Joe’s Crab Shack Set to Close Permanently in San Diego

News Summary

Joe’s Crab Shack on East Harbor Drive is closing permanently, leading to the layoff of 61 employees. The Port of San Diego aims to find a more profitable tenant as negotiations with potential operators proceed. This closure follows the parent company’s bankruptcy and highlights ongoing challenges in the restaurant industry amid changing consumer preferences.

San Diego – Joe’s Crab Shack, a long-standing restaurant on East Harbor Drive, is set to close permanently between August 24 and August 28, 2023. The closure comes after a prolonged effort by the Port of San Diego, the restaurant’s landlord, to find a new operator for the location, which has been ongoing for over two years.

This closure will lead to the layoff of all 61 employees currently working at Joe’s Crab Shack. Plans for finding a new tenant have intensified since 2022, when San Diego Port commissioners engaged a brokerage firm to assist in identifying potential operators for the site. By Fall 2023, proposals from eight interested operators were submitted to the Port, although the names of these operators have not been disclosed to the public.

Port officials are keen on acquiring a new tenant that can generate significantly greater revenue than Joe’s Crab Shack, which has reported declining lease revenue over the years. For instance, the Port received $118,000 in lease revenue from Joe’s Crab Shack in the past year, a decrease from $135,000 in 2019. In 2022, Joe’s Crab Shack paid approximately $137,000 in rent.

Current negotiations are underway with a Texas-based restaurant called The Rustic, known for its American dishes and live music. The lease agreement proposal for The Rustic is expected to be presented at an upcoming Port board meeting, indicating active efforts to replace Joe’s Crab Shack with a more profitable establishment.

Joe’s Crab Shack has been a tenant at the site for over 20 years, taking over what was previously a Chart House restaurant back in 2002. This location is particularly challenging due to its visibility issues; it is situated behind the San Diego Convention Center, making it less accessible to potential customers. As a result, it has faced difficulties in attracting a larger clientele.

Adding to the ongoing changes, the San Diego Symphony Association has also expressed interest in taking over the site currently occupied by Joe’s Crab Shack. However, the Port has not specified a timeline for a decision regarding potential new tenants or for the official closure of Joe’s Crab Shack.

The impending closure follows recent financial troubles for Joe’s Crab Shack’s parent company, Ignite Restaurant Group, which filed for Chapter 11 bankruptcy protection on June 6, 2023. The group is in the process of selling off locations as part of its restructuring efforts, and the fate of various restaurants under its management is being navigated through bankruptcy court proceedings. Previously, Ignite Restaurant Group operated multiple locations, but Joe’s Crab Shack in Mission Valley has also closed its doors amid these financial challenges.

Houston-based Landry’s Inc., which previously owned Joe’s Crab Shack, has filed a claim relating to its purchase, signaling ongoing complexities around the ownership and future of the restaurant chain.

The closure of Joe’s Crab Shack marks the end of an era for the popular seafood restaurant, highlighting broader trends in the restaurant industry amid changing consumer preferences and economic pressures. The Port’s efforts to secure a new tenant signal an ongoing commitment to revitalizing the Bayfront area and enhancing its appeal to both residents and visitors.

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Additional Resources

• San Diego Union-Tribune: Joe’s Crab Shack Closure
• 10 News: Port of San Diego Searches for New Operator
• NBC San Diego: Mission Valley Joe’s Crab Shack Closure
• Restaurant News: Joe’s Crab Shack Veterans Day Meal
• San Diego Union-Tribune: New Operators for Joe’s Crab Shack Site
• Wikipedia: Joe’s Crab Shack