Pali Wine Co. announced Tuesday that its Little Italy tasting room will permanently close after nearly a decade at 2130 India Street, with its final day of service scheduled for Sunday, July 19. Rather than exiting San Diego, however, the company says it will relocate its tasting room to Hillcrest, reopening this August inside the former Cellar Hand restaurant at 1440 University Avenue.
The announcement comes just hours after Cellar Hand revealed it would permanently close following only two years in business. According to Pali Wine, the decision was driven by a steep lease increase at its Little Italy location.
"When our lease came up for renewal, our landlord demanded a dramatic rent increase that made staying in Little Italy unsustainable for our small, family-owned winery," the company wrote in its announcement. "Despite our best efforts to find a path forward, the terms ultimately left us no choice."
The move also helps explain Cellar Hand's abrupt closure. Rather than leaving the Hillcrest property vacant, Pali Wine will effectively retire the restaurant concept and transform the space into its new San Diego flagship tasting room. Ownership says the larger building, complete with a full kitchen and patio, will allow the company to expand its food offerings while continuing the hospitality philosophy established at Cellar Hand.
"This August, Pali Wine Co. will reopen at 1440 University Avenue in Hillcrest, in the space that has been home to Cellar Hand," the company wrote. "The new location gives us room to grow, with a full kitchen, patio, and exciting new opportunities for food, wine, and hospitality."
The consolidation marks a notable reversal from the company's expansion strategy just two years ago. Cellar Hand debuted in June 2024 as the first full-service restaurant from the Perr family, owners of Pali Wine Co., Tower 15 Winery and Neighborhood Winery. The project launched with considerable acclaim under founding executive chef Logan Kendall, whose hyper-local sourcing philosophy centered on San Diego County farms, ranchers, fishermen and artisan producers earned widespread praise from local food media.
Early reviews described Cellar Hand as one of the city's most exciting openings, with menus built around ingredients sourced directly from producers including Chino Farm, Thompson Heritage Ranch, Hukama Produce and legendary fishmonger Tommy Gomes. But the restaurant's trajectory changed after Kendall departed. While ownership continued operating the concept, many observers felt Cellar Hand gradually lost the singular culinary identity that had distinguished it at launch.
Earlier this year, SanDiegoVille included Cellar Hand among a list of local restaurants believed to be at risk of closing during 2026, citing the loss of its founding chef and the challenges of sustaining such an ambitious, ingredient-driven concept. Now, rather than maintaining two separate San Diego hospitality businesses, Pali appears to be combining them into one.
The move also sheds new light on SanDiegoVille's May report that Pali Wine's Little Italy space was quietly being marketed for lease takeover. At the time, company representatives emphasized that the listing originated with the landlord and should not be interpreted as Pali abandoning San Diego. Tuesday's announcement confirms that explanation while revealing the larger strategy behind the scenes.
Instead of attempting to absorb dramatically higher rent in Little Italy while continuing to operate a full-service restaurant in Hillcrest, the winery has chosen to consolidate its resources into a single destination. Whether the move ultimately strengthens Pali's San Diego presence remains to be seen.
Little Italy delivers some of the city's highest pedestrian traffic and tourist visibility, while Hillcrest offers significantly more space, a full commercial kitchen, dedicated parking and lower occupancy costs. The challenge will be convincing longtime customers to follow the brand several miles uptown while introducing a tasting room concept into a neighborhood that has historically been driven more by restaurants than wine bars.
Pali Wine says the Hillcrest location will continue serving the wines customers know while expanding its food program, adding that it intends to preserve "the same spirit that defined Cellar Hand."
The company's final day in Little Italy will be Sunday, July 19. After a brief transition period, Pali Wine expects to reopen this August at 1440 University Avenue in Hillcrest, occupying the former home of Cellar Hand. For more information, visit paliwineco.com.
Originally published on July 14, 2026.
