OAKLAND -- Park Way Drive-In (formerly Kwik Way) near the Grand Lake Theatre closed July 31 -- virtually overnight.
Customers stopping by for lunch Sunday were surprised to find a "CLOSED" sign in the window and the interior completely stripped of fryers, fridges and all other fixtures.
Oakland resident Kim Korth was out for a stroll and saw that the restaurant had closed.
"I can't believe that everything is gone, it's crazy," said Korth, who ate at the restaurant most weekends. "I loved the food, especially the chili and the rotisserie chicken. This is so sad to see that it's closed."
The retro fast food diner at 500 Lake Park Ave., between Grand and Lakeshore avenues, first opened in 1956 when it had two sister restaurants in Oakland -- the Park Way Drive-In being the sole survivor of the original Kwik Way chain.
Alex Hahn, who owns the property, as well as the adjacent parcel occupied by Bank of America, said that the restaurant owner Gary Rizzo owes him $119,000 in back property taxes. Rizzo is supposed to pay the real estate property taxes in addition to rent, which is common in the desirable shopping neighborhood, according to Pamela Drake of the Lakeshore Avenue Business Improvement District.
"Most of the leases are triple net, meaning the tenant pays both rent and the property taxes," Drake said. "In high-cost areas, landlords can demand that type of lease -- tenants go in knowing that."
Hahn said he was taken completely by surprise when Rizzo closed the restaurant.
"He left just like that without giving any notice. It's ridiculous. You have to at least notify the landlord," Hahn said. "I tried to make it work for him. I gave him two options -- pay me back the taxes or sell the business to somebody else."
He said that Rizzo left no forwarding address, but that he will try to contact him and talk about how to resolve the issue. Rizzo could not be reached for comment.
According to the Alameda County Tax Collector's office, property taxes for the diner are more than $24,000 per year (plus $1,892 for the adjacent parking lot), with an outstanding 2013-4 balance of about $27,000, including late penalty and interest.
Hahn said he paid that balance out of escrow on a recent refinance of Park Way Drive-In and Bank of America.
City Council President Pat Kernighan, who represents the Lakeshore district, said she's sorry the business was not financially successful, adding that the lease payments were "pretty challenging."
"The community appreciated that Gary Rizzo opened the restaurant after it was empty and blighted for some years," said Kernighan, adding that Rizzo invested $250,000 to fix up the diner.
"The community appreciated that he served healthy food and that he didn't have a drive-through, which would greatly increase traffic to an area that is already congested," Kernighan said.
She said that Hahn is now exploring the idea of a mixed-use project with retail and housing but is also open to finding another restaurant operator.
"He wants to talk with the community to find something that fits the neighborhood as well as his own business interests," said Kernighan, recalling that hundreds of neighbors rose up in arms back in 2003, when Hahn was going to lease the property to McDonalds.
"I think the owner learned from that experience that it's better to work with the neighborhood."
Ken Katz is the publisher of the Splash Pad Newsletter, a Lakeshore district resident and a big fan of Park Way Drive-In.
"Gary is a really hardworking guy. He was very much a hands-on restaurant operator," Katz said. "As far as we knew he was doing great -- there were always people at the restaurant.
"However, I'd heard he was having problems keeping up with the property taxes."
Rachel Royer and Jeffrey DiGregorio are frequent visitors to Oakland from their home in Santa Cruz and have eaten at Park Way Drive-In a few times.
"We were so excited to see this place reopen a few years ago -- it's a fantastic building," said Royer, who liked the diner's veggie burgers and fries.
DiGregorio said the restaurant was busy when they went there, but that it could have done more with its lakeside location and retro 1950s architecture.
"I hope they don't rip it down. These places are the soul of the neighborhood," DiGregorio said.
John Gordon, a self-described "foodie," has lived in the Lakeshore neighborhood for 20 years.
He said it's "embarrassing" how often he and his wife Rita ate at Park Way Drive-In.
"Rita picked up chili and beet salad at 9:20 p.m. the night before it closed and by noon the next day it was completely gutted," said Gordon, whose wife saw a large truck loading up refrigerators while she was there.
"It's shocking that it's closed -- we are in mourning."