A Miami Company Had Big Plans for Portland’s Fast Food. It’s Struggling to Deliver.

A few years ago, restaurants started sprouting up in Portland like toadstools, with names like Mr. Beast Burger, Sticky Wings and Man vs. Fries. They served smash burgers, hot wings, and cheese fries to patrons ordering with a tap of their phones.

None of these places really existed—at least, not in the way people usually think of restaurants. They were “ghost kitchens,” where one or more cooks prepare as many as seven kinds of cuisine at commissary kitchens, brick-and-mortar restaurants and, in some cases, food trucks. At the edge of an empty parking lot. All for delivery only.

On apps like Uber Eats and Grubhub, ghost kitchens overwhelmed Portland’s brick-and-mortar restaurants floundering in the pandemic.

“They were an invasive species that came into a native area, and the local ecosystem can’t compete,” says Micah Camden, who founded Little Big Burger and Kinnamons, brick-and-mortar restaurants with locations from the Pearl District to North Carolina. “It’s like when a mosquito hitches a ride on a cargo ship and lands in the bayou and just completely devastates everything native.”

As of last year, Multnomah County authorities say, there were between 75 and 100 ghost kitchens in Portland. An Uber spokesperson tells WW there are “tens of thousands of virtual restaurant storefronts” on Uber Eats nationwide.

And in this city, more than a quarter of the ghost kitchens appear to be run by one company: a privately held Miami-based corporation called Reef Technology, which likes to put ghost kitchens in trailers, or vessels as it calls them, and place them in parking lots around the city.

The story of how Reef’s ghost kitchens arrived in Portland—and why they might not be long for the Rose City—is an international tale of hubris built on hunger and, it seems, some faulty assumptions.

Reef had what looked like a can’t-miss idea: convenience and comfort on a massive scale, built around the centrality of downtown parking lots.

But three years after it tried to reinvent downtown, Reef appears to be in retreat.

Multnomah County Health Department records obtained by WW list 23 permitted locations of Reef kitchens and trailers. WW visited each. What we found was that Reef had removed or shut down the trailers at 15 of its locations.

“What’s happening with Reef sounds pretty textbook spot-on to what happened with WeWork,” says Alex Murray, assistant professor of management at the University of Oregon’s Lundquist College of Business. “It’s this uncontrollable growth in scale after a large infusion of capital without the operational know-how to implement said promises made up front.”

Portland has long been eager to repurpose parking lots, to prioritize transit and pedestrians. Pioneer Courthouse Square was once a parking lot that became a brick-lined public plaza in 1984 because of this urban goal.

The city is still eager to undo its decades of parking construction, especially as the pandemic gutted the central city of its workforce and patrons. In the early 2000s, the city rezoned downtown so developers could erect buildings on surface parking.

“The more things you can do with a given square foot of dirt, the better,” says Sightline Institute researcher Michael Andersen. “When a whole city block is dedicated to storing cars, that’s a little bit useful. But if there were a bunch of transactions happening on that lot, every hour, then that will show up in the tax rolls of the city.”

Into this setting stepped Reef Technology and its co-founder, Ari Ojalvo, an entrepreneur who attended Northwestern University and ran a parking management company with modest funding called ParkJockey.

The company rebranded itself as Reef in 2019 upon buying out three of the nation’s biggest parking companies. The following year, Reef received $700 million in funding from its overseas investors, Softbank and a sovereign wealth fund of Abu Dhabi. Reef claims to be the largest parking management company in the United States, with most of its presence in large cities.

One of its purchases was Vancouver, B.C.-based Impark, which owns City Center Parking in Portland. For decades, City Center was locally owned by the Goodman family, which had a near monopoly on downtown parking management.

When Reef purchased Impark in 2019, it took over leases and contracts to operate those parking lots, even though the Goodmans and other property owners retained ownership of the underlying real estate. That meant Reef acquired contracts to operate more than 200 surface parking lots and garages in the city center, making Reef the largest manager of private parking in Portland.

Meanwhile, it placed more than 20 ghost kitchen trailers on other properties across the city.

Since 2019, Reef has been collecting parking fees from downtown commuters and, at different parking lots, cooking food under brands like Wow Bao and Rebel Wings. One business was conventional, the other futuristic.

