San Jose food hall has rocky start

People driving by San Jose’s Downtown Food Hall might be forgiven for thinking it’s closed.

The dark interior seems to be housing abandoned equipment. Next to a locked door directly under the building’s marquee, an “open” sign is turned off. The real entrance is three windows down, under an incongruous green and white striped awning.

San Jose’s Downtown Food Hall, which opened at the start of the year, is touted as having dozens of restaurants — but that’s partly a facade. With fewer than 10 kitchens operating, some business owners have created multiple storefronts to showcase variations of different cuisines, giving the illusion of a larger operation than actually exists. But the service model is not working for owners or customers, with marketing problems and ordering confusion among the many issues.

Varun Aggarwal and his wife Tanvi operate a single kitchen under nine different restaurant names, with vegetarian menus that cover classic Indian dishes, street food, pizza, burgers, Chinese food and inexpensive items geared toward students. He said that even though he has what he claims is the largest selection of vegetarian dishes in the country, with over more than 200 items, the lack of visibility for his kitchen is stunting his business.

“We are not allowed to have a sign outside the building,” he told San José Spotlight, “or something that would enable the customer to know what we have. All we have is our small logo on that kiosk. Business is OK, but it should be growing more quickly.”

Restaurants in the food hall , run by CloudKitchens, also produce food for delivery and pickup, though there is on-site seating. Known as a ghost kitchen, the business concept took hold during the pandemic as demand for delivery services increased.

In a location on East Santa Clara Street that previously housed Hank Coca’s Downtown Furniture, four of the seven picture windows are papered with ads for Y-Linh Sandwiches, but the eatery has no open hours listed and is marked as closed on the website. Yet it still appears on the kiosks as one of the hall’s available kitchens.

“People walk by and don’t even know this is a food place,” Sam Ramani, who owns SpicePulao, one of the kitchens in the hall, told San José Spotlight. “We get that kind of comment every day. Until last week, they did not have any open signs here.”

Inside the food hall is a lobby with a handful of tables and a counter with seating. A sushi kitchen faces the street, and two cramped kitchens serving tea and pizza face the dining area. A kitchen in the back, occupied just last month, is now gutted and empty.

Customers place orders at the front counter via kiosks that display menus from any of the 33 restaurants that happen to be open at the moment. Items from different menus can be combined into a single order. After paying, orders are relayed by computer to the appropriate kitchens.

When the food is ready, a robot on wheels scurries through the inner depths of the facility, collecting the items from each kitchen and bringing them to a human who bags the order and hands it off to the waiting customer.

“At the moment, we have six to nine kitchens running,” Coryne Turner, the facility’s associate operations manager, told San José Spotlight. “We have 26 kitchens in all and have almost all of them rented out. But there are some legal things to figure out.”

Turner is a recent employee, hired on April 29. She said business has been on the slow side since opening in January, which she attributed to not running at full capacity.

“We are going to do more marketing and try to get ourselves on the map,” she said. “People don’t really know us right now, but the goal is to get things to 100% sooner rather than later, and get things booming.”

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While they are trying to fill the empty kitchens, several of the early tenants either did not survive until opening or have closed since. Ramani said that delays to the planned September opening created serious problems for him.

“All of our equipment was here, but it was locked up,” he said. “After we got in, it took two months to open. We were paying rent, but things were not functional. We are not allowed to run away from the lease. If they would release us, we would leave the next day.”

The problems seem to be endemic with the CloudKitchens operation, which has nearly 100 ghost kitchen facilities nationwide. According to a survey of 20 CloudKitchens locations, the average turnover rate for kitchens in 2022 was 65%. Company representatives did not immediately respond to a request for comment.

Some regulars seem aware of the underlying problems. Customer Alan Jackson said he has a love-hate relationship with the food hall because the food offerings keep changing, even though it has only been open a few months.

When asked which he considers his go-to restaurant, he said it’s closed, as is his second favorite.

Customer Fred James, who is in the restaurant business, said he thinks the problem is the food hall’s impersonal nature and the disconnect between customers and the kitchens.

“Because this is essentially a storefront,” he told San José Spotlight, “it unintentionally creates a bad demeanor. You are not dealing with people here; if you have a bad experience with one kitchen, it reflects on everybody. You are not going to come back.”

While he also has mixed feelings about the food and business model, he said he will keep stopping by, hoping things sort themselves out.

“I want the place to succeed,” he said. “I don’t want any place to fail. But I just think everybody needs to have some awareness as to what is happening here.”

Contact Robert Eliason at robt@lostinthestars.com.

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