Rob AriasSome extremely sad news for E’villains and the Emeryville Small Business community as Commonwealth Micropub on Adeline announced their abrupt closure last Saturday December 19th. Barely nine months from their Grand Opening back in March, they deemed the Triangle neighborhood British-style Gastropub unsustainable and have decided to close their doors for good. “For any number of reasons, the concept did not meet the demand we anticipated for our efforts to be sustainable” noted Ross & Ahna Adair through a press release.
Commonwealth was every bit the example of an establishment that E’villains wanted. A Family owned establishment that made our city more vibrant, more bikeable, more pet-friendly, more livable. They took a huge personal financial risk on an area that desperately needed a locally serving establishment and sadly, our city could not support them. So what went wrong? Is the City of Emeryville just an overall inhospitable environment for small business … or are there other factors? To say their failure was strictly because of our recent adoption of the highest-in-the-nation Minimum wage ordinance would be reckless, but to say it had nothing to do with the MWO would be naive.
Through a Press Release, Ross & Ahna made the following announcement:
With a mixture of sadness and relief we are announcing the closure of The Micropub at 3986 Adeline St, Emeryville for the holidays and into the New Year. Saturday, December 19th will be the last night of service. For any number of reasons, the concept did not meet the demand we anticipated for our efforts to be sustainable.
We are extremely grateful to our staff and to all who enjoyed and supported our wee pub this year.
We are actively seeking an alternative solution with the hope that the community can enjoy the space again in the near future.
In the meantime, The Micropub will continue to be of use as our commissary kitchen for our original location. We look forward to seeing you here on Telegraph soon.
We are also available for hosting private events and pop-ups on Adeline until further notice, and would love to hear from you. Please email info@cmonoakland.
Cheers,Ross & Ahna
After operating a successful Oakland location on Telegraph for nearly five years, Ross & Ahna decided to bring their formula to Emeryville announcing their intent to open a Micropub version back in June 2014. The area has been a challenging one, and the previous two businesses at that location have not survived (Furenzo & Cafe Bier). But with three new nearby high-density developments in tow and a thriving local economy, neighbors were optimistic that the area was ready to support a local pub. They were confident enough that they’d be open by the end of the year, their outdoor sign was painted with an “EST. 2014”. Issues with the building’s infrastructure and permitting ended up delaying the project till March of 2015. Even Emeryville’s first Bike Corral that the city touted was overbudget.
Two months prior to opening, the new progressive City Council majority announced their intent to fast-track their highest-in-the-nation “living wage” increase. Ahna reluctantly supported the minimum wage in this May 2015 SF Business Times article noting “I am a little nervous on how quickly we get from $12.25 to $15.” (Emeryville will have nearly annual $1 phase-ins for small business putting them on a trajectory for $16/hr. by 2019). “Our employees are our greatest asset, and If we want to grow our community, we have to make our jobs better jobs” she explained. “The big fear is whether our customers will come with us and see it through. Doing the right thing shouldn’t put us at a competitive disadvantage” noting the relationship between labor, prices and volume of business.
Tipless model partially to blame?
Like many restaurants now attempting to mitigate the impact of large minimum wage increases, Commonwealth embraced a tipless model out of the gate (Under state law, tips cannot be credited toward the minimum wage). Under a tipless model, restaurants shift money previously paid by patrons as tips into the bill itself by raising prices. This revenue can then be used to help meet the employer’s rising wage obligations while providing a more consistent, though potentially lower, paycheck to previously tipped staff.
Commonwealth embedded a 20% gratuity in the price. Now if you generally already tip 20%, you would effectively be paying the same … but the menu prices can apparently cause “sticker shock” to some patrons and some have noted that it ultimately discourages repeat business. Bucci’s (another recently shuttered Emeryville establishment) experimented with a service charge but reverted back to the traditional model after customer complaints. Bucci’s of course had the luxury of a loyal customer base from their 28 years in existence. Eater SF also theorized that the tipless model may have contributed to Commonwealth’s demise.
The tipless model is being trumpeted as a way to more evenly distribute revenue between the front of house (servers, bussers & bartenders) and back of house (Cooks, food prep, dishwashers). Needless to say, most waiters I’ve spoken with despise it and businesses I’ve spoken with note it’s a harder sell to attract top waiting staff.
Chronicle Food Critic Michael Bauer came out in support of the tipless model in this October Piece observing how many restaurants in cities that have raised their minimum wage have embraced it. Most of the examples he referenced were more fine-dining establishments. “It’s appealing for the same reason as Uber– because it cuts out the guesswork and makes it easier for customers” he noted. The East Bay Express Food Writer Luke Tsai wrote a very thorough piece titled “The Tipping Point” back in February 2015. Some notable establishments have scrapped the tipless model after trying it citing staff retention.
What’s not clear is if this model can easily be replicated anywhere or if we have to wait for this “cultural shift” to take root. Some areas can get away with higher prices when they have other advantages such as being in a bustling district or near a major transportation hub. Commonwealth was a bit more of an outpost. The area is changing rapidly, but apparently not fast enough for Commonwealth to survive.