Reef said the plan was to combine the parking lots and ghost kitchens—plus a lot more.

Executives sketched a vision in which parking lots would become micro-communities where city dwellers need only walk a block or two to access food, retail, groceries and electric vehicle charging stations.

Reef’s plan is not merely to park cars but, according to an internal document, “transform underutilized parking garages and lots into urban mobility hubs” that could “include delivery-only kitchens, micro-fulfillment centers, bike and scooter rental stations, electric vehicle charging, drone pads, and rideshare/autonomous vehicle buffering areas.”

The trade publication Building Design + Construction magazine raved in 2019, “Not bad for something that, in the past, was just a flat piece of asphalt or concrete for housing vehicles.”

Let’s say you had a few drinks on New Year’s Eve 2021, got hungry and were scrolling on Postmates or Uber Eats. Maybe you noticed spicy Mongolian beef bao from a place called Wow Bao, or waffle fries from Wings and Things.

Either way, your midnight snack was likely coming from the same trailer parked in the Every Day Food Mart parking lot along Southeast Foster Road in the Lents neighborhood.

On any given night in 2021, Reef employees at more than 20 “vessels”—what Reef calls its ghost kitchen trailers—checkered around the city were cooking burgers and wings to quell the drunken munchies, watching orders pop up on a screen mounted to the wall of a trailer.

The trailer parked along Foster looked like a shipping container. It contained a kitchen that looked like the inside of most food carts. On one side of a narrow walkway was a stovetop, frying basket and large toaster oven. On the back wall hung pots and pans. Under the shelves were stacks of brown boxes, bags and napkins.

Such vessels dotted the city in the parking lots of convenience stores, dry cleaners, tool shops and industrial kitchens. They sold three to seven distinct brands from each cart, according to health department records that track the menus of each Reef trailer.

Trailers normally sold food from places called Man vs. Fries, Wow Bao, Wings and Things, BurgerFi, Rebel Wings, Sticky Wings, Mr. Beast Burger and Umami Burger. If a brand underperformed, employees tell WW, Reef would give it the boot and bring another one online.

Of the 75 to 100 ghost kitchens that the health department estimated were in business across the city, Reef ran at least 26 of them at its height.

When Reef came to town, it couldn’t have timed its entry any better. Within six months, the pandemic would gut the central city of its office workers, patrons and tourists. Restaurants descended into panic. Customers turned to takeout clamshells.

Camden says Reef was “able to pounce as soon as COVID happened.”

Reef didn’t always prepare food for virtual brands. In 2021, Reef and burger giant Wendy’s announced they would partner to roll out 700 trailers across the country.

Portland, according to records obtained by WW, had four of them: massive, cherry-red trailers with Wendy’s smiling face, each cooking Double Stack hamburgers.

Twenty-five-year-old Isaiah, who asked that WW use only his first name, got hired at a Wendy’s trailer parked in a convenience store parking lot in mid-2022.

He’d never cooked before in his life and says he received no formal training. He worked the night shift as the only cook. He’d prepare the food—following written directions on sheets of paper attached to the trailer’s wall—put it in boxes and bags, and hand it to delivery drivers in Wendy’s packaging.

Isaiah visited the manager of the Reef trailer next to him—a blue trailer for one of Reef’s subsidiaries, NBRHD—when he was stuck.

“I had him train me,” Isaiah says. “I had to run over here and have him teach me when I had a question.”

Reef insists its ghost kitchens are successful.

“Reef has been the leading operator of both parking and ghost kitchens in the region for a number of years and looks forward to continuing to grow,” says a company spokesperson.

A Reef Technology spreadsheet obtained by WW that lists ghost kitchen sales and revenue across 37 cities in 2020 and 2021 shows that the company last year made an average of $17,858 a day from its Portland ghost kitchens—that’s $6.5 million a year.

Portland ranked fifth for revenues in cities where Reef operated ghost kitchens that year, according to the spreadsheet. In 2020, it ranked second.

Average daily revenue per vessel was $1,021, with an average of 37 orders a day per vessel.

