County’s commercial sector struggles with sluggish fire recovery

An anniversary reunion is in the works for the cooks and crew of Willi’s Wine Bar, a Santa Rosa restaurant that suffered fiery destruction last October, then a year in limbo.

The 16-year-old Willi’s burned to the ground in the Tubbs fire, closing the popular restaurant. It is expected to reopen early next year in the Town & Country shopping center. The upcoming reunion will bring together those who worked at the Old Redwood Highway eatery and who intend to work at the new Terrace Way location. The gathering could turn emotional, because a comeback was far from certain.

“We went through months of not knowing if we were going to do another Willi’s,” said co-owner Terri Stark. She and her husband, Mark, operate six restaurants in Sonoma County.

The Starks are enduring an experience typical of area entrepreneurs whose businesses burned in the most destructive fire in state history. Even as the county’s economy has rebounded after the disaster, the affected business owners have found themselves bogged down by unpaid insurance claims and questions of whether and how to rebuild.

In comparing the business recovery with that of the residential rebuilding, two sets of numbers stand out:

Insurance companies, as of this spring, had paid more than 70 percent of the $6.99 billion in damages claimed by residential property owners in the county.

For businesses, the payout for the same period amounted to only 43 percent of the nearly $793 million of claims, according to the most recent numbers available from the state Department of Insurance.

Homeowners have begun construction on more than 1,000 of the 5,300 homes destroyed countywide by the October 2017 fire.

SR businesses hit hard

Indeed, fire-damaged commercial properties here are undergoing repairs. But of the approximately 40 businesses, excluding home-based firms, that were destroyed, property owners have started reconstruction on only one site: the Villa Capri senior care home in Santa Rosa’s Fountaingrove neighborhood.

The North Bay wildfires proved an unprecedented disaster for businesses in and near Santa Rosa. The fires, which took 40 lives and caused nearly $10 billion worth of damage across the region, brought commerce here to a virtual standstill for a few days. Some companies lost power and nearly all suffered from the disrupted lives of workers who were forced to evacuate by the thousands from large portions of Sonoma, Napa and Mendocino counties.

In Sonoma County, more than 1,800 businesses filed insurance claims, including 152 that reported a total loss. The latter group includes farm structures, home-based businesses and commercial properties not then in use.

In assessing the devastating effects, the city of Santa Rosa and the county count at least 55 businesses, excluding in-home firms, that suffered damage or destruction. Among them were the Fountaingrove headquarters of Keysight Technologies, the Paradise Ridge Winery, seven hotels and inns, nine restaurants and fast-food eateries and eight entities operating out of the Burbank Center for the Arts.

Affected retailers included national chains like Kmart, Kohl’s and Trader Joe’s, as well as local owners of a bridal boutique, a firearms store and a bath and kitchen outlet.

Even owners and executives of partially burned businesses faced plenty of obstacles to recovery. Cleanup crews at Keysight hauled away more than 1 million pounds of debris from the Fountaingrove Parkway site, while the company leased temporary research and manufacturing quarters for months in Rohnert Park and Petaluma for 1,200 workers. Kohl’s took until mid-March to reopen its Airway Drive department store, and Trader Joe’s said in a recent statement the reopening of its Cleveland Avenue store was expected sometime before the end of 2018.

Complex insurance claims

Recovery is even more challenging for businesses with buildings that burned to the ground.

Among such properties is the Fountaingrove Inn on Fountaingrove Parkway in Santa Rosa. Justin Hayman, general manager, said the hotel’s owners are still working with their insurance company and considering different options.

Businesspeople, building officials and an economist said insurance settlements are more complicated and take longer for businesses than for homes. They also suggested the owners of burned commercial structures need more time to carefully evaluate how best to redesign decadesold lodging and retail structures to serve the needs of today’s businesses and customers. In some cases, the answer may be to use the property in a completely new way.

For example, the Kmart store on Cleveland Avenue “was unlikely to rebuild because retail is changing and that location may have been on the chopping block anyway,” Sonoma State University economics professor Robert Eyler said.

City records show Lowe’s Companies Inc. last winter sought information about building a home improvement store on the Kmart site. Panera Bread made a similar inquiry this summer in regard to a possible eatery on the burned Applebee’s location on Hopper Avenue. However, in both cases initial talks didn’t result in further discussions, a city spokeswoman said.