This was a noble move but it was unclear if the dining pubic was prepared to absorb the higher costs that come with the dramatic overnight wage increase. One only needs to scroll through their Yelp reviews to determine that the restaurant goers might not be prepared to personally foot the bill for these large wage increases or understand the correlation.
[one_third last=”no”]”The beer prices were steep”
-Bill H.
Berkeley
[/one_third]
[one_third last=”no”]”Over priced food.
Over priced beer.”
-David G.
Oakland
[/one_third]
[one_third last=”yes”]”Their beer and cider selection is okay and their menu respectable, but their prices are a bit ridiculous”
– Jason M.
Oakland[/one_third]
This review narrative doesn’t seem to exist in the Oakland establishment’s Yelp review section where they do not apparently have a tipless model.
So despite overall very favorable reviews of their food, ambiance and service, it seemed repeat customers were lacking. Shortly after their opening, they ceased brunch service amid rumors that they were struggling and even looking to sell.
Which Small Businesses in Emeryville will remain viable?
Adeline neighbor Baseline Produce (on the Oakland Side of the border) also recently shuttered (more to do with their inability to obtain a license to sell beer & wine I’m told). It has to be concerning to in-the-works Propaganda Gastropub, neighboring Scarlet City Espresso and Basic Cafe (although Propaganda will have the benefit of serving hard alcohol and its higher margins).
As a fervent supporter of small business in our town and as someone who has championed their plight, it’s absolutely heart-wrenching to witness the lack of support they received. The City of Emeryville (residents and city government) have a challenge ahead of us. We continue to reiterate that we want small businesses to thrive – but our actions and support seem to belie this notion. It’s unclear to me that the same people who are supporting higher wages are doing anything to actually support the small businesses that are directly impacted after the votes are tallied.
Commonwealth joins Bucci’s, E-22 Cafe, Coco Delice, the Bread Project among Emeryville businesses that have closed their doors or left Emeryville in 2015 (not exclusively because of the MWO). Yes, some establishments have decided to give it a go but I’ll reiterate that we won’t know the true impacts until small businesses are faced with $16/hr. in 2019 or our next economic downturn (whatever comes first). Sadly, I can guarantee this is not the last shuttered establishment I’ll be writing about in 2016. For now we’re left to ponder the darkened spot on Adeline. As Commonwealth’s Facebook Page aptly stated “We Hardly Knew ye …”
[poll id=”43″]
NOTE: We reached out to Ross & Ahna for further clarification on Commonwealth’s closure but they did not reply.
You write: ” …it was unclear if the dining pubic was prepared to absorb the higher costs that come with the dramatic overnight wage increase”
But, the prices were only higher for non-tippers
or very low tippers.
The City of Emeryville could make an effort to support local restaurants by including an article about why higher wages are balanced by no-tipping policies in their next publication.
I, for one, find tipping stressful and prefer to see a an inclusive price on the menu. This is the European model (service compris) and it has worked very well over there for many decades (if not centuries). Europeans diners will sometimes add a small gratuity, but that is only to reward exceptional service, and not expected.
I wonder if Yelp can assist in this process by making Tipping or No-Tipping a checkbox at the top of all restaurant reviews. And restaurant owners (or loyal diners) can respond to reviewers who comment about high prices by explaining the no-tipping benefit.
Thanks Joan. I agree, the city could have rolled this out with a publicity campaign the way Oakland did with a “support local” message. Again, this is going to require a massive cultural shift and waiters seem reluctant to embrace it. I prefer it personally.
Beyond being a cultural norm that can’t easily be changed, tips play other important roles. They allow customers to pay different prices for the same good. Tips also allow employee pay to vary with business revenue.
Coupons, rebates, and specials achieve the same goal of allowing a restaurant to charge two prices for the same good. The cost conscious consumer takes the time to find the coupon, fill out the rebate form, or identify the steps necessary to get the special. Non-price sensitive consumers pay a higher rate. It’s like a progressive tax structure. People can tip according to their means, so the student might tip 10% while the financially comfortable exec might tip 25%. When these options are eliminated, the restaurant sets a higher price which prices people out of the market (who then complain on Yelp).
Tips also allow businesses to survive downturns, recessions, and seasonal variation by sharing the ups and downs of a business with the employees. When the restaurant is busy, tipped workers make a lot more and so does the restaurant. When business is slow, tipped workers income is reduced along with corporate revenue. When you eliminate tipping and replace it with a high fixed wage, businesses lose their ability to weather difficult times without laying off workers (or in this case, closing) and workers lose the ability to share in the financial success of the business. All of the risk is shifted to the employer and so is all of the reward.
When a restaurant has to explain why its prices are so high as its first impression, it probably doesn’t stand a chance. I’m impressed with how quickly the owners cut their losses. Sucks for all the people who lost their jobs, but glad the owners had the good sense to bail.
The problem with the $15 minimum wage is that the servers got a raise and the customers for the most part, did not see a rise in wages.
Add to that, Emeryville restaurants like Rudy’s and Lanesplitters jacked up menu prices, but did not jack up food quality or portions and service quality did not improve. Both places saw their regulars drop off as well.
