Azul Mexican Food & Tequila Bar, the Jalisco-inspired restaurant at 1050 20th Street in Sacramento's Lavender Heights district, will close permanently after Saturday, September 26, 2026, ending a 19-year run, according to Hoodline and CBS News Sacramento.
Co-owners Carlos and Jose Ulloa posted the closure announcement on the restaurant's Instagram account this week, thanking customers for nearly two decades of patronage. Carlos Ulloa later told CBS News Sacramento in an interview published Wednesday that a mix of economic and neighborhood pressures had made the business unsustainable.
What the owners say drove the decision
Carlos Ulloa told CBS News Sacramento that the restaurant had struggled for the past two years as customers pulled back on discretionary spending. He described the broader restaurant industry as under strain and said diners are eating out less often than they used to. Separately, the brothers told the Sacramento Business Journal, as reported by the Sacramento Bee's Yahoo News syndication, that slowing business and elevated food costs factored into the closure.
Ulloa also pointed to a city policy change as a repeated point of customer complaint: Sacramento's conversion of free parking in Lavender Heights to paid parking, which he said discouraged repeat visits. He told CBS News Sacramento that diners seated on Azul's patio had, on multiple occasions, been harassed or had items taken by unhoused individuals nearby, and that he believed more nighttime police patrols and a return to free parking could have helped the business.
Nineteen years in the MARRS Building
Carlos and Jose Ulloa opened Azul in late 2007 inside Midtown Sacramento's MARRS Building, an industrial-style complex of small retail and restaurant spaces, according to reporting from Abridged, the news service of PBS affiliate KVIE. The restaurant built a following in the Lavender Heights neighborhood on dishes including tortilla soup, grilled mahi-mahi tacos and carne asada plates, along with a weekday happy hour running from 3 to 6 p.m. The Ulloa brothers also ran Pizzeria Urbano, a late-night spot next door to Azul, until that business closed during the COVID-19 pandemic in 2020.
Part of a wider round of Sacramento closures
Azul's shutdown lands amid a string of recent Sacramento hospitality closures. Hoodline's reporting names V. Miller Meats, Track 7 Brewing, Device Brewing, Station 16, Public House and Chandos Tacos among businesses that have closed recently, alongside Jim Denny's, which shut down abruptly in early July after 85 years when its property owner opted to sell the land. Range Midtown, a restaurant on Capitol Avenue, closed earlier in 2026 after only three and a half months in operation, according to a separate Sacramento Bee report cited by Hoodline.
Hoodline also cited Capital Public Radio reporting in which the California Restaurant Association's president and chief executive said conditions in the city remain far below pre-pandemic norms, adding that Sacramento's reduced foot traffic is hurting operators. That CapRadio reporting also pointed to minimum wage increases, rising food costs and tighter household budgets as additional pressures on local restaurants. Industry-wide, restaurants typically run on profit margins of just 3 to 5 percent, according to figures from commercial real estate firm Tri Commercial cited in the same reporting, meaning small increases in rent, labor or ingredient costs can threaten a location's viability. The National Restaurant Association's 2026 State of the Industry report still projects nationwide restaurant sales will reach 1.55 trillion dollars this year, underscoring that the pressure on independent operators like Azul has not translated into an industry-wide sales collapse.