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July 7, 2009 at 9:10 AM

Oceanaire files bankruptcy, shutters Seattle, former chefs weigh in

When the Oceanaire Seafood Room unlocked its stately revolving glass door on the corner of Seventh and Olive in January, 2002, patrons and critics alike (present company included) embraced the steakhouse-style fish-focused concept, the third for a Minneapolis-based chain. Known for a menu featuring 30 types of fresh seafood — much of it flown in fresh twice daily — it was an instant hit in a city where homegrown seafood restaurants are a dime a dozen. Yesterday, Oceanaire restaurant employees nationwide learned the parent company had filed for Chapter 11 bankruptcy protection, abruptly shuttering four of its 16 restaurants, including those in Seattle, Cincinnati, Charlotte and Philadelphia.

The revolving door at Oceanaire, stilled in Seattle. [The Seattle Times/Chris Joseph Taylor]

“The strategic decision that Oceanaire has chosen to take today will help establish a firm financial base and allow us to implement the operational initiatives necessary to build a stronger and more competitive company,” company CEO Terry Ryan said in a prepared statement. “During our restructuring, we expect to conduct business as usual in the vast majority of our markets, and intend to work with our current vendors and to continue operations without interruption to our customers.”

While Ryan was in Philadelphia delivering the bad news to employees, Wade Wiestling, Oceanaire vice president of culinary development was here in Seattle helping contact employees, calling vendors and preparing to donate much of the restaurant’s inventory to Seattle’s Table, a program affiliated with the non-profit Food Lifeline.

“The Seattle restaurant was a feather in our cap, for everyone in the company,” said Wiestling. “We took a great deal of pride in the fact that we were able to operate a successful seafood restaurant in this market until the economy gave way and hotel traffic dropped. We didn’t expect it to end like this.”

As with the closures elsewhere, the decision was based, he said, on the company’s inability to renegotiate its current lease with its landlord. With approximately 1000 employees, “we’re still a pretty small company, countrywide. We lost around 225 great family members today.”

One of those members is Seattle’s Ed Grandpre, who’s run the front-of-the-house at Oceanaire since its debut. “I don’t have to tell you what the economy has done to us,” said Grandpre, who learned of the closure Monday morning. Attempts to attract warm bodies at dinner have fizzled, he said. Like many restaurants feeling the pinch, Oceanaire has instituted come-ons meant to attract thrifty diners, including the hopefully named “2010’s Economic Recovery,” offering a $20.10 tasting menu plus $20.10 bottled wine specials.

GM Ed Grandpre, at Oceanaire’s oyster bar in happier days.

As a cost-saving measure, the restaurant recently stopped serving lunch, something they should have done years ago, notes Grandpre. “When you’ve got a restaurant that seats 250 people, you’ve got to sell a lot of lunches to justify being open. We’ve been trying our best to capture all the segments of the dining public, and it just kind of ran out,” Grandpre said. Adds Wiestling, “The restaurants didn’t fail. The economy failed the restaurants.”

But according to two former Oceanaire chefs, it wasn’t just the economy that signaled the beginning of the end for the company in Seattle and elsewhere.

“The closure is unfortunate,” said former chef-exec Eric Donnelly, a longtime Oceanaire vet who left the company late last year to open Toulouse, in lower Queen Anne. “I think they made some very poor decisions.” Not the least of which, he said, was locking the doors yesterday and giving no warning to stalwart staff, many of whom had been on board from Day One.

Eric Donnelly (right) confers with a waiter before service at Oceanaire in 2008. Ed Grandpre is seated far right. [The Seattle Times/Jim Bates]

“In this day and age, with the economic trends, the concept just doesn’t work, it’s too expensive,” Donnelly said. “With the fourth expansion, they thought they were on top of the world, they thought they could just open and open and open [additional restaurants] and everything would be fine.” And with the economy starting to dive, the chef-exec — who later “smelled blood” and jumped ship — felt the pressure of tightening restaurant expenses in the kitchen and elsewhere, “the pressure of counting beans.” Meantime, he cites the regular arrival of Oceanaire management, who’d fly into cities nationwide, racking up expenses at better hotels and restaurants. “Multiply that times 16 restaurants, and that’s an area where you’re not succeeding as a business person. That makes no sense to me.”

Chef Kevin Davis, now owner of the Steelhead Diner, was recruited by the Oceanaire in August, 2001. Wooed to the task after a diligent search for a well-connected local chef, he’d been given carte blanche to put his imprint on the menu and he did just that for the better part of five years, gaining national recognition for his efforts.

Davis said he has great respect for guys like Ryan and Wiestling, and for the founders of the company, but once Oceanaire took a big shot of venture capital to expand the concept, “all of a sudden you had a whole layer of management and accounting staff, you’ve built an infrastructure of people that weren’t from [within] the company. The fatal error was they felt their concept was bullet-proof and could be run by anybody. They didn’t need a chef, a GM, because their formula was so successful. They thought they were invincible and could charge anything they wanted. They figured if they could sell crabcakes and a big piece of fish, people would come.”

The corporate beancounters, Davis said, discounted creativity and relied instead “on focusing on the rare and exotic seafood, seafood-at-any-cost, which worked in some markets, like [Washington] D.C. where the same guy would go out and entertain politicians two or three times a week, drinking Stags’ Leap and Jordan, $100 bottles of wine. That didn’t work in Seattle.”

When Davis took the job at Oceanaire, “everybody at the time had just been through the dot.com bust, through September 11, and we were so happy to have a job, we were so enthusiastic.”

Enthusiastic chef Kevin Davis serves salmon (but not steelhead) at Steelhead Diner

Back then, he said, “You had all these restaurants specializing in Northwest seafood: Ray’s, the Waterfront, Seastar, Third Floor Fish, plus Anthony’s and Salty’s — places that had been around for a long time. And here you are, a 3-year-old seafood concept out of Minneapolis, coming into a well-established town that has a great seafood history. It was hard but we did it, and it was something to be proud of. With Oceanaire, we were able to bring coals to Newcastle — to bring a luxury seafood restaurant to a luxury seafood town.”

That success, he said, came from within. “It took a lot of people giving it everything it had: non-stop attention to detail.” With swift, progressive expansion, those details, he said, became less important to the bottom-liners in Minneapolis.

Speaking from his restaurant, just a fish-toss from Pike Place Market’s fish-tossers, Davis insists, “Anybody can run a restaurant in boomtown when times are good, but only a certain few can survive when times are hard, when there’s a dot.com bust or September 11 or an earthquake or a failed economy. Only the restaurants that have people who are engaged, people with vision at the wheel and at the helm, driving sales day in and day out. The restaurants that have that leadership will do well in good times, and in bad.”

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