“A thousand dollars a day would be just breaking even for a walk-up cart in the downtown core,” says Keith Jones, who manages the Cart Blocks in Ankeny Square. “It’s hard for me to imagine that this is a profitable venture because that’s split between how many restaurants? Whatever profit margin Reef has, I’d say that this is probably not something that was long-term sustainable.”

Meanwhile, WW has learned, Reef no longer holds some of its major parking lot contracts in the central city.

Last year, Melvin Mark Properties chose another vendor to operate five of its parking lots, according to CEO Jim Mark. This summer, Moda Center’s Rip City Management told WW, it “decided to go with another vendor” after its contract with Reef expired. In November, regional government Metro chose a new vendor to operate parking lots at the Oregon Convention Center and the Expo Center.

A July letter from a Metro attorney to Reef’s attorneys, threatening to sever ties at the Expo Center, offers some insight into why.

“Our staff have reached out to Reef with various concerns regarding responsiveness to issues, staffing at our facilities, uniforms, adequate training, and cash handling,” Metro deputy attorney Nathan Sykes wrote. “Reef continues to underperform on the contract without any adequate response to [Expo Center] staff.”

Perhaps the most damaging blow, however, will be the end of the lease to run the roughly 20 parking lots on real estate owned by the Goodman family come Jan. 1. That lease was among the largest of Reef’s Portland operations. A Reef manager wrote to health department officials Nov. 29, in an email obtained by WW, that Reef and the Downtown Development Group were “unable to come to an agreement …for the continued operation of their parking facilities.”

Greg Goodman declined to comment. Reef maintains that the ending of the parking contracts and leases doesn’t matter to the larger business.

The company says those contracts “were allowed to expire per the terms of their contract and don’t represent a significant percentage of Reef’s portfolio globally.”

The empty shells of Reef’s business lie in a Prosper Portland parking lot.

A total of eight shuttered Reef trailers are lined up on the pavement, including two ghost kitchen vessels, two retail vessels, and two vessels emblazoned with the logo of the snack-delivery brand Reef launched earlier this year, Goodees.

Reef would not say how many operational vessels it still has in Portland.

A Reef vessel listed in health department records is nowhere to be found on the parking lot behind Five Star Cleaners in Northeast Portland.

“They told me they were consolidating,” says Five Star owner Michael Maggard, “and that it didn’t really pencil out for them.”

Isaiah was laid off about a month ago. The Wendy’s trailer closed shortly thereafter. The doors are bolted from the outside and the windows are closed.

Isaiah, in a green Tupac bomber jacket, Nike Air sneakers, light-wash jeans, and a flat bill cap, visited with the manager of the nearby Reef trailer on a recent Sunday evening.

It was only 4:30 in the afternoon, but it was already pitch dark and 33 degrees outside. The soft-spoken manager, who declined to give WW his name for fear of retaliation by Reef, stood outside the trailer and smoked. He wore a hoodie, jeans and a hat. Inside the trailer was a fryer, hanging pots and pans, and lots of greasy surfaces.

He said peak hours for the trailer are between 7 pm and 2 am.

The manager of another Reef trailer on the eastside, who goes by “B” and came to the Foster location to hang out with the other two, said Reef has shrunk its trailer presence in the past year and instead has started clustering seven to 10 brands in each remaining trailer.

B pointed to a plastic sign next to the trailer that listed eight brands in black lettering, all made in this trailer. Five were chicken wing brands.

“If they keep throwing their money in the wrong areas, they’re going to go out of business,” B told WW, exhaling cigarette smoke. “They keep changing their motto every three months. They don’t stick with nothing.”

Dumpster Ire

Reef properties became a headache for county health inspectors.

Multnomah County Health Department records obtained by WW since late 2019 show that county inspectors have had repeated issues with overflowing trash, rat infestations and unsanitary conditions at Reef Technology-managed parking lots downtown that held a collection of food carts, including one or two Reef trailers.

Dozens of emails show county inspectors had a difficult time figuring out who to contact at Reef because of high turnover.

On Dec. 18, 2019, inspector Jamie Pauluk emailed her colleagues about an inspection she’d done at a Reef trailer in Slabtown. She wrote that the manager, Kevin O’Connell, became “quite agitated” with her when she pointed out noncompliance issues.

