The announcements have come with depressing regularity: One after another, promising new restaurants in Sacramento have closed in recent months, as have some old stalwarts of the dining scene.

Sacramento's restaurant market boomed along with economy in the middle part of the last decade. But as diners watch their dollars, the market has contracted as well.

A partial list of recently closed eateries: Red Lotus, Brew It Up, Spin Burger Bar, L Wine Lounge & Urban Kitchen, Celestin's Island Eats, California Pizza Kitchen's 15th and L street location, Good Eats, The Terrace and Slocum House.

Still, some restaurateurs are betting things will get better. They're snapping up vacated restaurant space at bargain rates for future expansion.

Randy Paragary, arguably the founder of Sacramento's modern dining scene, said the local market has never been more difficult in the more than 40 years since he opened his first midtown establishment,the Parapow Palace Saloon.

"This is the deepest and longest recession I've seen," said Paragary, whose restaurant group oversees such eateries as Paragary's, Cafe Bernardo, Esquire Grill and Centro Cocina Mexicana.

"We built a lot of restaurants during the heyday, but demand has been reduced," Paragary added. "Those who are going out are spending less."

Sales and employment figures show the local dining sector is slowly climbing back from a sharp drop in spending during the recession. But that recovery has been made more difficult by the increased competition from restaurants that opened in the years just before the downturn hit.

Competition is particularly intense in midtown Sacramento, roughly the area bordered by 15th, 29th, C and W streets. Many of the recent high-profile closures have come in this neighborhood, the city's foodie center.

In the first quarter of 2011, midtown restaurants recorded $27.7 million in food sales, down from a high of $28.7 million in the second quarter of 2008, according to the city's Economic Development Department.

"The volume of sales has stayed about the same," said Rob Kerth, executive director of the Midtown Business Association. "What it means is that some competitors have come into the market, but you haven't seen market growth. Most people build a business plan based on a growth plan, but that's been tough."

In the years before the recession, many new players opened in midtown. Rewind to 2005, and such locally heralded restaurants as Mulvaney's Building & Loan, Ella Dining Room & Bar and Tuli Bistro didn't exist or were just getting off the ground. The MARRS building at 20th and K streets, and the downtown development at 14th and R streets with Burgers & Brew, Magpie Cafe and Shady Lady Saloon had yet to be filled with eateries.

Those new venues came on line just in time for the recession and "Furlough Fridays," which depressed lunchtime business from state workers.

"I think for a while there was some oversaturation, but a lot of things have shut down or are dying," said Kimio Bazett, co-owner of Golden Bear, a midtown bar and eatery that was featured on the Food Network's "Diners, Drive-Ins and Dives."

"Within the central city, there's not a ton of room, it's highly competitive and whatever concept you're pursuing has to be unique."

While midtown closures tend to grab headlines, the recession has been tough on restaurants regionwide. Taxable sales at restaurants and bars in Sacramento County fell from $434 million during the second quarter of 2007 to $420 million during the second quarter of 2010, about a 3 percent drop. After adjusting for inflation, the drop was close to 8 percent.

During those same three years, the number of restaurants and bars operating in the county fell by 60 – or 3 percent of the total – to 2,210, according to the state Employment Development Department.

In the four-county region, restaurant and bar employment plunged from 65,900 in August 2007 to 59,700 in the same month in 2010. The sector has since partially recovered, employing 62,000 workers as of August this year.

Not every restaurant has shut down because of bad business. Sometimes a family is simply ready to exit after a long run, such as was the case at the former Hong Kong Cafe on Broadway in Sacramento, which closed in May after more than 50 years in business. The family behind Celestin's Island Eats was ready to step down after 28 years, with the owners of Capitol Garage taking over the space and transforming it into The Porch Restaurant & Bar.

The silver lining for entrepreneurs is that the commercial real estate market is now full of bargains.

"The deals are good right now," Paragary said. "What used to be $2 a square foot is now $1.50, or maybe you get six months' free rent. Landlords just want to get a new tenant."

Many restaurants that recently closed are being scouted by potential new owners. For instance, the space formerly occupied by California Pizza Kitchen at 15th and L streets is being remodeled into a sports bar by the families behind Mix Downtown and de Vere's Irish Pub.

Bazett of Golden Bear and his business partners are also branching out with Hook and Ladder Manufacturing Co., a bar and eatery that will occupy the former Hangar 17 at 17th and S streets come February.

"It was too good of a deal to pass up," said Bazett. "The next five years could hold some promise for Sac, but yeah, it's kind of scary at times."

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Call The Bee's Chris Macias (916) 321-1253. The Bee's Phillip Reese contributed to this report.

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