Here’s a novel way to look at the recession: A lab for testing a restaurant strategy based on thrift. That’s how David White, a former restaurant owner, and David Steel, an investment banker, like to think of their decision to open Flour + Water.

Left: Jon Darsky(Pizzaiolo), Center:David White, Thomas McNaughton(Chef)

White, the former owner of Nua, began noticing in 2007 that diners read his menu different.People were spending more time looking through the menu, looking for values,” said White . So even before the economy turned, he said, “we discussed opening a restaurant with high quality food at affordable prices.”

Using this strategy to come up with a menu, Steel and White went ahead with their plans to renovate at 20th and Harrison streets and today, Friday, May 15th,  the new Italian restaurant will open its doors for dinner.  “We planned a long time for this and like any business that intends on making a go of it, we’ve spent wisely and where it matters,” Steel said.  White offered an example of what that means: “We are reusing the silverware and glasses rather than buying new ones.”

Others too have opened recently in the Mission District, braving a recession that has pushed the state’s unemployment rate to 11. 4 percent and the Bay Area’s rate to 8.5 percent. Earlier this month, Schmidt’s, a German deli started serving lunch in the corner space at Folsom and 20th. Other new entrants: The Corner at 2199 Mission St, Phat Philly at 3328 Mission Street, and Anthony’s Cookies on Valencia St. Urban Burger and Xanath, a new creamery, are in the works on Valencia St. And Gracias Madre, another Café Gratitude venture, will open on Mission St.

Sean Quigley, the owner of Paxton Gate, who designed Flour + Water and started a second children’s store on Valencia in December said  neighbors respond well to businesses that take risks in a recession. It’s really no different than opening during boom times except that maybe people appreciate it more,” Quigley said. “It almost seems like we get respect from the community for doing our part to help the economy.”

Flour +Water will hire 25 to 30 people in the Mission District, the owners said. It will also create an art space and already held a competition for a mural, which Jessica Niello won. “The dark, naturalistic style of the store resonates with both my art and my personal style,” Niello said.

A recent Harris Poll found that 75 percent of those polled said they are likely to decrease their spending on eating out.“ The super high-end restaurants are suffering, with their sales down 30 or 40 percent,” White agreed. The concept of Flour+Water is “casual fine dining.”

Still, some of the new restaurants have found that even with  moderate prices, luring in patrons can be difficult.

The Corner Restaurant focuses on earthy tastes.
The Corner Restaurant focuses on earthy tastes.

“It is a slow start, but San Franciscans support organic food and locally sustainable business,” said Sadao Nelson, the manager of Weird Fish which opened The Corner Restaurant, on March 15th at 2199 Mission Street. The new place is a  venture with the owners of Boogaloos and and the St. Francis Soda Fountain and seems to be attracting a following.

Mission St., Nelson said, offered great opportunity because it’s less crowded than Valencia St. and “is more convenient in terms of transportation.”

Steel said he and White chose the Harrison St. location because  of the neighborhood’s “food and wine intelligence.””

“ They are urban but not pretentious nor concerned about the fluff,” Steel said of nearby residents.

But it’s hard to know what works.  Schmidt’s, which opened for lunch in early May, appeared to be doing respectably on a recent weekday.  And one block south construction workers said they were rennovating that corner space for another restauarant.  So far, Anthony Lucas, who just opened the Mission’s first cookie bakery, Anthony’s Cookies at 1417 Valencia Street, also has business   Lucas agreed with Steel and White, whose chef, Thomas McNaughton, will live above the restaurant, that it’s important to embed in the community. For Lucas, that means always being on site.

Lucas has been cooking since 1997.
Lucas has been baking since 1997.

“What do you like about our cookies,” the young baker asks every customer, who stops by. “I was mindful of recession, but I was willing to go ahead and open this store,” Lucas said. “Because the neighborhood was really supportive.”

Kiya Babzani, the owner of Self Edge, who munched cookies at Anthony’s recently with his wife and friends, said, “It is really nice to have new locally owned business and Anthony is very enthusiastic about baking, that is why I come back here over and over again.”

For Lucas, knowing what a customer wants is a key to success.

You have to have confidence from the community, you have to listen to what the community wants,” Anthony said.

Others see Lucas as someone the community can look to.

This is one of few business owned by an African American. It is very positive for the African American kids,” said Melvin Smith, a teacher at nearby Synergy School as he ate a banana cookie. “Because Anthony is a good example that someone with color has their own business, providing quality business.”

While it’s still too early to tell how many of the newcomers will thrive, the new comers  remain realistic. “We are extremely confident, but at the same time, very humble. We are not taking anything for granted,” White said.

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  1. Great concept. You can actually thrive in a recession by hitting the right price bracket and catching all the usually upscale diners who are dropping their standards a little. And when the economy starts to recover you have a great market share and can push forward a few small changes in your menu and let prices creep up a little.