Downtown restaurateurs are facing a variety of concerns, from worries about lack of downtown workers to fuel lunch traffic and changes in the delicate ecosystem of neighborhoods, to changing habits of diners, who are drinking less alcohol and going out at different times of the day.

“If a restaurant is important to you, if it’s a place that you love, go out and support them, because it’s a difficult time right now,” said Jessica Dunker, president and CEO of the Iowa Restaurant Association.

Dunker said 48% of restaurants in Iowa, while they are taking in revenue, are not turning a profit.

“It’s just a very difficult time, no matter … what the concept, no matter where you’re located, you are dealing with difficult economics right now, and that’s driven, depending on where you’re located and who you are, by either labor and food costs in that order, or food costs and labor in that order,” Dunker said.

She said she didn’t have statistics on downtown restaurants specifically.

She said what people are seeing in grocery stores when it comes to food prices, is happening to the restaurant industry as well but they have “hit the threshold of what people will pay.” 

“You combine that with … the perfect storm of consumer behavior, which is Gen Z does not gather and go out in the evenings like they once … did pre-COVID. People are drinking less.” And a portion of the population is on GLP-1 weight loss drugs like Ozempic, she said.

“There are a combination of factors all in play,” she said.

Chris Diebel, the founding partner of Bubba, a Southern comfort food restaurant on 10th Street, said he would characterize the downtown restaurant scene as “somewhat concerning.”

“We really want to see downtown Des Moines come back in a positive way,” he said.

He said daytime traffic is “really light,” and hard to schedule, because most downtown employers allow hybrid work.

“There’s certainly days where it’s barely worth being open for that lunch shift,” he said. “And so that’s something that all of us in the industry are looking at. Is it worth being open for lunch in downtown Des Moines?” 

He said Bubba is “trying to hold onto seven days a week, 14 shifts.”

“The idea behind that is, I never want the customer to ask themselves, ‘Is Bubba open today?’” he said. “So we know that we’re going to have a couple of lunch shifts that likely are duds each week, but the continuity is worth it for us, because we want the customer to know we’re there anytime they want to eat.” 

He said downtown is a “delicate ecosystem.”

“And when you throw it off, you feel it,” he said. “And when I say a delicate ecosystem, what I mean is it can’t just be corporate, it can’t just be residential, it can’t just be rent versus for-purchase condos. It’s got to be a blend of all of that.”

Scott Carlson, who owned the recently closed Americana, is on the board of the National Restaurant Association. He said an economist who works for the association spoke about the headwinds restaurants are facing. 

“Insurance is way up,” he said. “Energy is way up. Cost of food is way up. Cost of labor is way up. Cost of time is way up.”   

People might be asking why restaurants have become so expensive, and it’s because “everything we touched got really expensive,” he said.

“Tariffs aren’t the only blame, insurance isn’t the only blame, energy costs isn’t the only blame, labor cost, but they’re all converging,” he said.

Carlson, who also owns Gilroy’s in West Des Moines and Iowa’s Craft Beer Tent at the Iowa State Fair and RAGBRAI, said people are also drinking less, so he’s offered more alcohol-free cocktails.

“We’ve even talked about making lower alcoholic drinks,” he said. “So maybe instead of an ounce [and] a half of vodka, we use an ounce or even a half an ounce. So there’s still a little bit of alcohol, but not as much.”

Jeff Bruning, owner of Full Court Press, which owns several restaurants downtown including Hessen Haus and The Royal Mile, recently relocated Fong’s Pizza from the Court Avenue neighborhood to the East Village. He said they’re “quite happy with the move.” His company also brought in Denise Diaz to do coffee at The Empire, the new restaurant it opened in the old Fong’s location. The company also just renewed its lease at Iowa Taproom for five more years, he said.

“We’re a business that happens to be in the hospitality business, but we run our restaurants and bars as businesses first,” he said. “And it just happens to be the business we’re in. So we stick with a business mind, ‘How does the business work?’ and we go from there. We react to the supply chain issues. We … react to the economy, the changing desires of the community. Because if you don’t, if you’re not changing, if you’re not growing and changing, you’re spinning out and dying.”

Paul Rottenberg, president of Orchestrate Hospitality, which has several properties downtown including Centro, Django and Bubba, said things are not as good downtown as they were before COVID.

“If you go back in time, there was a time we had the Gas Lamp, Ritual Cafe, Proof and Americana in addition to Django,” he said. “And now we have Django and Black Cat Ice Cream. So, that’s a pretty significant change in terms of the amount of activity that was in that area. Hopefully that will continue to be offset by the fact there’s positive things happening on Walnut just south of there.”

He described downtown as being in a “transition phase,” with fewer people working downtown during the day and more people living downtown.

“I think restaurants are going to need to grow and adapt to that. At the same time, I think it would be appropriate right now for all of us to be looking at areas and thinking about ways that we can develop programs to encourage growth with street-level retail,” he said.

He said “having a long-term 20-year plan would be appropriate for us. I don’t think anything’s going to change overnight. If you’re talking about the shift that began with the beginning of COVID, that’s been five years.”

The most recent downtown plan, the Downtown DSM: Future Forward Vision Plan and Action Plan, was completed at the end of 2022, said Carrie Kruse, economic development administrator with the city of Des Moines.

“It’s really looking at trying to make downtown as attractive as possible, make sure we have the amenities and continue to grow our resident population,” Kruse said. 

The plan was a multi-year effort that started in the height of the pandemic, she said. 

“We really didn’t know what the long-term effects or impacts were going to be, and so I think the work started in 2019, wrapped up in 2022, and so we have to acknowledge that a lot has shifted and changed since even this plan was completed,” she said. “Downtown has had to evolve and adapt because of changes in work and the ability to work hybrid or remote. And our restaurants, our businesses, they’ve had to adapt with that new rhythm as well. But we are seeing, I would say, from my perspective, we’re seeing a lot of resilience and creativity in the restaurant and hospitality industry to really adjust to that new rhythm of the city.” 

She pointed to Bubba doing a different take on happy hours and themes with its menus, as well as Zombie Burger, which recently did a pop-up ramen kitchen.

“The city recognizes the importance that the restaurant industry plays to downtown and making downtown an attractive place for others to invest and contribute to the vibrancy down here, so it is a concern that we are paying close attention to,” she said.