Once-trendy Café Japengo to close Friday, a casualty of rising UTC prices, competition

afé Japengo’s nearly 30 years in business can be likened to a typical restaurant meal: a flashy starter, a solid main course and a finale that’s bittersweet.

After dinner service on Friday, Café Japengo — the once see-and-be-seen hotspot that evolved into a venerable dining destination for creative Asian fare — will close its doors at the Aventine complex, an apparent casualty of rising rents and the booming culinary scene in the UTC area.

“There’s so much activity in this area — the condos, the university, businesses, the new hospital building and the mall, what you see going on at UTC is remarkable,” said Allan Farwell, general manager of the Hyatt Regency La Jolla, which owns Japengo.

Farwell said increased competition spurred by the expanded Westfield UTC’s focus on higher-end eateries coupled with a significant rent increase, prompted Hyatt to walk away from the venture, rather than let it sink into failure.

The Aventine complex is owned and managed by Rockpoint Group, a Boston-based real estate private equity firm. Farwell declined to specify what the new rent would have been had the lease been re-upped, but said there had been a 70 percent to 80 percent rent appreciation since the restaurant last renewed its lease around 2001.

“It’s a real shame because we’re still busy, we’ve always been busy,” Farwell said, adding that Café Japengo will be replaced with a fitness gym.

“Nine new restaurants (at the mall) doesn’t help your legacy restaurants. It’s just hard for a restaurant to sign a new lease here. This was just the time, unfortunately, to say we want to move ahead in a positive way.”

With Hyatt’s help, many of Café Japengo’s 40 or so employees have already found new jobs at other upscale hotels under the Hyatt brand, including the Manchester Grand Hyatt and Andaz San Diego, both in downtown San Diego, and the Park Hyatt Aviara in Carlsbad, said Japengo manager Philip Nicholson.

“We’ve had a terrific crew that’s been with us for a long time and Hyatt has been really great in helping them out,” Nicholson said.

While the dining room was bustling with hotel guests, families and area office workers one afternoon last week, Nicholson said there’s been a perceptible decline in customers during the day.

“Just in the last year, with all the new restaurants at the mall up the street, I’ve seen a decline in lunch business,” he said.

The younger, hipper clientele of Japengo’s heyday — the kind that can create buzz and generate more business — has long since moved on.

When the Michael Graves-designed Hyatt Regency La Jolla opened in 1990, there were four restaurants in the hotel complex known as Aventine. Of those original eateries, only Café Japengo, which launched in 1989, still exists.

During the 1990s, Japengo, perhaps more than any other restaurant in San Diego, attracted a stylish crowd from around the county. Its popularity was fueled as much by the club-like scene — especially on Thursday nights — as the restaurant’s critically acclaimed sushi and innovative Pacific Rim cuisine. The 4,000-square-foot space, with its then-unheard-of exposed duct work and collection of authentic Asian art pieces, gave it a chic, gallery-like, industrial feel.

“It had a different vibe when it opened in 1989. It was the place to be,” said Lee Evans, who has worked as a server at Japengo for 22 years. “We were always at capacity, especially on Thursday nights. If you didn’t have a reservation, forget it. On Friday and Saturday nights, there were two-hour waits.”

Evans said in recent years, the restaurant became more popular with families, with longtime customers bringing their grown children in. “It’s (Japengo) grown up, people have grown up.”

The UTC area has grown up as well.

Mike Spilky, president of Location Matters, a San Diego real estate brokerage firm that specializes in restaurants, said while UTC has always had a dense concentration of Class A office buildings, it has struggled to fill restaurants at night, after business hours.

“I would speculate that a lot of the residents of those apartments are (UC San Diego) students and with the high rents, I imagine that doesn’t leave a lot of disposable income to eat at fancy restaurants.”

But UTC’s current bustling construction activity marks a key period of transition, he said.

“With the trolley coming in, more hotels in the pipeline, more condos and the caliber of restaurants coming in at the mall, it will start drawing from outside the area,” Spilky said.

“It will kind of be a downtown for North County. That’ll be the only way it will be successful.”

In today’s market, the coming closure of Café Japengo is a symbol of over-saturation, according to Spilkey.

“Too many restaurants, too many options is not a good thing,” he said. “It’s not a bad thing for the area to lose a restaurant; it’ll actually help the other restaurants in the area.”

Don’t tell that to Japengo’s loyal, longtime customers, many of whom have been coming in since the restaurant announced its closure to order such time-tested dishes as the curry-dusted calamari, Japengo fried rice with vegetables, char-siu duck salad and the special albacore sushi roll.

“People are really disappointed,” said Nicholson, the manager, adding that some feel so connected to the restaurant, they want to literally bring home a piece of it home with them.

“I’ve had at least 20 of our regular customers offer to buy it,” he said, pointing to the carved mask of the long-nosed, mythical Japanese creature Tengu that hangs over the once jam-packed bar.

Before it, or other pieces in Café Japengo’s Asian art collection, can be sold, they need to be appraised for sale. Like UTC, Tengu is likely worth more than it used to be.

“Someone offered $3,000 for Tengu,” Nicholson said, but we’ve heard it could be worth $15,000 to $20,000.”