ENCINITAS — It’s the end of an era along Coast Highway 101 in Leucadia, after crews recently began demolition of Captain Keno’s Restaurant and the Portofino Beach Hotel in preparation for a mixed-use development.
The demolition of Captain Keno’s building, which opened as a nautical-themed restaurant and bar in 1970, began at the end of June and captured attention on social media. Blue construction panels now line the road from Shamrock Trailer Park to Cadence Cyclery, and construction crews have been clearing materials and grading the site.
Encinitas-based developer RAF Pacifica Group (RPG) purchased the land housing Captain Keno’s, Portofino Inn, and other businesses back in 2021 for a development known as the Moonlight Mixed-Use project. Project plans include 45 condo units, a mix of office and retail space.
The legacy of the nautical-themed Captain Keno’s dates back to the days before the city of Encinitas’ incorporation, with owner Gerry Sova opening the wood-paneled eatery and bar in 1970 using $100,000 in Las Vegas lottery winnings.
Over its 54 years of operation, Captain Keno’s grew to be a beloved dive bar and restaurant for locals. Despite having a loyal core customer base, the restaurant’s business began to taper off before it officially closed in October 2024.
Next door, Portofino Beach Inn had been shuttered for around a decade before being demolished, at one point becoming a site for graffiti, vandalism and homeless occupancy. The hotel lot was eyed for the development of a 35-unit boutique hotel by developer Hotel 101, before it was sold to RPG.
“I think it was time for it to go,” resident Jena Jonville said of the Portofino as she walked past the construction site on Tuesday.
While Captain Keno’s may be gone, various elements of the restaurant will live on locally. The eatery’s old red leather booths and various decor were purchased and relocated to Breaker’s, a new Hawaiian-themed restaurant opening on Santa Fe Drive.
In addition, Moonlight Mixed Use developer Adam Robinson purchased the liquor license and rights to Captain Keno’s name to incorporate the brand into the new project.
While the change along the 101 has been met with some resistance, Jonville said she was glad to hear that Captain Keno’s hadn’t been forced out, but that the owner had chosen to retire. However, she hopes that the project’s design will be more subtle than what was shown in previous renderings.
“I know people complain, but that’s life. It’s what’s happening,” Jonville said.
Other projects from RPG include the 330 S. Cedros project in Solana Beach, the remodeling of Encinitas Boxing and Fitness on Westlake Street, the Lift retail, restaurant, and office space development in Carlsbad, and several industrial developments in San Marcos, Vista and Escondido.
Robinson was unavailable to discuss next steps and the project timeline before publication.