“I let him know that if he looks underneath the cart that he would see that it was gray water because of all the tiny bits of food and the smell,” Pauluk wrote. “He threw up his hands and muttered, ‘You people are too much! I need a minute!’ and he proceeded to go outside to cool off (I assume).”

Pauluk later wrote in the email: “If [O’Connell] is struggling to organize even four units downtown, what is it going to look like when there are 20 units across Multnomah County?”

She found out.

By June 2022, Pauluk sent a video she had shot of 15 rats scurrying under a dumpster at a Reef lot on Southwest 3rd Avenue. She and her colleagues debated whether to open another case against Reef.

“They recently removed the dumpsters at all of their lots to switch to a new garbage service, and all lots were without dumpsters and trash service for about a month,” Pauluk wrote. She added that trash was stacked where the dumpsters used to be. “I am guessing this is what contributed to the recent increase in rat activity.”

Dozens of pictures taken by county inspectors at Reef parking lots since late 2019 show mounds of trash overflowing the dumpsters at the downtown locations. Reef managers blamed homeless people for rummaging through the refuse, and other restaurants for dumping trash.

On July 21 of this year, the health department threatened civil penalties if Reef didn’t exterminate the rats at its parking lot on Southwest 3rd Avenue. It was the final warning; the county had instructed Reef to do so more than a month previously.

By this fall, Mayor Ted Wheeler’s office was so alarmed by Reef ghost kitchens and their potential to take business away from local restaurants that it asked the City Attorney’s Office to conduct a legal analysis into possible new rules for ghost kitchens.

“That includes whether or not they can be required to have walk-up service,” says mayoral aide Sam Adams, “and whether or not we have the ability to require disclosures so that people can make informed choices.”

While the analysis applies to all ghost kitchens, the city says its primary concern is Reef. “They just popped up everywhere,” Adams says.

Speed Bumps

Reef has run into conflict across the country.

Reef Technology says its business model looks different depending on the city.

“Reef continues to grow globally, launching new locations, brands and applications around the world,” a spokesperson tells WW, “although it’s not growing in the same way or at the same rate in every city.”

A review of news coverage in other cities, however, suggests a nationwide pattern: aggressive expansion and conflicts with regulators and brand partners.

As it entered Portland, Reef launched ghost kitchens in over 30 other cities, including New York and Houston.

It signed a contract with Wendy’s in August 2021 to open 700 Wendy’s trailers across the country. That same year, it announced partnerships with Burger King, Jack in the Box, celebrity chef Guy Fieri, rapper DJ Khaled, and a YouTube star who goes by “Mr. Beast.”

By mid-2021, Reef boasted 320 ghost kitchen trailers nationwide.

Reef higher-ups sent inspirational messages to the company’s “launch” team, responsible for placing, permitting and prepping trailers for use. Some of those messages, sent to more than 100 employees, were shared with WW.

In the spring of 2021, Onur Kinay, global head of real estate deployment at Reef, sent a WhatsApp message to the launch team that sang the virtues of speed, which would “allow us to execute super fast and flawless without worrying about unimportant consequences.”

Arjun Gupta, senior vice president of global partnerships and operations, instructed Reef’s launch group on May 9, 2021, to each pick a distinct address in proximity to a new Burger King ghost kitchen in Los Angeles, place orders, and then choose the “pick-up” option, which would signal cooks not to make the orders. “We are hoping to get to [about] 150 orders tonight,” he wrote.

Gupta instructed employees to rate the food they never ate to boost the brand’s visibility.

But amid its rapid growth, Reef clashed with regulators and contractors.

Minneapolis: Last December, Reef pulled its vessels from the city after clashing with regulators over permits.

New York City: In October 2021, Reef temporarily shut down its vessels after regulators alleged they’d broken health and safety rules. (Reef denies this, claiming instead that their permits had expired.)

Houston: In October, Business Insider reported, Reef stopped operating all of its trailers in the nation’s fourth-largest city, where it once operated 29. Reef cited underwhelming profits.

Miami: In May, Business Insider reported that commercial real estate company JLL had sued Reef for an alleged $3.5 million in unpaid invoices.

Jack in the Box, Burger King and Popeyes all cut off their contracts with Reef this fall, according to Business Insider. (Reef contends it decided to end the partnerships.)