Downtown Santa Rosa businesses grapple with challenges to stay afloat

Andrea and Jeff Ballus know how to turn an idea into a successful business. After they launched their first Sift gourmet cupcake shop in Cotati in 2008, the couple moved quickly to open the popular dessert bar in Napa, Santa Rosa, San Francisco and, most recently, in Petaluma.

After tasting that success, when the couple decided to launch a wine and oyster bar called the Jade Room Wine Bar & Oysterette on Fourth Street in Santa Rosa, a lot of people got behind it with financing and encouragement.

But a few months after they signed a commercial lease in 2017, a devastating wildfire burned sections of Santa Rosa and surrounding areas, destroying thousands of homes and turning the local economy upside down.

A planned six-week wine bar construction project turned into a 12-month slog, with the couple paying rent before finally opening in January 2019. The Jade Room, which cost them $500,000, was out of business by summer.

“We started out on fumes,” Andrea Ballus said. “That’s why we ran out of capital.”

Ballus said she remembers hearing a lot of local customers say something that portended the wine bar’s eventual closure: “I haven’t been to downtown Santa Rosa in years.”

In the past two years, a number of downtown restaurants and other businesses have closed despite the city’s $10.5 million Old Courthouse Square reunification, which was supposed to lead to a more vibrant downtown. Besides the Jade Room, the food and drink casualties have included Stout Brothers, Mercato, Tex Wasabi’s, La Vera Pizza and 2 Tread Brewing Co.

Gerard Nebesky was on the brink of shutting his Gerard’s Paella y Tapas restaurant on Fourth and D streets, but said last week he’s planning to do everything he can to overcome obstacles he and other downtown business owners cited: homeless people loitering, frustrating parking policies and a lack of foot traffic to lure new customers.

Nebesky said city officials and local developers are moving in the right direction to draw more people downtown, such as building mid-rise apartments. But he and other entrepreneurs say it will be years before those efforts pay off and something needs to be done now, before more small businesses close.

“There’s good stuff on the horizon. We just may not have the staying power,” Nebesky said. “There’s great shops downtown. We just need to get more.”

Downtown Santa Rosa operators wonder why smaller cities and towns like Healdsburg, Sonoma and Petaluma can enjoy far more vibrant downtowns than the county seat.

“For us to be upstaged by every other city and town in Sonoma County is wrong,” Nebesky said. “We should be on par with everybody else.”

The answer to that conundrum isn’t simple. Almost everyone interviewed cited similar challenges, but some decried the urban landscape which may be even harder to reconcile.

“We have too many banks downtown,” Nebesky said.

These include Exchange Bank, which had extended a business loan to the Balluses for the Jade Room, U.S. Bank and Bank of America around the square. Other banks close to the square are Wells Fargo and Luther Burbank Savings.

Lois Fisher, a local urban designer with Fisher Town Design, said Santa Rosa’s downtown was a victim of urban redevelopment in the 1960s and 1970s, particularly after the 1969 earthquake that destroyed a number of downtown buildings.