurant opportunities, and those opportunities created more opportunities. The first Broderick Roadhouse opened in 2012; another is expected in Midtown later this summer; and next month, his new concepts Saddle Rock and Localis will replace Capital Dime and Trick Pony, respectively.

Jarosz’s tale is a little unorthodox. His whole approach is a little unorthodox.

“If it was just about money, we’d sit back on every deal and really analyze it and make sure it’s a productive, profitable venture,” he said. “But a lot of times, it’s just like, ’I know we can make this work. It’s awesome. Let’s do it.’”

The Shady Lady guys have been far more careful with their empire expansion. They opened Shady Lady in 2009; Brewsters Bar & Grill in Galt in 2011, which they sold about a year later; and Field House American Sports Pub in 2014. Soon, their makeover of the old Monte Carlo Club, B-Side, will open. Amaro Italian Bistro & Bar and Sail Inn Grotto & Bar in West Sacramento should both open by the end of the year. They’re also partners in LowBrau; Van Vleck is a silent partner in Bottle & Barlow, the upcoming bar-slash-barber shop on R Street.

“It is a lot,” Van Vleck admitted. “[Expanding] completely depends on the opportunity presented. We’ve turned down tons of things, but some are too good to pass up.”

It just so happens that a lot of too-good opportunities popped up in a short period of time.

The Wong family approaches business a little differently—steadily. Mason Wong and his brothers tend to open a new concept roughly every three years. Their next restaurant, Iron Horse Tavern on R Street, holds its grand opening on Sunday, June 14.

“We get to a point where we’re really busy for a year or two, and once we get that project running relatively smoothly, the itch comes back,” Wong said. “It’ll be at least two years until we think about doing something else.”

Wong isn’t exactly part of this new generation of restaurateurs—his family opened its first place, a Luau Gardens in the Arden area, in 1976—but his presence in Sacramento’s urban core only dates back to 2005 with the now-shuttered fine dining restaurant Mason’s. And Wong’s downtown empire has grown to six establishments, including Cafeteria 15L and Firestone Public House.

The basic steps, according to Wong: find a niche, pick a great location, do a cool build-out, provide excellent service and food. Simple enough?

“The longer you’re in it, the more you learn, the better you get at it,” he said.

Boggs agreed that running the restaurants got easier over time—knowing how to do profit and loss statements, getting projections together, developing relationships with contractors.

And once you know how to do all that, why not do more? That’s Bazett’s motto. In addition to co-owning Bottle & Barlow, he’s helping out with Kru’s move to the former Andiamo site.

“If you’ve had success once or twice, it’s enough of an impetus to keep going,” Bazett said. “You do what you know.”

That drive is painting an exciting, rapidly changing restaurant scene. But it also means many of Sacramento’s hottest restaurants are owned by the same, small group of people. As they add more and more concepts to their rosters, will our favorite dining destinations start feeling the same? Is this the start of the homogenization of the local dining scene?

“Even having a designer in common, these places all feel different,” Bazett argued, pointing out that interior designer Whitney Johnson worked on Hook & Ladder, LowBrau, Shady Lady, Bottle & Barlow and others.

Other restaurateurs agreed.

“I have a lot of fears in this business,” Van Vleck said. “That’s not one of them.”

Van Vleck’s fears have more to do with those profit and loss statements.

That said, the urban legend that 90 percent of restaurants close within their first year isn’t close to being true—at least here in Sacramento. Valerie Mamone-Werder, senior manager of business development at the Downtown Sacramento Partnership, has been tracking restaurant openings and closures downtown since 2011 and found that roughly 27 percent of new restaurants couldn’t last that time-frame. Success is clearly possible, but it’s also definitely tough.

“I owned a [retail] business—running a business is very hard. I think running a restaurant is 10 times harder,” Mamone-Werder said. “You’re talking about food costs and payroll and tons of employees—people who are showing up or not showing up. I think there’s a lot they try to keep in their control, but I think there’s a lot out of their control.”

Not to mention a flood of other costs: insurance, licensing, advertising, rent, utilities, repairs and so forth. And that’s just maintenance. Want to open a restaurant in Sacramento today? Finding a space that’s restaurant-ready is challenging enough.

According to broker Aaron Marchand of Turton Commercial Real Estate, making a restaurant out of a warehouse, office or some other building that wasn’t already a restaurant would probably cost $100 to $150 per square foot.

