Denny's closes in South Lake Tahoe

SOUTH LAKE TAHOE, Calif. - On Monday morning, employees were caught by surprise when they were told the Denny's in South Lake Tahoe would be closing that day. After 40+ years in business, the franchisee closed the doors.

Franchise owner Paul Schmidt said it was multiple reasons leading to the closure, starting with COVID. He said sales had declined since the pandemic, and then the Caldor Fire didn't help. He said while the volume at the restaurant was never high, they did okay until people started staying away from South Lake Tahoe.

"We maintained until COVID," said Schmidt who had the South Lake Tahoe franchise for 25 years. "It's not one reason, there are many reasons."

Schmidt's lease was up at the end of 2023, and even though the landlord was going to help with lower rent, he couldn't justify staying open and continuing to lose money. He said they had a smaller local base than his Denny's in Carson City, but a higher tourist base. When fire, a pandemic, lack of snow or too much snow, affects those tourists, businesses such as his suffer.

"In a resort town, you're depending on tourists," explained Schmidt. "You hang on for the locals but if prices go too high they can't afford to go out to eat."

Higher minimum wage and new changes in 2024 didn't help. Passing on increased costs to the customer has its limits.

A challenging employee base also contributed to his departure. Finding staff with a high cost of living was always an issue.

A note on the door of Denny's thanked customers for their support over the years. It says after 40-plus years, they are closed.

The restaurant employed about 20 people.

Schmidt said another one of the reasons for leaving was the departure of nearby Rite-Aid. He said that was another hit with unforeseen circumstances but would reduce the number of people pulling into the shopping center.

Rite-Aid will be closed by Dec. 10. Much of the stock has been removed or sold and the pharmacy is open. The retail space of 9,850-14,425 SF is currently listed for lease.

The Denny's and Rite-Aid closures follow the recent closures of Izzy's Burger Spa, The Lake House, Lakeview Social, and the previous closures of one Raley's and K-Mart.

Izzy's owner said she hopes to find a new location.

Target will be going into the Stateline Raley's. A Target spokesperson said this week;

"We’re excited to bring an easy, affordable and convenient shopping experience to new guests in the South Lake Tahoe community with this new Target store. Located at 4000 Lake Tahoe Blvd, South Lake Tahoe, CA 96150. The store will be approximately 63,000 square feet. As we get closer to opening the store, we’ll have more specific details to share – including how the shopping experience will be tailored to serve local guests and the grand opening date."

Opening next week is the Margaritaville Resort in South Lake Tahoe, and work is moving forward with new retailers in the two old KMart buildings, the former Lily's Tires, and the former Runnels Automotive building.

There are currently 31 commercial spaces listed for lease on LoopNet, with the average cost ranging from $20 per square foot to over $60 per square foot on average.