Along with the commercial property owners, entrepreneurs who leased space and lost businesses in the fires have found the recovery tasks formidable.

After the destruction of the popular Sweet T’s restaurant in a small Fountaingrove shopping center, owners Ann and Dennis Tussey began exploring what it would take to get back into business. The first challenge was landing a new location.

“We looked at a number of places in Santa Rosa and couldn’t find anything,” Dennis Tussey said.

The burned restaurant had lacked adequate insurance, he said, so to rebuild the couple sought a low-interest loan through the U.S. Small Business Administration. That loan was approved less than two weeks ago.

Work is well underway for a new Sweet T’s with indoor and patio dining in a Safeway shopping center along Brooks Road in Windsor. The restaurant again will feature Texas-style beef brisket and Memphis-style ribs prepared on an outdoor smoker, as well as meats and seafood cooked inside on a wood-fired grill.

But Sweet T’s won’t reopen until possibly late November, not “summer 2018” as the sign hanging above the front door proclaimed earlier this month.

“We were a little optimistic,” said Ann Tussey, adding “maybe more than a little.”

All the pain and suffering of the charred businesses isn’t reflected in broader measures of the county economy.

“Sonoma County is reasserting itself as one of California’s strongest midsize economies after a brief hiccup follow the Tubbs fire,” according to a report released this month by Moody’s Analytics, an economic research firm. The report predicted the county will remain a “strong performer” in the state and concluded over the longer term its wineries, breweries and tourism sector will help propel job and income gains. Two weeks ago, the state Employment Development Department reported the county’s unemployment level stood at 2.7 percent in August, well below the state’s jobless rate of 4.2 percent.

County mirrors other areas

Economist Christopher Thornberg, a founding partner of Beacon Economics in Los Angeles, said the county’s experience in the fire aftermath mirrors that of other areas involved in past disasters such as earthquakes, hurricanes and terrorist attacks. Typically, the economy in such locales suffers an initial shock, but then begins to rebound after a few quarters and “within a year you’re back on trend,” he said.

Thornberg, who will speak this week to civic leaders in Santa Rosa, said when he recently reviewed employment figures for the city, “there were actually more jobs than before the fire.”

Tamara Mims, president of Monterey-based Four Sisters Inns, acknowledged she was surprised that bookings at the company’s reopened Kenwood Inn & Spa on Sonoma Highway have been similar to the previous tourist season before the fires.

Even so, she recalled many challenges in the past year. They included helping international guests retrieve passports left behind in the initial fire evacuation; assisting a bride in obtaining alternate lodging and wedding venues for a week after the fires; and remaining closed until late February so almost the entire 29-room inn could be re-plastered after cleanup crews couldn’t scrub the smoke damage from its walls. The closure also meant retraining existing staff.

Mims, whose company operates eight Wine Country lodging properties, said the fires have made it more difficult for her housekeepers and other staff to find housing. Some have declared, “I’m just moving to Sacramento. I just can’t afford to live here anymore.”

Even as Terri Stark prepares to reopen Willi’s Wine Bar, she continues to work on her insurance claim, a process for which the inventory of burned items is expected to include “every sauté pan, every tong.”

Still, she spoke with gratitude that Willi’s staff wants to work together again at the new restaurant. Most of the workers had been reassigned to shifts among the Starks’ five other restaurants. Stark predicted the upcoming reunion would be “a real tear-jerker moment.”

At Sweet T’s new Windsor eatery, the Tusseys plan to bring over two lemon trees that survived the fire. Above the new restaurant’s patio, the couple recently pointed overhead to a 10-foot by 4-foot cedar post that showed charred marks from the fire and was among the beams reclaimed from their former outside dining area.

The Tusseys said they had found a winning formula at the old Stagecoach Road location in Santa Rosa, with revenues more than doubling in five years. Looking forward, they hope their Windsor location will attract a large number of regular patrons from nearby residential neighborhoods, similar to what occurred at the earlier hillside setting in Fountaingrove.

After the fire, Ann Tussey said, those regulars “lost their place where they met all their friends and neighbors.”

You can reach Staff Writer Robert Digitale at 707-521-5285 or robert.digitale@pressdemocrat.com. On Twitter @rdigit.