Flagstaff’s Downtown Diner may be closing its doors for good. Since 1989, the restaurant has been a community staple, but times have changed, said owner and operator Nancy Tracy.
“I can’t do it physically anymore,” said Tracy, who has operated the restaurant with her brother since 2000. Before that, it was owned by her sister and brother-in-law.
For Tracy, Downtown Diner has become a family heirloom and she has cherished the restaurant as an active owner for over two decades.
“It seems to me that the best businesses are the ones that have owners who are there all the time,” she said.
She fondly remembers the “wonderful” employees she worked with over the years. Some still send her Christmas cards, she said.
“Dinner was fabulous when I was there all the time,” she said.
But in recent years, Tracy has had to take a step back due to health issues. In his absence, good help was hard to come by. Although it has always employed students, it has found that its turnover rate has increased and it struggles to retain quality employees at a sustainable rate.
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The problem is the disparity between wages and the cost of housing in Flagstaff, Tracy said. Despite adjusting to Flagstaff’s minimum wage increase, it acknowledged that it was still unable to pay employees at a rate commensurate with the cost of living and housing in the city.
The result is that its employees are often people who “don’t need the money”—students whose living expenses are paid for by loans or family support.
They don’t seem to care about work because “they just need to earn pocket money,” she said.
There might be some truth to that, said Nancy Baca, senior lecturer at Northern Arizona University’s WA Franke College of Business.
“Anyone who needs money has to make more than $15 an hour because you can’t live on $15 an hour,” Baca said.
Acknowledging this, Baca believes that Flagstaff’s minimum wage increase has contributed to the rising cost of living and exacerbated existing economic imbalances.
“Flagstaff is just a different animal in that we have a college town, a tourist destination, a second home, and on top of all that, we’ve had this minimum wage spike,” Baca said.
As a result, immense pressure is placed on long-standing businesses that have tried to keep the price of goods and services at a fair level.
For business owners, raising prices is “the only thing you can do,” Baca said.
The struggle to keep good employees could be more than a rote economic problem, said Fred DeMicco, a professor at NAU’s School of Hotel and Restaurant Management. Even if the hospitality industry begins to rebound from the COVID-19 pandemic, “revenues lost during the pandemic can never be recovered, and the hospitality industry cannot find enough workers after COVID-19,” he said. said DeMicco.
In addition to more than one million Americans who have died during the pandemic, an additional 3.5 million workers have left the U.S. workforce since March 2020, including about 1.2 million who have left the hospitality industry, creating ‘tremendous challenges for hospitality businesses,’ DeMicco said.
“Evidence suggests that many of them are leaving our hospitality industry for good,” he said.
Reasons for the hotel job exodus include changing values around work-life balance.
“Research shows that the average millennial worker isn’t interested in a job for life. Instead, they’re looking for flexibility and work-life balance,” DeMicco said.
Tracy’s experience supports this perspective.
“When I was younger, longevity at work meant something,” she said. “Now that doesn’t mean anything.”
Whenever a restaurant closes, you also need to consider ownership, said Allen Reich, a professor at NAU’s School of Hotel and Restaurant Management. Tracy’s recent inability to be hands-on at the Downtown Diner likely had a deleterious effect on the quality of operations, he said.
“If the owner is putting less effort and less time into the unit, that automatically tells me that there’s probably less training going on, less supervision of that training, and less supervision of the employees,” said Reich, adding that inconsistent training and supervision could lead to inconsistent quality and less valuable experience for employees hoping to learn skills and advance in the hospitality industry.
Tracy is more than ready to accept this responsibility.
“It all comes down to me as the owner,” she said.
The sad truth is that her health prevented her from giving the same energy to the family business. This reality is heartbreaking for her.
It is also a blow for the community.
Downtown Diner is “a Flagstaff institution,” said Alexander Ballesteros, who remembers frequenting its stalls with friends in high school. For Chelsea Du Pont, who worked at the Downtown Diner in the early 2000s, the restaurant was the start of her “love affair with the downtown atmosphere.” It’s a business that has touched many lives, Du Pont said. “There are very few people who don’t have a ‘Diner’ story.”
Despite its impending closure, Downtown Diner was kind enough to donate merchandise to a recent fundraising gala for the Flagstaff Auto Museum.
Since news of the Downtown Diner’s closure began to spread, Tracy said she’s been inundated with similar affirmations of support.
“There was a lot of outreach,” she said.
As a result, Tracy worked hard to find a successor who could keep the restaurant open. Given its location, with the right changes, there’s good potential for Downtown Diner to once again become a successful restaurant, Reich assessed.
Tracy also seems to recognize this and hopes the 33-year-old business finds new life within the family.
“We’re just trying to see if anyone in the family wants to try taking it,” she said. “I just can’t do it.”
Sean Golightly can be contacted at [email protected]ilysun.com