Joe’s Crab Shack, which has been targeted for closure for the past three years, is finally on its way out.
In a formal noticed filed with the state on Wednesday, the longtime restaurant on East Harbor Drive confirmed that it will be laying off all 61 of its employees and permanently closing in late August.
The closure, scheduled between Aug. 24 and Aug. 28, comes more than two years after its landlord, the Port of San Diego, decided it would be looking for a new operator for the bayfront location near The Rady Shell at Jacobs Park.
San Diego Port commissioners approved hiring a brokerage firm in 2022 to help find a new restaurant tenant, and by the fall of 2023, they had received proposals from eight interested operators, but their names were not divulged. At the time of the announced plans to transition to a new restaurant, port officials said they were hoping to find a tenant capable of bringing in significantly more revenue.
Port spokesperson Brianne Page said Thursday that the staff is currently in “active and confidential lease negotiations” with The Rustic, a Texas-based restaurant, to take over the Crab Shack site. Part of a Dallas-based restaurant group, The Rustic is known for its live music and homestyle American dishes.
The port staff expects that a lease agreement will be presented to commissioners at an upcoming board meeting, but Page did not indicate how soon that would be. Once the option to lease the restaurant site comes forward, there should be more details on when The Rustic would take over, she added.
Officials have not indicated how much more lease revenue they hope will be generated by a new tenant, but over time the financial return from Joe’s Crab Shack has been declining. Last year, the port received $118,000 in lease revenue from the restaurant, Page said. That compares with the $135,000 collected in 2019, before the pandemic.
Its lease is structured similarly to the rent agreements of other eateries on port-administered tidelands, with the agency sharing in a percentage of food and beverage sales.
Located behind the San Diego Convention Center, the seafood restaurant occupies the original home of the San Diego Rowing Club, a designated historic site that found new life as a Chart House restaurant in the early 1980s. It later transitioned in 2002 to a Joe’s Crab Shack. The casual seafood-centric eatery has been known for its buckets of seasonal seafood.