As retail dries up, Pacific Grove is shifting toward restaurants and drinking establishments.

A successful downtown Pacific Grove is so close, City Manager Ben Harvey can taste it. “We’re one more brewpub, one wine tasting room, one more hip restaurant away,” Harvey says. It’s one of his highest priority goals to get downtown hopping and tax revenues flowing.

Within the last couple of years, P.G.’s downtown has seen three new restaurants open to critical acclaim and generating buzz in a community that’s been wringing its hands over how to generate more revenue but can’t agree on a way to do it. While some residents insist downtown should serve them as well as tourists, business owners contend there just isn’t enough foot traffic in a town of 15,000 people to keep their cash registers ringing.

Part of the issue has been the loss of retail stores – Pier 1 is the latest casualty as that company shuts down stores nationwide – replaced in recent years by 16 real estate offices in downtown alone. And yet, at least two recent attempts to forward an ordinance to City Council limiting non-retail businesses downtown have been shut down, in part by building owners who don’t want to let spaces stay vacant for long.

Enter those three restaurants on P.G.’s main street, Lighthouse Avenue – Poppy Hall, Wild Fish and Monarch Pub – and suddenly it became attractive as a dining destination. Poppy Hall bills itself as a “community gathering place,” and it has become a favorite hangout for locals, like on Monday nights when they serve $1 oysters with $5 glasses of Cava.

Co-owner and Chef Philip Wojtowicz, formerly of Big Sur Bakery, was ready to leave the busy tourist spot for a neighborhood location. He spent four years trying to get into P.G., seeing the downtown as an “up-and-coming type of place.” With co-owner and fellow chef Brendan Esons, they want to lead by example in lifting the entire district. “We want to be the beacon of Lighthouse,” Wojtowicz says.

“This is everything we would hope for our downtown, right here in this microcosm of a restaurant,” Harvey says. He meets weekly with his staff on how to attract similar businesses that might entice people to walk through the downtown from one spot for a drink, maybe, and then on to dinner at another.

The Monterey Bay Laundry building (at 511 Lighthouse Ave.) could prove a viable site for a brewpub, since it has water credits. “The sky’s the limit,” says a commercial real estate sales listing about the property, currently under contract to an undisclosed prospective buyer. The current owner’s agent did not return calls about potential future plans.

It’s not just eateries and drinking establishments that will lift downtown, says Pacific Grove Chamber of Commerce President Moe Ammar. “What Pacific Grove needs is what Pacific Grove is going to get and that is a hotel downtown,” Ammar says, referring to the 120-room Hotel Durell, on Central Avenue.

The hotel was hotly contested by a group of residents but supported by the business community, hoping it will bring foot traffic. Residents complained it would bring vehicle traffic. The hotel plan was approved by the P.G. City Council by a 4-1 vote in 2018.

Hotel Durell’s developer, Nader Agha and his company Holman Building Associates, entered into a sales deal with investors contingent on water becoming available. That deal is now the center of a dispute in a lawsuit between the parties.

Ammar expects after the suit is settled the hotel will move forward, possibly within the year.