The California Avenue building that for decades housed the beloved Antonio's Nut House bar would be partially demolished, reconstructed and furnished with a new dining pavilion under a plan recently submitted by the property owner.

Located at 321 California Ave., near Birch Street, the building has been vacant since the Nut House shuttered in August 2020 after nearly 50 years of serving beer, liquor and peanuts to an eclectic clientele that included local residents, employees and entrepreneurs such as Mark Zuckerberg and Elon Musk. Store owner Jess Montooth, who operated the bar with his siblings after their father and the establishment's longtime proprietor Tony Montooth passed away in 2017, attributed the decision to close the bar to the financial losses that the business suffered because of COVID-19 restrictions on indoor dining.

Now, the property owner has a new vision for the building, which was constructed in 1938 to serve as a drive-in Safeway grocery store and then expanded in 1969 with an addition at the rear of the property, according to a report from Page & Turnbull, the city's historic preservation consultants. The new project involves demolishing the 1969 concrete-block addition in the back of the building while creating a new dining area along Birch Street.

The building would retain restaurant use, though an operator has yet to be selected, according to the application that Ken Hayes, project architect, submitted on behalf of the property owner, Storm Land LLC.

The biggest changes to the structure would occur along Birch, with the building adding a second entrance to the outdoor dining pavilion, a portion of which would be covered with a roof, according to the renderings of the proposed remodel. The proposed pavilion "provides an all-weather gathering space connected internally to the existing building and externally to the new courtyard," Hayes wrote. The pavilion, the courtyard and a new outdoor lounge also would take over much of the area that has historically served as a parking lot. The outdoor lounge will be located at the northwest section of the site, near the current entrance, and it will provide "a place for guests to linger temporarily before moving on to the restaurant or courtyard," Hayes wrote.

While the building at 321 California Ave. is not listed on the state or local registries of historic places, the original portion of building has "historical significance because of its original role as a Safeway drive-in store," according to Page & Turnbull. Safeway ultimately left the property in 1950.

"This type of drive-in grocery store, of which an off-street parking lot was a distinguishing characteristic, is a precursor to the strip mall and modern supermarket grocery store," the Page & Turnbull report states.

Since Safeway's departure, the building has housed numerous restaurants, including the Cal Hofbrau and Red Hat Restaurant in the 1960s, according to the report. In 1969, a restaurant called the Annex moved in and constructed the concrete-block addition in the rear for use as a cardroom. Two years later, Antonio's Nut House moved in.

To honor the building's historic significance as a drive-in grocery store, the consultant recommended retaining and restoring its original architectural features, including the awning, the storefront windows, the parapet walls and the decorative horizontal bands, as well as rehabilitating the side entrance that currently faces a parking lot. The consultant also recommends replacing the solid door at the side entrance with a glazed door to "restore the prominence and more welcoming character of this entry" and retaining open space near the side entrance to "convey (the) building's original design as a drive-in supermarket."

Under the proposed reconfiguration, the site around the building would include 11 parking spaces (down from 14 currently), which would be accessed through Jacaranda Lane, which is between the building and the city's newly constructed garage. Six of these would be in a "tandem arrangement," according to the plans, and one would be designated for "clean air vehicle" parking.

The project is being pitched at a time of transition and uncertainty for California Avenue, long known as Palo Alto's "second downtown." The commercial strip received a major uplift nearly a decade ago, which included new streetscaping, public art and new plazas, and it has served as a popular destination for outdoor dining during the COVID-19 pandemic. While the City Council chose to reopen University Avenue to traffic late last year following its experimental "Summer Streets" program, council members opted to keep the central portion of the California Avenue strip off-limits to cars in hopes of boosting the district's economic vitality.

But while outdoor dining has been a boon for some businesses, others have shuttered over the course of the pandemic. After the Nut House closed shop, Subway and The Counter followed suit. Bank of the West also has announced its plans to leave early this year.

While Local Kitchens, a food pavilion, has since filled the space left behind by The Counter, the district continues to be beset by vacancies. More than a dozen buildings displayed "For Lease" signs at the end of 2021.

The council, for its part, has yet to decide on the long-term fate of the city's only car-free promenade. In September, council members agreed to keep California Avenue closed to cars until June 30, 2022. They also agreed, however, to consider early this year the prospect of keeping the street closed permanently.