2011 October: WORK IN PROGRESS

Goat Hill Pizza sits high atop a hill in San Francisco, out of the hustle and bustle of the tourist-filled piers and the busy downtown commerce. Here, it seems, life is quieter. Co-owner Karen Monley carries a hardback novel tucked under one arm as she hugs an employee she hasn’t seen in a while on her way to sit down with partners Loris and Joel Lipski during our summer interview. Missing are the remaining partners, Philip DeAndrade (who was out of the country at the time of our visit), Monley’s husband, Mike, and Ruth Ann Dickinson. Friends for more than three decades, this eclectic group planted the seeds for a restaurant, a pizzeria to be exact, and have watched it –– and the surrounding neighborhood –– flourish.

Partners who knew each other in a six-degrees-of-separation way, each brought something different to the business at its inception in 1975 –– DeAndrade, who went to college with Joel Lipski, had experience working for a pizza chain, where he met Monley, who was in the insurance industry at the time. Monley and Dickinson were friends, and together the group scraped together the money to open a restaurant in the working-class Potrero Hill section of San Francisco. “We wanted pizza, and you’d have to go so far to get it. You’d come back from getting the pizza, and all the cheese would be on top of the box,” Monley says.

The Lipskis lived in the area, which in the 1970s was considered a little on the unsafe side. “We were warned against living in the neighborhood,” Joel says. “Since that time, it’s really switched. It’s very high-end. It’s very expensive to buy anything around here, or rent.”

Over the years, they’ve all had a hand in running the day-
to-day operations. “For the longest time,” Loris says, “we didn’t take any money out of the business.” They had a hand-written menu, and for decades the restaurant served as a political and social hangout for the owners and their friends. Kids would stop by to pet the goats –– a throwback to the 19th century when Russian immigrants raised the animals in the hilly area –– and artists and musicians used the restaurant as a creative outlet.

When business became overwhelming about three years ago, the owners recognized a need for better organization and they hired General Manager Elena Neustadt. “Elena has really helped turn the culture around,” says Joel. “We had a pretty loosey-goosey approach to this … we tolerated poor performance.”

Adds Loris: “We ran it like a social service agency.”

Monley says in the last decade, they realized they had some debt –– incurred on credit cards through banks to open a second location because they couldn’t secure a loan –– that needed to be reconciled and vendors’ bills needed to be paid. Since then, they formed a corporation and handed off the day-to-day operations to Neustadt. “We tackled vendors first,” Joel says, “and we started paying something more than the minimum on the credit cards.”

Loris says they also realized they were top-heavy in management and cut a position, and they hired an outside accounting firm to take over the books.

Today, Goat Hill grosses about $2.25 million annually, with $980,000 coming from a delivery and catering unit on Stillman Street in the SOMA district of San Francisco. The secondary unit, which also serves as a commissary, was added because “so much of our deliveries are to large offices,” Joel says. “We’ve expanded it out to delivery all over the city, but still the bulk of it is to businesses.”

“We’re talking 30, 40 pizzas at a time,” Neustadt adds. That location may eventually add carry-out and perhaps take-and-bake in the future, but for now it serves as a commissary and delivery base for the original location.

Goat Hill employs a staff of about 40, and “we’ve collected wait staff who have character and big personalities,” Monley says. They encourage longevity by offering shared medical and dental plans for long-term employees as part of a citywide mandate, but “we spend probably five to eight times that in medical coverage,” Joel says. “The requirement is typically what our competition is paying.”

Though they used to source their dough from a local bakery, the Stillman commissary affords them the ability to make the dough themselves, and “the dough is kind of our trademark,” Joel says. “It’s sourdough.” They’ve since started making their own sauce, dressings and soups in addition to the pizza they bake in a brick oven. Most popular is the Meat Lover’s (salami, pepperoni and Italian sausage at $20.95 for a 14-inch large) and the Special Combination, a fully loaded pie with salami, pepperoni, Italian sausage, ground beef, mushrooms, green pepper, green onion, black olives and garlic at $24.85 for a large.

For 10 years, they offered a full brunch, but it was labor-intensive and San Francisco became a health-conscious city, so they axed it. “You had to break down the whole kitchen and start it up again,” Monley says. They have also tried adding entrées like eggplant Parmesan and curried chicken, but while they sold well the owners felt these detracted from the company’s pizza-heavy concept
(75 percent of sales is pizza based).

To increase sales on traditionally slow Monday nights, Goat Hill hosts a “Neighborhood Night” with all-
you-can-eat pizza at a prix-fixe price. Servers bring around slices of different gourmet pizzas to the tables for sampling. It’s a great way to get customers to try pizzas they wouldn’t normally buy as well as gauge interest in varieties the restaurant might menu in the future.

Beer and wine are available, but no liquor is offered. “It’s a pizza parlor,” says Monley, “and we didn’t want to deal with drunks.”

Aside from the obvious word-
of-mouth generated by a restaurant that has been in business for three decades, Goat Hill trades pizza for advertising in neighborhood publications. They also hold fund-raisers for schools and host political events.

“We have a relationship with Groupon, but we’re not sure we’re going to continue that,” Joel says, adding that the majority of Goat Hill’s business comes from repeat customers. They did some leafleting in the early days, but mailers are more relevant for today’s Goat Hill, especially advertising the new Stillman delivery site. They also have a social media presence on Facebook and Twitter.

A musician who has been with the company for 35 years provides live entertainment, and they feature local artwork as well. Neustadt is considering wrapping their delivery vehicles after picking up the idea at a trade show.

Today, is Goat Hill ready for multiple units? The owners are frank in the fact that they “haven’t come to a consensus because we focused on getting out of debt and getting the restaurant in a good place,” Joel says. “There is some interest in getting the business into a position where it is attractive to be sold. There is some interest in getting to where it might provide an ongoing stream of income for the ownership, and whether that (might be) opening another location … we haven’t had that conversation yet. We will soon.”

For now, battening down the hatches both financially and operationally is the first step, and Monley, Neustadt and the Lipskis take a moment to reflect on Goat Hill’s past and its future.

“We’re not 30 years old anymore,” Monley laughs.

Adds Joel: “And we don’t have another 30 years to wait!”

Mandy Wolf Detwiler is managing editor at Pizza Today.

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