After seven years as one of San Clemente’s most popular and decorated restaurants, Gordon James Grill is shutting down citing the ongoing recession as the prime culprit. Gordon and Penny Rose notified their staff of up to 46 full-time and part-time employees three weeks ago about the restaurant’s imminent closure following unsuccessful efforts to emerge from bankruptcy after declaring in February.

The restaurant’s last day is likely to be July 29 following a court hearing. It’s possible it will remain open longer while the bank decides its fate.

“Our dream has turned into a nightmare,” said Penny Rose, who, along with her husband Gordon and several partners, opened the 180-seat, 6,500-square foot restaurant on January 5, 2004. The restaurant enjoyed immediate success in its completely renovated location at 110 North El Camino Real, and quickly became a favorite for both the high-end dining and bar crowd. The restaurant each year has won SC Times Golden Ole awards voted on by its readers, and earned a 4.5 out of five stars in the Restaurant Spotlight.

“We were profitable from the minute we opened,” said Gordon Rose, who opened the restaurant after enjoying a nearly 40-year career in the restaurant business. “In 2007 we had our top sales year, but in 2008 we started to see sales come down and 2009 was just ugly.”

Despite all efforts to tighten up expenses—including taking over chef duties and doing all of the shopping personally—the recessionary pressures continued to mount, according to Gordon. “Unfortunately it’s like the perfect storm,” said Penny. “We couldn’t get the concessions we needed from our landlord, 12 new restaurants opened up in town, and when we thought the economy would turn in 2010, it didn’t.”

Of those 12 new restaurants, one (SeaSmoke in Talega) has already shut down, and Gordon Rose has first-hand knowledge of other restaurants struggling to stay afloat in San Clemente. He doesn’t blame competition as the cause of his restaurant’s closing, but said that high-end restaurants are especially hard hit during economic hardship.

“A lot of restaurants are hurting,” said Rose.

Having to declare bankruptcy and then ultimately lose their business has been a devastating blow to the Rose’s. The restaurant was to last them through until retirement, but now the two will have to start all over again.

“Never in my life have I owed money to anybody,” said Gordon. “We were embarrassed by [the bankruptcy]. We’re in our 50s and now we have to start over again.”

As the Rose’s and the restaurant’s staff work though the final weeks, the couple—who have lived in San Clemente since moving here seven years ago from Laguna Niguel—said they’ll miss their staff (“They are like a second family to us,” said Penny) and the “heartbeat of the restaurant when it’s jam packed on a Saturday night.”

“We’ve had a very loyal clientele over the years,” said Gordon Rose. “We as a couple really appreciate all the people who’ve reached out and all the friendships we’ve made.”

Note: The Rose’s wanted everyone who purchased a Gordon James gift card since June 1 to know that they voided all charges on the credit cards, ensuring that no one was charged.