Longtime Palo Alto icon Hobee's California Restaurant will close at Town & Country Village shopping center in January, property owner Ellis Partners announced on Thursday, Sept. 27.

Hobee's Stanford has been at the corner of Embarcadero Road and El Camino Real since 1984, serving up its well-known blueberry coffee cake and other homey dishes. The company, which was started by Paul Taber and his family in 1974 in Mountain View, expanded to open a total of nine restaurants in San Jose, Campbell, Sunnyvale, Cupertino, Los Gatos, Redwood Shores and two locations in Palo Alto, at 4224 El Camino Real and 67 Town & Country Village.

Hobee's President Ed Fike said he expects to close the location after early January, and the company will try to employ the 35 Town & Country workers at its other restaurants.

Town & Country wanted Hobee's to contribute to renovations that are planned, which included knocking down walls and reconfiguring Hobee's space. Combined with a new lease at a higher rent and the costs of displacing employees for up to six months, the company decided it could not afford to stay, he said.

"It would have taken many, many years to be profitable again. There were lots of questions. We absolutely did the numbers, and they just didn't pencil out," he said.

He said that after a 1996 fire, many Town & Country customers shifted to Hobee's El Camino location. But he admitted the staff would miss their Town & Country patrons.

"That location has lots of great memories. We really appreciate the patronage," he said.

The company is scouting for a new Palo Alto location, but for the time being the El Camino restaurant "will be the new Hobee's capital," he said.

Jim Ellis, managing principal partner of Ellis Partners, said that the company is finishing up nine years of retrofitting and upgrades.

"We have a lot of work to do in this section of the project. It's something we've been planning for a long time," he said.

Caroline Morris, vice president of asset management, said the same work was done to the other buildings at the center over the past few years. Ellis and Morris said they tried to work with Hobee's and worked with all of the other tenants in the building to renew leases and to relocate them.

Ellis said that Fike "is a smart, thriving local entrepreneur. We both tried to reach favorable terms."

Ellis Partners started renovating what was a flagging retail center in 2004. Seismic upgrades, renovations, new landscaping, seating and gathering spaces, and an influx of new stores and restaurants, including anchor store Trader Joe's, has revitalized the center, which is now bustling.

In early 2013, Ellis will work on the last piece of the upgrade, rehabilitating a portion of the building that also houses Jamba Juice and Halo Blowdry Bar. When the work is completed, the building will reopen and include Gott's Roadside, a gourmet hamburger restaurant that serves updated American and California classics for breakfast, lunch and dinner. Gott's will take less than 4,000 square feet of space and could open next summer, Morris said. The company hails from St. Helena in Napa Valley.

Jamba Juice will relocate soon to its new location across from the newly opened Asian Box restaurant. Halo Blowdry Bar will be doubling in size at a new location elsewhere on the property.

"There's been a lot of transitions, and we appreciate the community support," Ellis said.

Hobee's has won the "best breakfast" category of the Palo Alto Weekly's annual "Best Of Palo Alto" readers' choice contest for numerous years.

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