“If there’s no hood, grease trap—and you have to deal with zoning, code enforcement—these costs add up significantly,” he said. “A first-generation restaurant is so expensive that you almost never see it.”

It’s a different story, though, if a restaurateur signs on with a brand new development—like Wong’s Iron Horse Tavern at R and 15th streets. In that case, the restaurateur gets some say in the build without having to pay for all of it.

For a second-generation restaurant, Marchand starts the bidding at $50 per square foot for basic retrofitting. For a reference, LowBrau is 3,700 square feet and Hook & Ladder is 4,800 square feet—both were second-generation restaurants with facelifts. But what might seem like a minor redesign can add up, too.

“It depends,” Marchand said. “Is it the whole experience—spending tens of thousands on tables and furnishings—or are you just about the food?”

So where does a random person with a cool idea get more than $100,000 to open that dream restaurant?

Grandma, sometimes.

“Most startup restaurateurs are tapping into their friends, family and community,” said Clay Nutting, co-owner of LowBrau, Block Butcher Bar and the Barn project scheduled to open next year in West Sacramento. “I think restaurants have a reputation for being hit or miss so that makes fundraising a challenge.”

Nutting and his business partner Michael Hargis didn’t have any money when they wanted to open LowBrau—and they still call themselves “starving artists.”

“There would be times we were out actively fundraising for LowBrau where we were both pulling lint out of our pockets, trying to figure out how to pay for the coffee or happy hour cocktail for the person we were trying to woo,” Nutting said. Despite the lint, they eventually found investors and partners, like the Shady Lady guys.

Nutting and Hargis hope to build up their credit to eventually take out traditional Small Business Administration loans—that’s how Bazett funded Hook & Ladder and Bottle & Barlow. It was good old-fashioned relationships with a couple of small banks.

“Your business credit is a lot like your personal credit: it’s your history, your name, your reputation,” Bazett said. “Money for restaurants isn’t dead, it’s just not everywhere.”

But those loans aren’t always ideal, either. Wong prefers to save and self-finance, since a loan could mean putting up your home as collateral, he said.

“A lot of times a bank is really skeptical of making a restaurant a loan because people think less than 10 percent of the [restaurant industry] actually survives,” he said. “I think it just goes to show you that a lot of people try to open a restaurant that don’t really get what it takes to open a restaurant.”

But if you want to make a decent living, you need to start expanding after that initial hurdle, according to Bazett.

“Profit margins are notoriously slim—if you’re doing 10 percent, you’re doing really well,” he said. “It’s hard with just one restaurant; there’s so much overhead.”

Now, Jarosz wants to treat his business like a business. His empire has been mostly self-financed at this point—with plenty of early debt—and he’s actively seeking out new investors. He’s also hammering out the details on a licensing deal with a Bay Area group that could open as many as a dozen Brodericks. “We might be able to actually make some money,” Jarosz said, laughing.

Jarosz firmly states that he wants 100 percent control over the brand, even though day-to-day operations would generally be out of his control. Other local restaurateurs are less interested in creating multiple outposts of the same concept. Nutting said he could have opened 10 different LowBraus by now—and another LowBrau is still “definitely on the table”—but none have been the right fit. The Shady Lady team has similarly rejected many offers as far as Long Beach—the guys want to focus on Sacramento’s urban core.

“Once you start moving out to places you don’t really know, you’re just plopping something down and hoping it’ll work,” Boggs said.

Wong has a Cafeteria 15L in the airport—and he’s adding an Iron Horse Tavern as well—but he doesn’t imagine opening restaurants any further away, say in Roseville or Folsom.

“It gets back to how much time you want to spend working,” he said. “You could hire good managers but you still have to work with your managers. How much do you think you can handle, and still do it well?”

Then there’s the matter of a stagnant restaurant. How do you save it? Wong argues you don’t—you start over with a new design, a new menu and a new brand. For Kru’s chef-owner Billy Ngo, it’s all part of the game. Despite critical acclaim, his Asian fusion restaurant Red Lotus barely lasted a year-and-a-half, closing in 2011. He sold off his Pork Belly Grub Shack in Natomas because it was too far to manage well, he said.

