Caffé Italia owners’ big dreams hang on city’s pending offer

Kevin and Shar Katz, owners of Caffé Italia, look over plans Tuesday for the improvements they hope to make to the former Denny's site on Chiles Road. The couple want to move their popular Richards Boulevard eatery to the site, which would be completely refurbished into a restaurant and bar with indoor/outdoor seating and room for meetings, conferences and special events. Sue Cockrell/Enterprise photo

It just feels right, Shar Katz said one recent morning, while surveying what soon may be the new home for the beloved family restaurant Caffé Italia, which she owns with her husband Kevin.

The building needs work — a lot of work. It might as well be torn down and reconstructed from scratch, Kevin said, if not for the fact that the original floor plan is pretty close to what they wanted.

The Katzes have spent the past year hunting for a new location for Caffé Italia, which opened nearly 30 years ago at 1121 Richards Blvd. They rent the building from the Patel family, who owns the adjacent University Park Inn & Suites.

Knowing their lease would expire in a few years, the Katzes started thinking about relocating and expanding their restaurant. They looked at several sites until they found the right one.

Sure, several restaurants have failed at 4120 Chiles Road, including the popular franchise diner Denny’s. The adjacent hotel, now a Days Inn, also changed hands a few times in recent years.

But the Katzes saw the potential. And they did their homework.

Three times as many people live in the neighborhoods near the South Davis site as live near their current location. And residents in that area are craving a sit-down, family-friendly restaurant, Kevin said.

People who drop off their cars for service at any of the nearby dealerships would be able to walk over for some food while they wait.

Local patrons — that’s one piece of the puzzle to Caffé Italia’s success.

Freeway frontage

Another piece is the customers who spot the restaurant from the freeway.

Windows at the front of the building give a clear view of Interstate 80. More than 300,000 cars travel the freeway each day, Kevin said.

The Katzes envision signs directing commuters off the freeway and to their restaurant for a comforting, sit-down meal. Those in a hurry might make a quick stop, stretch their legs and grab a snack from the deli — a convenience not available at the current location because space is limited.

The Katzes know from experience that freeway visibility is crucial because a big part of Caffé Italia’s customer base are commuters. Many have made a habit of stopping at the restaurant on Richards Boulevard, right off the Interstate 80, for a bite to eat midway to their destination, Kevin said.

Brews and cocktails also would be available at “The Brick Wall,” a cozy bar section of the Katzes’ dream restaurant. Shar’s personal recommendation is a limoncello made using her mother’s recipe.

The bigger and better Caffé Italia — at about 12,000 square feet — would accommodate the existing restaurant’s 130-person capacity, plus an additional 40 guests in a private dining area, 80 guests in a banquet room that can be reserved for events and 90 guests in the bar area. There also would be outdoor patio seating near the Days Inn pool.

The Katzes would hire about 40 new employees; they currently employ 60.

Inspired and excited about their new business venture, the couple last year began assembling an investment group and launched the purchasing process. They invested about $100,000 in the project in the past year.

Hotel in the works

But while the Katzes had big dreams, they weren’t the only ones.

In the spring, hotelier Ashok Patel announced his family’s plans to expand University Park Inn & Suites and transform it into an Embassy Suites. The $15.5 million expansion, which includes a rooftop restaurant, would mean an early termination of Caffé Italia’s lease.

The Katzes thought they 4 1/2 years — the time remaining on their lease — to plan their future. They envisioned “Caffé Comida,” a Mexican restaurant that would open at the Richards Boulevard location once Caffé Italia moved to Chiles Road.

Caffé Comida would occupy the building for the time left on the lease, while also gently redirecting longtime customers to Caffé Italia’s new location. It also would generate some revenue to help fund the investment in the new South Davis venture.

That was the plan. But that was before the Patels landed the deal with Embassy Suites and secured a $5 million redevelopment loan from the city.

To help soften the blow, the City Council last week offered to buy the Chiles Road property and lease it to Caffé Italia. The city would put a little money toward the rehabilitation of the site and the Katzes would pay the majority of the costs.

City staff will need to work out the actual dollar amounts and other contract terms with the Katzes, Community Development Administrator Katherine Hess said this week. Hess said the city is in the process of buying the property.

Following the purchase, the city has 90 days to determine if the project is feasible, including whether staff can arrive at a contract agreement with the Katzes, Hess said. If the project is not feasible, the city can back out of the purchase, she said.

Still optimistic

While things haven’t quite worked out as the Katzes envisioned, Shar said she still sees an opportunity where “everybody can be happy.”

“(The Patels) have a great property and they have every right to want to grow and expand, just like we want to grow and expand,” Shar said. And it makes sense for the city to want to capture hotel taxes, she said.

But the Katzes said they have concerns that cannot be addressed until they see the city’s offer. One major concern is whether they’ll be able to get the loans they need if the city owns the property.

Construction costs are estimated at $1.5 million.

“That’s a lot of spaghetti,” Shar said. Her calculation is 250,000 plates.

“We need real terms coming our way, so we can take a hard look at them and take them to the bank,” Shar said, adding, “At this point, all we know is that we are Caffé Italia at 1121 Richards Blvd.”

The worst-case scenario for the Katzes is that they will have to relocate to another city. West Sacramento is a possibility. But the Katzes want to stay in Davis.

They want to raise their children, ages 7 and 5, in the town where they met, fell in love and started a family and business.

“We love this community,” Shar said. “We would love to be here for another 20 to 30 years.”

— Reach Crystal Lee at clee@davisenterprise.net or (530) 747-8057.

Short URL: http://www.davisenterprise.com/?p=67108

Posted by Crystal Lee on Jul 28 2011.
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