Once, the celebrity chefs Roy Choi and Daniel Patterson had a beautiful dream: they were going to open a restaurant on an unlovely street corner in Watts, the most depressed neighborhood in Los Angeles, and use it as the launchpad for a revolution to bring healthy, delicious, affordable food to every underserved community across America.

They called their restaurant LocoL, and on the day it opened in 2016 a crowd of well-wishers, political leaders and Hollywood celebrities solemnly listened to Martin Luther King’s I Have a Dream speech before tucking into sandwiches and burgers made with artisanal bread, lovingly created tacos called “foldies”, bowls of “messy greens” and fresh-blended juices and agua fresca.

The staff were all from housing projects in Watts. Many of them had done prison time and were looking for redemption. Choi, the bad-boy LA chef best known for launching a national food-truck craze, and Patterson, the fine-dining guru from San Francisco, took it upon themselves to teach an inexperienced crew how to cook and run a restaurant so they, too, could be part of a revolutionary vanguard.

The community was all for it, and the line stretched around the block. “We are here,” announced a mural on the side of the squat black building, “changing lives, building communities”.

Facebook Twitter Pinterest Roy Choi, back and center left, and Daniel Patterson, center right, with the LocoL team. Photograph: Barry J Holmes/The Observer

Only it hasn’t turned out that way. The initial enthusiasm ebbed after just a few months. Online reviewers complained about the service and the consistency of the food, and the complaints were echoed in a devastatingly negative write-up in the New York Times that prompted an angry local backlash but no discernible uptick in business.

Choi and Patterson experimented with menu changes, introduced more fried items in the hope they’d be more popular, closed down for a month to rethink their approach, and opened other branches in northern California in the hope of subsidising the Watts operation.

They ended up raising their prices more than they wanted to and now, after less than three years, they have closed the restaurant again, along with its satellites in Oakland and San Jose. LocoL still has a food truck, and the Watts building has been converted into a catering and event space, but the future of the venture is mired in doubt.

“We are not dead but we do need help,” Choi wrote in one of a flurry of Twitter and Instagram posts running a gamut of emotion from heartbreak and self-reflection to defensiveness and anger at food writers he suspected of willing LocoL to fail. He also admitted: “The truth is we ran out of money.”

In a brief exchange with the Guardian, he added: “We are taking a moment to keep this thing alive.”

Beyond LocoL’s misfortunes, the bigger question is whether the whole project of bringing better food to so-called “food deserts” – underserved urban areas with few restaurant options beyond fast-food chains and only second-rate discount supermarkets – is inherently futile, or if there is in fact a successful way of doing it and Choi and Patterson simply have not found it, yet.

Experts and entrepreneurs differ widely on the answer. A recent academic study suggested, controversially, that poor people don’t have the education or food culture to know what’s good for them, even when it’s offered. Another study suggested, conversely, that the stereotype of poor people subsisting on McDonald’s is wrong: they eat less fast food than middle-income groups and only slightly more than richer Americans.

Facebook Twitter Pinterest Kids eat at the opening of LocoL in Watts, Los Angeles. Photograph: Barry J. Holmes/Barry J Holmes ©

In Watts itself, local residents said they and their neighbors were all in favor of greater variety and higher-quality food – and in fact they’ve had access to it at neighborhood soul-food restaurants like Jordan’s Café, which closed in 2010 after a 68-year run, and the Watts Coffee House, which opened in 1994 just a few steps away from the LocoL building and draws an enthusiastic crowd for everything from its fried chicken and waffles to its salads.

“If the food is good, they’ll come,” the diner Teresa Roston, a hair and makeup artist, said over lunch at the Watts Coffee House.

Desiree Edwards, the Coffee House owner, was blunter still. “People call this a food desert, but I don’t feel that way,” she said. “The people that worked over at LocoL – they ate here.”

Nobody, including Edwards, would claim that Watts has a thriving food scene. She has to drive 15 miles to buy ingredients – especially herbs, fruit and vegetables – that she can’t find at the one local discount supermarket, Food 4 Less. Across the street from the Coffee House are a doughnut shop and a fried chicken outlet that are certainly cheap – 21 nuggets and fries for $8.29 – but offer little beyond carbohydrates and fats. On the day the Guardian visited, a drug-addled young man was writhing on the ground outside the chicken shop, and a young woman was panhandling from the doughnut buyers.

Poverty is about being poor on time as well as poor on money Sam Polk

The problem, according to the food philanthropist and entrepreneur Sam Polk, is primarily economic. Grocery stores operate on low margins at the best of times, and in low-income neighborhoods those margins can quickly dwindle to nothing – as Britain’s Tesco found out when it launched its short-lived US subsidiary, Fresh & Easy, with the aim of expanding into food deserts. Restaurants, meanwhile, tend to have high property costs – especially if they want to be well-placed for parking, foot traffic and other factors – and high labour and raw ingredient costs that become almost impossible to square if the challenge is to provide full meals for around $5.

Polk has launched a chain of food outlets called Everytable that borrow their economic model partly from fast-food chains and partly from British prepared-foods businesses like Pret a Manger and Marks & Spencer. He makes cheap, nutritious meals at a central site – thus cutting delivery and kitchen rental costs – and delivers them to branches in Los Angeles that cover the socio-economic gamut. He is opening a branch in Compton, the birthplace of gangsta rap, next month and aims to open in Watts soon after that.

Facebook Twitter Pinterest Roy Choi cuts the ribbon at the restaurant’s opening. Photograph: Audrey Ma

“Poverty is about being poor on time as well as poor on money,” he said. “What’s the attraction of fast food? It’s cheap, sure, but it’s also shelf-stable, so you can put it in your fridge without worrying it will go bad, and it saves time for people who may be working several jobs. It’s also true that when you are under emotional and financial stress, you look for comfort foods.”

Polk is betting that if he meets most of those needs, he can make a success of healthier food. The way his stores are set up, customers grab items and either microwave them on site or take them to go. They can also buy several meals in advance so they have them at home whenever they want them.

Will his model work where Choi, Patterson and others have failed? Only time will tell. “I’m nervous about the Watts store,” Polk admitted. He was not sure there was enough money in the community, and he suspects he’ll have to run more of a grocery so he can accept food stamps.

But the issue, he insisted, was not that people were uninterested in healthy food.

“The problem with LocoL,” he argued, “is that they ended up serving fast food, just like everyone else, only they were charging $8 a burger, which is basically unaffordable. Personally, I’d be more confident being the only salad restaurant in Compton than the 55th burger place.”