Why this high-profile Del Mar restaurant is closing its doors after more than 12 years

Cucina Enoteca Del Mar, a fixture in coastal North County for more than a dozen years, will soon be closing amid rising lease costs and a softening of sales in the years since the COVID-19 pandemic.

The closure is notable because of its high-profile ownership — the Urban Kitchen Group, helmed by Tracy Borkum, a longtime San Diego restaurateur. The restaurant group, which includes a large catering operation, has steadily expanded over the years, boasting eight other locations in San Diego and Orange counties, including its flagship restaurant, the more than16-year-old Cucina Urbana in Bankers Hill.

Located in the Flower Hill Promenade on Via de la Valle, Cucina Enoteca Del Mar filed a required notice with the state last week stating that it will be laying off 43 employees in March. An exact closure date has not been set, but the restaurant is expected to shutter sometime in mid-March, Borkum said.

In an interview Wednesday, Borkum acknowledged that the difficult decision to close her Del Mar restaurant was driven by a combination of factors, including a big jump in her property tax obligations following the sale of the Flower Hill center in 2022 and the challenge of operating a restaurant in a two-story, 8,200-square-foot space. The aging building, she added, also needed considerable work, and sales, which were not as strong as those at her other locations, had weakened.

“I think it’s a combination of everything,” Borkum said. “We had a great run there for a while, and then things definitely softened after COVID for us at that location. And when the current owner purchased the property (in 2022), our property tax dramatically increased. It probably tripled.

“My lease was up in November, so we would have had to renegotiate to stay there, and at 8,200 square feet, it’s cost-prohibitive to have a restaurant of that size. It’s also a very old buillding.”

Borkum’s restaurant is subject to what’s known as a triple net lease, common among commercially leased properties. Under such a rental structure, tenants are responsible for assuming their share of operating expenses, including property taxes, insurance and common area maintenance.

The Flower Hill Promenade sold in 2022 for $200 million, and before that had not changed hands since 2002 when the then slightly smaller center sold for $32 million. According to the San Diego County Assessor’s office, the Flower Hill property was re-assessed at $200 million in 2022, a notable jump from the previous assessed value of $73.1 million just a year earlier.

When Borkum’s restaurant lease expired in 2024, she extended it for one year and then rented month to month. During that time, Borkum said she began evaluating her options and her next steps.

She says she is intent on finding a new North County location and is not limiting her ongoing search to just coastal locations. Borkum is hoping to find a second- or third-generation space that’s closer in size to 5,000 square feet, she said.

“Costs are all-encompassing these days when making restaurant decisions, but this was more about the lease being up and the size of the restaurant, and sales weren’t equating to that volume,” she added. “Overall, as an industry, we’re having to make a lot of decisions that include the weighing of costs vs. profit. Obviously, there’s been a lot of increased competition in North County over the last decade, and that played a role in this. Our sales were not as strong compared to our other locations.”

Restaurant broker Mike Spilky of Location Matters says he’s not surprised by the news that the Del Mar restaurant is closing, given its physical size and the higher lease costs. He added, though, that had sales been especially strong, that could have made up for the property tax hike.

“I’m sure more than anything that this is probably just a decline in revenue for her,” said Spilky, who recently handled lease negotiations for the new owner of the Milton’s Deli space at Flower Hill. “It’s a great location, but the (Enoteca) building itself is much too large for most restaurant operators. It needs to be half the size for (Borkum’s) concept and the vast majority of other restaurant concepts, too.

“But at the end of the day, it’s all about sales, and if her sales don’t support that rent and the cost of doing business in that size of a location, then the business doesn’t work.”

Among Borkum’s other restaurants are Artifact + Café at Balboa Park’s Mingei Museum, The Kitchen at MCASD (the San Diego Museum of Contemporary Art), and Gold Finch Modern Delicatessen. The Urban Kitchen Group also has a venue at the Rady Shell.

The last Borkum restaurant to close was in 2023, when she opted to not renew the lease for Cucina Sorella on Adams Avenue. Borkum had continuously operated dining venues in the space since 1995, beginning with her very first restaurant, Kensington Grill, which was there for nearly two decades.