Hamburg Inn No. 2, a fixture of Iowa City’s Northside for 75 years, will reopen this fall, the restaurant’s new owners said on Monday. Hamburg Inn closed suddenly in July. It was the second time it shut down this year.
“The Burg needs some fixing up,” Nate Kaeding of Gold Cap Hospitality said in a message posted to Hamburg Inn No. 2’s website. “We’re taking stock of the things that are broken along with the things that aren’t. The Burg doesn’t need new ideas. At least, we don’t think it does.”
Kaeding is also something of an Iowa City institution. An outstanding football player at Iowa City West High School and the University of Iowa, where he became the Hawkeyes’ all-time leading scorer, Kaeding remained active in Iowa City during his eight-year NFL career as placekicker. After his retirement in 2012, Kaeding focused largely on real estate development in the Iowa City area, and has served as part-owner of several local restaurants, including Short’s Burger and Shine, St. Burch Tavern and Big Grove Brewery’s Iowa City taproom.
He is working with some familiar partners on Gold Cap Hospitality, including Matt Swift, Ben Smart, John Maske and Stephanie Breitbach. Kaeding is the founding principal of the group, which was publicly launched on Monday morning with the news of the Hamburg acquisition.
Kaeding’s “lifelong engagement with his hometown” and “passion for local history” guide the “strategy and values at Gold Cap,” according to the company’s website.
“We believe that Iowa City is the best college town in America,” Gold Cap says on its site. “We’re here to play our part to make our hometown even better. The Gold Cap collective of restaurants, Pullman Bar & Diner, St. Burch Tavern, and Hamburg Inn No. 2, aim to be the front porch of downtown Iowa City.”
“A Gold Cap restaurant strives to be quintessential to the Iowa City experience,” Kaeding said in a LinkedIn post announcing the Hamburg acquisition. “Timeless, one-of-a-kind, and welcoming.”
Hamburg Inn No. 2 closed with no explanation in July, other than a note taped to its door that said, “Due to staffing issues, WE ARE TEMPORARILY closed until further notice.” But reporting by Iowa Public Radio’s Zachary Oren Smith following the closure indicated problems went well beyond any staffing issue.
“Since April, the restaurant has been in court over allegedly failing to make payments to a food supplier,” Smith reported. “U.S. Foods says Hamburg owner Michael Lee owes it nearly $15,000.”
“Lee is also behind on his property taxes and risks losing the property completely. [In June], the Hamburg was bought off the auction block for more than $16,000. Lee could still maintain ownership, but he only has two years to pay what he owes.”
At the end of last December, managers at Hamburg announced the restaurant would close indefinitely starting on Jan. 8. They cited a series of ongoing problems, including a ruptured sewer line that left Hamburg without working toilets, and the restaurant not making enough money to cover operating expenses or continue paying the staff.
The managers said those problems were compounded by their inability to get in touch with owner Michael Lee. Unsure if Lee was even in the country, they came to the conclusion that the situation was unsustainable, and decided to close the restaurant’s doors at the beginning of the new year.
The next day, an attorney representing Lee issued a statement saying the restaurant was not closing, but would be “operating at reduced hours … for the next few weeks to make updates.”
“There are no plans to close the restaurant,” the attorney said.
A day after that, the attorney issued another statement saying that maintenance issues would cause Hamburg to temporarily close. When it reopened in late February, Hamburg had a new staff, including a new manager. The previous managers “were let go because they decided to close the restaurant without talking to Michael,” the new manager told Little Village.
Lee purchased Hamburg from David Panther in 2016, as Panther, who grew up in the restaurant his parents had owned, was retiring. At the time of the purchase, Lee told the Gazette he was considering opening a second location in his hometown of Shanghai, and had plans for eventually creating a Hamburg Inn No. 2 franchise operation, that would have locations across the country. None of that happened, but in September 2017 he did open a second location, also called Hamburg Inn No. 2, on Iowa City’s east side. It closed in February 2020.
Fritz and Fran Panther opened Hamburg Inn No. 2 at its Linn Street location in 1948. Fritz’s brother, Joe, had opened the first Hamburg Inn on Iowa Avenue in 1935. Another brother, Adrian, soon joined Joe and eventually bought the restaurant from him. That first Hamburg Inn on Iowa Avenue closed in 1978.
When Fritz and Fran retired in 1979, they sold it to their son David, who ran it for the next 37 years. While David made some innovations, he managed the restaurant in much the same way his parents did.
Kaeding said on Monday the new owners were going to respect Hamburg’s tradition, but “might try a new thing or two.”
“We’re still figuring that out. A little change can be good. But just know we’ll be open first thing in the morning, serving breakfast all day like we always have.”
