A glimpse of Ruby’s beginnings

The first Ruby's Diner, Balboa Pier, Newport Beach. (Photo by author)

All Southern Californians know Ruby’s Diner and many have happy memories of time spent there with family or friends. Based in Irvine, the casual dining chain has deep Orange County roots. I just stumbled across an interesting article from the Ruby’s early days (see below) and thought I’d share it here. But first, a bit of background…

The first Ruby’s Diner opened on the Balboa Pier in Newport Beach on Pearl Harbor Day, 1982 – just days after a massive storm pounded the end of the pier and threatened to demolish the place. The little building that rode out that storm was an award-winning design by Thirtieth Street Architects of Newport Beach, built specifically for Rubys on the bones of the pier’s old bait shop. The two founders of Ruby’s, Douglas Cavanaugh, Jr. and Ralph Kosmides, were Tustin residents and pals from their days at Foothill High School. They just thought the diner would be a fun hobby. The two worked both the kitchen and the register on opening day. They ran out of ground beef and made $63 before the doors closed that evening.

Ruby's Diner, Balboa Pier, 1980s.

Less than five months after Ruby’s opening, the May 20, 1983 edition of the Daily Pilot featured an article about the diner by Jolyn Wayne, entitled, “The End of the Pier: Ruby’s is a return to ‘good ol’ days.’” Extensive excerpts follow:

Ruby’s is a modern version of a 1940s diner. Its galvanized metal exterior glistens in the sunlight. At night, a bold red neon sign, bearing the restaurant’s name, glows from above. …The décor inside consists of shiny chrome tables and ruby red upholstered booths. Original Coca Cola signs adorn the walls. Memorabilia, such as an old-fashioned cash register and gum ball machine, rest on the counters and are operable. The music of Glenn Miller and other big bands plays in the background. An outdoor, upper deck, called “Ruby’s Flying Bridge,” provides a spectacular view as well as space for some jitterbugging to the sounds of the big bands.

Cavanaugh (L) and Kosmides (R) at Ruby's, Balboa Pier, May 1983. (Photo by Lee Payne)

The owners and creators of Ruby’s are native Californians, Doug Cavanaugh and Ralph Kosmides. According to 27-year-old Cavanaugh, it was the Rendezvous Ballroom that inspired him to create Ruby’s. Before it burned down, the Rendezvous was one of the last bastions of the swing era in the Newport-Balboa area. “I wanted Ruby’s to be an extension of that past era for all of the community to enjoy,” says Cavanaugh. 

[Blogger’s note: The Rendezvous opened in 1928, burned in 1935, was rebuilt, and ended with another fire in 1966. Along the way, this popular venue served as an incubator not just for big band music (and a dance called the Balboa), but later for the genre of music known as surf rock.]

Rendezvous Ballroom, near the foot of the Balboa Pier, circa 1940s.

A former builder and contractor, Cavanaugh recounts how he and his family all pitch in to help with the construction of Ruby’s: “everything from the framing to the plumbing.”

His parents encouraged him greatly. As a tribute to his mother, Ruby, the restaurant bears her name…

Ruby's, Balboa Pier, May 1983. (Photo by Lee Payne)

“It is very touching for me to remember how my father was able to witness the completion of the restaurant shortly before he died,” Cavanaugh said. 

The construction was no easy task. It started from a shell of a building where the old bait and tackle shop once stood…

The specialties at Ruby’s include “The Bleus Burger,” a burger topped with bleu cheese, “The Wedge Burger” and “The Pier Burger.” Among some of the other favorites are clam chowder, chili and hot dogs. Cavanaugh boasts that no artificial ingredients are ever used in the food. Hours are from 7 a.m. to 9 p.m. weekdays except Mondays, and 7 a.m. to 11 p.m. Fridays and Saturdays. 

Ruby's, Balboa Pier, May 1983. Cavanaugh and Kosmides on left. (Photo by Lee Payne)

What are some of the owners’ future plans for Ruby’s? They hope to offer jazz concerts every weekend on the pier. With the city’s permission, they plan a gala event in July with Les Brown and his Band of Renown entertaining on the upper deck….

The article draws a great picture of a soon-to-blossom business in its earliest stages.

Over the next several decades, Ruby’s Diner grew into a successful chain of at least 42 restaurants, mostly located in Southern California, but also in the first stages of a planned nation-wide expansion. They already a handful of restaurants in states as far away as New Jersey. Ruby’s was known for consistently high-quality food, clean and cheerful restaurants, good service, and classic American fare without the downsides of greasy-spoon diners. According to other interviews with Cavanaugh, his childhood experiences at Disneyland inspired Ruby’s “cleanliness, orderliness, service.” It was hard not to like Ruby’s, and their restaurants always seemed busy. It appeared they’d cracked the code and couldn’t fail.

Ruby's Diner in Tustin, 2009. (Photo by author)

But trouble began as early as 2012, when Ruby's Diner, Inc. borrowed money to buy out some of its partners in a long-running dispute. A variety of other financial hits followed. By 2018, the company owed over $14 million to its creditors and declared bankruptcy. 

Then, in 2021, the trustee for their Chapter 7 bankruptcy filed a $35 million lawsuit against Cavanaugh and Kosmides for using Ruby's reputation, expertise, funds and personnel to obtain a lucrative contract for two (non-Ruby's) restaurants at Crystal Cove State Park: The Beachcomber and The Shake Shack. 

The Shake Shack in 2010. Slapping a Ruby's logo on it didn't solve their problems.

Once the Crystal Cove contract had been awarded to them, they made the two restaurants part of other businesses they personally owned, depriving Ruby's of the assets and helping push Ruby's over the edge into bankruptcy. They also gave themselves loans of over $1.5 million from Ruby's funds and later called the loans "distributions" in an attempt to avoid repaying them. 

Successful Ruby's franchisee Steven L. Craig provided a cash infusion to save the chain. In return he took the title of chairman, along with 60% ownership of Ruby's Diner, Inc. Cavanaugh and Kosmides initially retained the remaining shares, but soon sold their stake to pay for the expensive battle over the Crystal Cove situation.

Ruby's is the perfect tenant for Anaheim's restored historic Five Points building.

By 2023 – after years of financial woes and waning quality – the chain was down to only 14 restaurants (including the original on the Balboa Pier). By early 2024, it seemed an effort was being made to bring the quality of the food back up to par, although those familiar with the chain’s older (and much lengthier) menus could clearly see major changes. Still, even with a different menu, different ownership, and fewer restaurants, perhaps Ruby’s can make a comeback and eventually return to its glory days. They filled an important niche in Southern California’s restaurant landscape, and they could again.