KP Icon Lulu’s to Close

New owners, menus and décor. And breakfast, all coming later this year.


Photo: Tim Heitzman, KP News 

Lulu’s Homeport Restaurant and Lounge is scheduled to close its doors in early January after nearly 30 years of hardening the arteries and warming the hearts of Key Peninsula diners.

The beloved blue diner, located at 1509 Key Peninsula Highway NW in Home, had been for sale since June 2017 and was sold to Ricardo Sahagun and Edgar Anaya, the cousins and business partners who own Two Margaritas in Allyn, Poulsbo and Union. The Lakebay location will make their fourth Mexican restaurant when the sale closes in a few weeks.

Lulu’s Homeport has been an oasis for a variety of local wildlife, ranging from loggers to programmers, teachers and pastors, and cabals of crusty old men debating events both current and long past. The lounge was the go-to meeting place for groups such as the KP Business Association and KP News for monthly meetings and planning sessions.

“I’m tired, worn out, like a dirty old dish cloth,” said owner Lulu Smith. She said it’s hard to imagine retirement after working so long, but said she’s getting a lot of good feedback from customers and others begging her not to go. “I’m nearly 74 now, so that’s a lot of years. We’ll have a good closing party before it’s all over.”

Smith got her start in the restaurant business “at age 14, working as a soda jerk at Woolworth’s” in her home town of Kansas City, Missouri. From there she worked in food service for many years and eventually opened Lulu’s on McKinley Avenue in Tacoma. After a dozen years there she decided to build her own restaurant in Lakebay and Lulu’s Homeport was born.

Smith, who lives at Palmer Lake, said she has no intention of leaving except to visit her sister, maybe go to Hawaii, or see an old friend in Mexico if she gets up the nerve.

Smith earned an honorable reputation for helping the community with Christmas present giveaways, Easter egg hunts and fundraisers to support local schools, and awarded free meals to students at Evergreen Elementary who achieved high academic goals. During the infamous ice storm of 1996, much of the KP was without electricity for many weeks but the Homeport had power and the kitchen staff worked around the clock to help feed a cold and hungry community. “Peninsula Light had so many workers to feed, they set up a running tab,” Smith said.

The new owners plan a complete remodel including new floors, new bathrooms, and some work in the kitchen that they hope to wrap up within three months.

“We’re going to get busy on that right away, but you know, with construction business, it may take a little longer,” Sahagun said.

“Our family has been in the restaurant business for a lot of years,” he said. “Edgar’s parents opened on Bainbridge Island in ’93 and my parents opened on Vashon in ’96.”

For locals accustomed to breakfast at Home on the weekends, there is hope that chicken fried steak with gravy and eggs and those stacks of enormous pancakes with bacon might return before too long.

“We’re looking to do traditional American breakfasts in Lakebay,” Sahagun said. “We took over the Bistro a few years ago up at the golf course in Lakeland Village (in Allyn), so that’s ours also. We’ve got Brandon up there and he does really good breakfasts, so we’re developing a breakfast menu for down here as well.” They plan to see how it goes with breakfast, starting out with Friday, Saturday and Sundays.

“We’ve made a lot of friends over the years who live down here and drive all the way up to Allyn. That’s what really brought us out here,” he said.