“One success, one closed, one sold,” he recounted, as he gets ready to relocate Kru, place a new concept in that spot and open Fish Face on R Street any day now. “Of course it’s scary. I think to be a restaurateur, you have to be a gambler at heart.”

What’s fueling Sacramento’s restaurant boom? Theories abound.

The Shady Lady team points to a bunch of factors all culminating at the same time: Sacramento simply needing new, cool stuff; their generation of now-30-somethings coming into their own; people wanting to live downtown instead of in the suburbs.

And unlike San Francisco, Sacramento is a place where you can afford to be a young, risk-taking—not-tech—entrepreneur. Now we see those who fled Sacramento return, like Michael Thiemann, who left Tyler Florence’s Wayfare Tavern to open up Mother in 2013.

“In the ’90s, you saw talent leaving town,” Boggs said. “If you wanted to make your mark in the culinary world, you had to leave Sacramento. Now I think we’re over that hump.”

For Jarosz, it’s being in the right place at the right time.

“More people are moving into the market, and the people here are realizing what type of region we live in,” he said. “The farm-to-fork movement hasn’t necessarily been a catalyst for us to want to do more, but it’s helped the general populace want to help support this movement.”

Chefs are also just rock stars now—the popularity of restaurants is a product of the times.

“This industry is one of the only things the Internet can’t provide,” Van Vleck said. “Going out and eating and drinking and being social is one of the few experiences you can’t get digitally.”

It’s also where the city’s creatives are channeling their energy, Nutting argues.

“People lament the local art scene—’People aren’t buying art, they’re just going to bars and restaurants’—I say that is where art is happening,” he said.

And these creatives are fueling each other—it’s a tight circle.

“We’re all homies,” Boggs said. “That’s one of the main reasons why the Sacramento restaurant scene is different from other cities. We don’t really look at each other as competition—well, friendly competition—but we’re just trying to get the overall scene better.”

But are these empire builders making it harder for newcomers to carve out their own niches? Is the market for trendy cocktail bars and rustic farm-to-fork restaurants oversaturated?

Mamone-Werder argues no, that anyone can put a unique spin on any subgenre and find an eager audience. But she is fearful of a different kind of saturation.

“It’s when we start to only look at putting restaurants and food concepts downtown. It’s when we start to be so myopic that we don’t realize to really balance out what we have here, we have to have retail,” she said.

“We’re a victim of our own success at this point. We want people to come downtown, eat, shop, eat again, shop, then go home. Right now, they’re just coming in and eating.”

It’s a worry for Van Vleck too, though not as much as population density.

“The restaurant industry is outpacing the population here, and it’s great to see [16] Powerhouse and [the Warehouse Artist Lofts] open, and I know there are going to be more things, but I just hope it comes through fast enough,” he said.

And sure, people hope that the arena will ramp up the number of people moving downtown. But Jarosz worries the arena will actually hurt the restaurant scene, as he witnessed in Denver when Coors Field opened in 1995.

“Something like 50 restaurants opened right at the beginning. Two years later, 20 restaurants were still standing,” he said. “I think everyone feels that because there’s an influx of growth, there’s going to be an influx of business. But what we found was if there was a game going on, the traffic got really bad and people were like, ’Maybe I don’t really wanna go out tonight.’”

The arena and the surrounding restaurant spaces are mostly attracting interest from restaurateurs outside of Sacramento, according to Mamone-Werder. But that doesn’t mean these empire builders don’t want to take the bet—the Shady Lady team, Ngo and Bazett are all hoping to put concepts near the arena.

So who is the next Paragary? That may not be an appropriate question.

“It’s a different era,” said Boggs, who worked for Paragary for 12 years. “Randy is always going to be Randy. He’s always going to be the godfather.”

For one thing, Paragary owns a ton of buildings in prime locations—these young restaurateurs were born too late to take advantage of Sacramento’s once dirt-cheap real estate. Furthermore, there was no one else trying to build an empire when Paragary got his start.

As Boggs said: “Everyone worked for Paragary.”

As for Paragary, the veteran says he’s fully aware that he’s bred his new competition.

“I’m really proud of that,” Paragary said. “I like to see them succeed and start their own businesses.”

Regardless, restaurateurs agree that there will never be another Paragary.

“He is unmatched in his ability to build restaurants, community, business,” Nutting said. “But all of us can be our best selves, and that’s what I hope Sacramento is known for.”