The plug has been pulled on an Austin institution after almost 30 years. Shady Grove, the pastoral comfort food restaurant that was home to one of the longest-running free live music series in Austin, has closed for good, restaurant co-owner Rusty Zagst told the American-Statesman on Monday.


The restaurant’s owners had faced mounting challenges from increasing property taxes on the land they lease, and Zagst said that though he had streamlined operations to position the company for a successful year, the crippling economic effects of the coronavirus pandemic left the owners no choice but to close.


Shady Grove joins Magnolia Cafe West and Threadgill’s on the list of quintessential Austin restaurants that have made the decision to shutter in the face of the economic trauma that accompanied the coronavirus.


Shady Grove might not have been the most critically acclaimed restaurant or the city’s premiere music venue, but it was much more than the sum of its parts. With its family-friendly vibe, unfussy Southwestern comfort food and long-running Unplugged at the Grove music series, the restaurant at 1624 Barton Springs Road was a uniquely Austin treasure that felt like the city’s unofficial backyard.


Chuy’s founders Mike Young and John Zapp opened Shady Grove, with its recognizable lariat signage, in 1992, and the next year the restaurant started its music series set beneath a 100-year-old pecan tree, attracting some of the biggest names in Americana music.


"We created magic there on a regular basis," series music programmer Marsha Milam said.


The series ran every Thursday from April through September and featured acts such as Ray Wylie Hubbard, Alejandro Escovedo, Ryan Bingham, Jimmie Vaughan, Marcia Ball, Rhett Miller, Bob Schneider, Sarah Jarosz and dozens more. The combination of big names and intimate outdoor space made Unplugged at the Grove a concert series unlike any other in town.


Escovedo played the Unplugged at the Grove series most years in its 26-year run.


"We used to have some amazing shows there, with just a real sense of everyone being there for the right reasons and enjoying the South Austin vibe," Escovedo said Monday. "The thing I loved most about it was that it just had such a sense of community, with people from my neighborhood when I lived in 78704. I lived right up the hill, and I’d see old friends and family. All my kids could come to that, and (later) all my grandkids would come, too. It was a real family affair for us."


Bilingual singer-songwriter Lisa Morales played the series in 2017 and remembered that she thought the stone building "looked like one of those restaurants you’d see when you went down Route 66."


"It was always the place everybody wanted to be on a Thursday night in the summer," Morales said. "It was one of those places that kept Austin what it used to be. The audience was always diverse, with all ages. It wasn’t like it only targeted one group. People from all walks of life would come together."


Unplugged at the Grove kicked off about the time Zagst joined the restaurant as a busboy in 1993. Twenty-seven years later Zagst, a near-daily fixture at the restaurant who also was a drummer in the Austin band Kissinger, is a co-owner with Zapp and serves as Shady Grover’s managing partner. He walks away from one of only two jobs he has had in Austin (the other was working at ThunderCloud Subs for a year with musician Kevin Fowler). Shady Grove is the place he met his wife and created every other meaningful long-standing relationship in his life. It was a lot of work, he said, but it never felt like a job.


"It’s absolutely defined my life. It’s been the running theme of my life," Zagst said about the restaurant. "It’s been my home. It’s been my place of business. It’s where I started my family. It’s where I met all of my friends. I’ve buried friends. We’ve celebrated; we’ve mourned. I don’t even know, man. I’m just kind of a mess."


Zagst added that not being able to hug his employees as he gave them the bad news was especially painful.


The longtime Shady Grove employee wasn’t the only one to have his life shaped in part by the Austin staple. Former employees of the restaurant went on to open their own businesses and helped define Austin culture.


Kelly Chappell started working at Shady Grove in 1992 and spent 14 years there before opening Galaxy Cafe and Zocalo Cafe with partners he met while working on Barton Springs Road.


"So many of us grew up together in that place. We were a family that kept evolving. I met and worked with my best friends there," Chappell said. "The best part was always the staff. We attracted the greatest people and had the most fun.


"This restaurant helped build the legendary Austin that we all talk about. The patio, live shows, the drinks and the laid-back atmosphere made it the place to be and be seen. We served Clapton, Depp, Sandra Bullock, Haynes, Earl Campbell, and every other big name that lived here or visited Austin in the ’90s."


Shady Grove, along with every other restaurant in Austin, closed its dining room March 17 after dual orders by the city and county, and started takeout and delivery the next day. It continued with that model in recent weeks after Texas Gov. Greg Abbott’s proclamation that restaurants could reopen to 25% capacity.


The restaurant received funds via a Paycheck Protection Program, but Zagst said that cloudy forgiveness thresholds for the loans, an uncertain economic future, no end in sight to the virus, and restrictions on seating and the dining experience made staying open financially impossible in the long term for the modest restaurant, which sits on property valued at approximately $5 million by the Travis Central Appraisal District. The owners also pay to lease a second lot that they use for parking.


"We’re in the restaurant experience business. Shady Grove is a place where you go and you gather," Zagst said. "Unless the ‘Men in Black’ are going to wave their magic wand and make our whole way of life forget about what’s going on, there’s just no going back to what was."


The original building at the property first operated in 1954 as Dairyland, a hamburger stand that served ice creams and custards. It became a restaurant called the Barton House in 1955 and operated as the City Recreation Department in the late 1950s and as Westwood Cleaners in the 1980s. The building that houses Shady Grove, opened in 1992, was modeled after the Texas Sate Parks buildings constructed by the Civilian Conservation Corps.


The land at 1624 Barton Springs Road has been in the Neelley family for at least 50 years, according to the Travis Central Appraisal District. Zagst said he was not sure of the landlord’s plans for its future.


"I don’t know who’s going to be lined up to start a restaurant there under the conditions we’re in," Zagst said.


American-Statesman staff writers Peter Blackstock and Michael Barnes contributed to this report.


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