I suppose the counter argument to that would be that all of those things (additional waiting staff, higher quality food and larger portions) might require further price increases.
Regarding the Commonwealth Micropub, it should be noted that the space was incredibly small, the tables tight, and the acoustics incredibly bad so that it was impossible to hold a conversation without shouting, and WITH shouting it was impossible to communicate with a group of four. I, with interest and in support, went there once, but couldn’t bring myself to return.
Small business owners particularly restaurants and retail should steer clear of Emeryville. Between the ridiculous minimum wage, the sky high rents, and the random whims of the city government, Emeryville is not a good place to throw down your life savings and try to launch a business.
If you’re an aspiring mom-and-pop shop, save yourself the trouble and open across the border in Oakland or, better yet, Denver.
Could it not just be that Emeryville isn’t really a place for nightlife? I haven’t lived in the bay for 3 years now, so maybe it’s different — but the idea of a going to a bar in Emeryville — with a lack of regional transit options — seems pretty unrealistic to me. Perhaps there is just not ‘there’ there?
I wouldn’t consider Commonwealth a bar or nightlife spot. Honor, Prizefighter & Branch Line are all bars and they seem to do pretty well (All are on Hollis which is the more or less the artery of Emeryville).
Thanks – and I realize I don’t know the area well enough nowadays to make an informed comment on the potential for success of a business like that in Emeryville. My beef was that the poll might be a bit skewed… perhaps the closure may have more to do with the crowd attracted to craft beer bars — and how close it is to bike/walk/transit facilities — rather than minimum wage or the employers pricing choices as listed…
That’s fair. I think the location was a criteria and maybe one I should have listed instead of the “none of these” catch all. I didn’t hear too many complaints about the location though (parking, crime, etc). They were a bit off a main artery though (40th).
The Yelp comments make it clear that high prices were a significant drag on the business. The high prices were tied to the ‘no tipping policy’ which was tied to the minimum wage. It’s hard to deny that Emeryville has become a really difficult place to survive as a small business.
Will miss it! If the beer prices had maybe been just a little lower, it might have been more attractive – we would have a beer or two, but if you went for more than that, your bill seemed to increase exponentially… Having food and ~ A ~ drink tended to result in a similiar price to that which one may expec to pay anywhere, after tip, I felt.
If you don’t understand the correlation between higher wages and higher prices than you lack a basic understanding of economic principles. Ahna stated it perfectly “Doing the right thing shouldn’t put us at a competitive disadvantage.” Well the city DID put them at an economic disadvanatage. Instead of a comprehensive approach to tackling our affordability crisis (mostly because of our housing shortage), they thought they could fix things by sticking it to businesses. So sad that our policymakers are so clueless.
Instead of 10 or so living wage jobs, the city just effectively sent them to the unemployment line before the Holidays. Good Job Guys!
The Emeryville MWO was never about Emeryville. It’s always been about the SEIU.
People are commenting on their closure as though it relates directly back to the prices looking higher due to tip inclusion. That’s not at all what the owners said. What they said was this : “For any number of reasons, the concept did not meet the demand we anticipated for our efforts to be sustainable” noted Ross & Ahna Adair through a press release. Their concept did not meet the demand. That means that possibly there wasn’t enough interest from the public, or that the public didn’t like the space they created, or maybe they didn’t choose an area with enough visibility or walking traffic. Maybe they loved Emeryville but didn’t do enough research on the demand and location? I, like everyone else, don’t know for certain, but what I do know is what the owners said. They said it was due to “any number of reasons.” They tried and that’s admirable. Maybe that says something about the location, maybe it says something about their business savvy, maybe it says something about the economy… maybe it says a little bit about several things. But to turn their closing into any side of a political soap box is silly. I’m sorry it didn’t work out for them, and hope they’ll have success in whatever they do next. Many people start businesses and fail the first time, especially businesses in the hospitality industry.
I’ll let you peruse their Yelp reviews on your own but it seems pretty clear to me that this is valid. I’m no fan of Yelp for a lot of reasons but you can get a “wisdom of the crowd” aggregate opinion from it. In fact, a couple of the commenters here noted the same things. I’ll agree with you on the added complexity of the location. For the record, this was their second business.
Don’t forget the owners are trying to sell the business / space. It’s hard to market an impossible situation.
“Sustainable” is relative. The demand they needed to be sustainable with a $9 minimum wage is entirely different than what they need at $16.
And it snowballs. When you raise prices to cover wages (tipless), demand falls (Yelp comments) requiring even higher prices.
We’re just getting started with the business closures. At some point the reality of what just happened to Emeryville, its residents, and its entry level workers will start to set in. That reality is already beating hell out of the small businesses.
It seems the beginning of a bubble pop for restaurants. Ever rising prices can’t be sustainable. I stopped going out almost entirely to stay in my budget. The Oakland Commonwealth has also been effected by rising minimum wages in Oakland. Last year you could get always get a quality $5 beer. No longer, now it’s 6.50-7.00 starting point. I’m now cooking at home and saving a lot of $$.