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For almost anyone other than Jamie Kennedy, September of 2008 was not the best time to be optimistic about the world.

The economy, you'll remember, was in ruins. Banks were going under around the world. Panic filled the headlines. Organic heirloom-tomato salads lost their primacy on the lunchtime menu.

It was in this desperate period that the photogenic chef with the social conscience took a moment to spread some good news by posting a personal message on the website of the Evergreen Brick Works. Announcing the opening of the new Chefs' Market he helped pioneer at the Brick Works Don Valley site - the message includes a picture of the lean, long-haired chef in full farmer mode - he couldn't have been more gung-ho: "These are exciting times in the world of gastronomy," he wrote. "We have entered into a new era that recognizes the importance of making connections between local farmers and the population of the city."

Nine months later, high-flying and high-minded Jamie Kennedy has come back down to Earth - a place that remains good as a growing medium but discouraging for anyone who wants to combine food enlightenment with restaurant stability. Utopia will have to wait a little longer, because Jamie Kennedy's food empire, as he recently revealed, is in a state of shambles.

"I expanded too quickly," he says, sounding more like a chastened entrepreneur than an artisan whose $6 Yukon Gold fries were the talk of the town. "I was exposed to costs far out of balance with my revenue."

His high-end restaurant at the Gardiner Museum turned into a financial disaster as the luxury-lunch market faltered and ceramics admirers demanded something quicker and cheaper than his fastidious, locally sourced cuisine. Huge cost overruns at the renovated headquarters of Jamie Kennedy Kitchens have soured the positive reviews of the luscious charcuterie and fancy granola bars at his more budget-conscious Gilead Café.

As these problems surfaced, the 52-year-old chief executive officer/chef was increasingly distracted by his farm in Prince Edward County, and the dreams of opening a rural restaurant/tavern that would become a model for his agrarian ideals. In a buoyant economy, maybe he could have got away with such longings. But in a recession, reality kept getting in the way: He has missed paying his trade creditors, ducked bank loans, and found virtue in looking after his staff salaries rather than redirecting his PST and GST.

"I am in a very precarious position," he says. "If someone like the provincial government decides they don't want to play ball, they could force the issue and tip the balance. Bankruptcy is an option, but at the end of the day, the people who lose out are those who trusted me. So it's not a viable choice."

Figuring out where Jamie Kennedy went wrong has preoccupied the Toronto food community, if only because the reality of his predicament contrasts with his aura of success. For Rodney Clark of Rodney's Oyster House, it's a case of Mr. Kennedy's iconic status outdistancing his day-to-day product.

"Jamie's a great person to stand in the pulpit and describe the seriousness of the 100-mile diet, to talk about sustainability and stewardship. His name's on every fundraiser, he's a big draw. But this is a business first, and you don't eat the man's stardom, you eat the man's food."

To Chris McDonald of Cava, Mr. Kennedy's food activism may have become a distraction. "People forget the food is supposed to be entertaining, that eating is a pleasure. You need to make it fun, to push the politics to the background. Otherwise it gets boring fast."

Roberto Martella of Grano observes that "His Achilles heel is that he always wants to do more, to be more."

Mr. Martella is as socially and intellectually engaged as Mr. Kennedy, but much of his activity is restaurant-based, allowing for a coalescence of philosophy and business.

"Jamie has done so much," says Mr. Martella. "But maybe he's done too much. Now's a good time to keep your head down and do your own thing, the headlines be damned."

But reticence and mundane common sense have never been Jamie Kennedy's preferred option. This is the food iconoclast, after all, who could position an emerging farmers' market against a backdrop of global collapse and discover a new era of excitement. Understand that conundrum and you've figured out Jamie Kennedy, the perennially youthful veteran who's managed to occupy the centre of Toronto restaurant culture over almost three decades of economic highs and lows.

Foodies with short memories may believe these are the worst of times. But the chef who's known the peaks of Scaramouche, Palmerston, JK at the ROM, the many permutations of the ever-thronged Jamie Kennedy Wine Bar, and now the nose-to-tail simplicities of the Gilead Café, accepts that there's going to be down time between the great successes.

"Entrepreneurs take risks, they make mistakes," he says. "I've opened and closed restaurants, I got through the bad times, I survived."

That's a rare achievement in a business that tends to eat its young. Especially when, as former Gardiner chef Michael Dixon says with admiration, "He pays fairly and gives people raises when they deserve it. In the food industry, that's what passes for a bad financial decision. But he made us happy to work hard for him."

All the goodwill he's accumulated may not be enough - even the eternal survivor admits the seriousness of the situation. When he hosted a food-writers lunch at the Gardiner 11 days ago to acknowledge his plight, his critics felt he was soft-pedalling his own mistakes by pointing out the higher costs of the local ingredients he favours. Now he's content to accept the blame.

"I've made strategic errors over the last two or three years," he says. "The responsibility for the precarious position the company is in today can't be blamed on the downturn in the economy or the cost of local food."

The critics' carping and reports of his demise don't bother Mr. Kennedy, or so he says. And if he isn't exactly keeping his head down - who else would host a free lunch to quell rumours about his own downfall? - he's at least fixed on trying to make sense of his businesses in a way that would let them survive, and allow him to realize his Prince Edward County dream.

"We're bringing this back to a human scale," he says.

The changes at the Gardiner allow him to reduce staff numbers, while supplying the museum café more efficiently from his central Gilead commissary. He's looking for new sources of revenue by selling his charcuterie at The Healthy Butcher. He's offered to sell the wine bar to his senior managers in what he calls "a correction of this mood of expansion. If the sale occurs, it would help me address my current cash concerns."

The through-line in his working life among the celebrity peaks and the financial troughs has always been a philosophy of local food culture that remains consistent, whether the Gardiner is serving wild striped bass with heirloom carrots in a beurre blanc or just a ham sandwich (but a really good, smoky ham sandwich on Red Fife whole-wheat bread with homemade pickles).

At some point, though, he took his eye off the basic ingredients. It's clear in talking to him that his original decision to expand gnaws at him as much as the financial fiasco that it produced. "It was a moment where I was seduced by success: The headiness of the wine bar led me to believe I could grow, but I realize now I should have kept things artisanal. I was challenging my own ethos by expanding that way."

Yet even these mea culpas lead to a desire for change, an impulse to fit the food business and the Jamie Kennedy philosophy more perfectly together. He's longing to make the shift to his Prince Edward County farm. "I've been involved in this industry for 35 years," he says, a statement that's hard to accept when you give him the once-over but understandable as an expression of financial world-weariness. "The farm is where I want to be, physically and personally, in my life."

Just don't call it retirement. "It's an experiment in defining the mixed family farm," he says, "and the model for a new economy."

There it is again, that restless, optimistic tone we know so well. For Jamie Kennedy, there will be no rural retreat.

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