DENVER (KDVR) — Several beloved local restaurants in Denver have closed over the past year, and according to some business owners, it’s because of the city’s minimum wage laws and rising costs.
From Cap City Tavern to Sushi-Rama, regulars’ go-to spots and community favorites are seemingly closing left and right. Why are they closing? Well, some say it’s because of Denver’s economic climate and labor regulations.
Denver enacted Revised Municipal Code Chapter §58-16 in November 2019 to annually adjust the minimum wage in Denver to the cost of living. This has ultimately increased the minimum wage to $18.81 and $15.79 per hour for tipped workers, and in 2026, it will go up even more.
While this increase is to combat Denver’s cost of living, and has made Denver’s minimum wage one of the highest in the nation in 2024, several business owners said the minimum wage was one of the reasons they had to close their doors.
Restaurants struggle with Denver’s rising minimum wage
Troy Bowen, owner of Noble Riot, is cautioning restaurateurs from setting up shop in the city after just closing his restaurant in August, after opening in 2019. He said it’s never one reason why a restaurant closes, but the minimum wage rate, along with the pandemic, safety and traffic issues, caused him to close in the River North Art District.
Bowen said it was hard to manage the minimum wage, which started to go up every year pretty quickly, with a large increase.
“These aren’t even, it’s not like they’re small things, they’re somewhat large jumps every single year. So, once you kind of get acclimated to one, it gets to the next level the next year, and they can’t really stop it because they have the way they implemented it in the first place,” said Bowen.
Bowen also said his restaurant in RiNo struggled as it’s not walkable on some sidewalks, and the area isn’t pedestrian-focused. Bowen said Mayor Mike Johnston focuses his energy on 16th Street, which helps with revenue across the board, but it takes away from other neighborhoods, with issues like traffic, lighting and safety.
Bowen isn’t the only restaurateur who’s experiencing problems with the minimum wage increase. The owner of Benzina, Bradley Anderson, was moments from closing for good on Colfax Avenue after rising costs of labor, food, rent and property tax.
“The state and city government have made it almost impossible for a single operator to survive in Denver,” Benzina posted on its Instagram when it announced its plans to close.
After trying to sell his restaurant and being told several other restaurants were also trying to get out of the business, Anderson found a way to stay open, but he said it was “counterintuitive” to the city’s plans for a livable wage.
To stay open, Anderson had to simplify the menu and cut the hours of preparation work in the kitchen, ultimately reducing labor.
“The city council wants, you know, they want their workers to make a living wage and to have a job, and if we make it so difficult to keep these people employed because of the cost, then the worst-case scenario happens where a restaurant goes out of business,” said Anderson.
Other restaurants also said rising costs caused them to close up shop.
Noisette Restaurant and Bakery, one of Denver’s Michelin-recommended restaurants, closed in the spring amid “ongoing challenges in the current economic climate.” Sushi-Rama closed in April, citing “an unsustainable economic landscape” along with “increased operational expenses and complex labor regulations.” Even Cap City Tavern, which was open for nearly 20 years, closed its doors in July after a lack of support for small businesses and financial struggles brought on by rising costs, city fees and declining foot traffic downtown.
Osaka Ramen, which closed in the winter, also said it closed due to rising costs.
“The decision to close comes amid significant challenges facing Denver’s restaurant industry, including rising ingredient costs, an evolving economic landscape, and the mandated tip credit on top of a high minimum wage,” Osaka Ramen said in a statement provided to FOX31.
Local shuttered restaurants share more issues
Rising costs weren’t the only issue for some shuttered local places.
Several other local restaurants shut down for different reasons, including leases that weren’t renewed at Breakfast Inn and Frank “The Pizza King.” Meanwhile, Littleton Cafe closed after the owners retired. Other restaurants like Three Saints Revival, Sullivan Scrap Kitchen and Namiko’s Sushi and Japanese Restaurant said they just never recovered from the pandemic. That said, not all these restaurants were in Denver.
Colorado Restaurant Association, the voice for the restaurant industry, noticed similar trends.
“It’s heartbreaking to see what’s happening right now. As more restaurants close, more people lose their jobs. Unfortunately, costs are out of control for restaurants, including insurance, rent, food, and labor, and menu prices can’t keep pace, or people will dine out even less than they already are. Local restaurants are operating on practically nonexistent margins; they can’t afford to feed fewer customers, but that’s what we’re seeing,” said Sonia Riggs, Colorado Restaurant Association President and CEO.
Anderson said the city can help restaurants from closing by reducing property taxes for restaurant buildings, reducing the minimum wage or passing a bill to increase tip credit.
While Anderson said it would lower employees’ salaries, some are already making $30 to $50 an hour, and this would keep the restaurants from closing, leaving employees with a job in the first place.
“It’s just a broken system right now, and nobody’s stepping up to fix it,” said Anderson.
FOX31 reached out to the Department of Economic Development and the Denver Mayor’s Office and is awaiting a response.
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