Lu Watters envisioned the new operation as a co-op, with band members living on the premises and each musician assigned a task: Watters would be the chef, Bob Helm would supervise the waitresses, and Dick Lammi would screen silent movies for the patrons before the band started to play. Rifts began to develop quickly, however, when some musicians opted not to live at the club and others wanted a salary, rather than sharing in the profits.

Despite the ominous signs, the club opened as Hambone Kelly’s on June 20, 1947. As Watters recalled later, it was so successful that 27 waitresses were needed to handle the patrons’ food and drink orders. Fans from the Dawn Club days made the long trek from San Francisco to the relatively wild and woolly Old West atmosphere of El Cerrito. Jazz author-critic Rudi Blesh hosted a live broadcast of his This Is Jazz radio program from Hambone’s on August 16, carrying the San Francisco style across the country on the Mutual Broadcasting System.

However, all was not well behind the scenes. Wally Rose left, then Bob Scobey, then Bill Dart, and finally Turk Murphy. Some of the departures were hastened due to constant delays in performance fees. Others left because of serious musical disagreements. Although some of the principals returned, the full Yerba Buena Jazz Band was just a memory by the middle of 1948. After hernia surgery, Watters was forced to lay off playing trumpet for several months. With Dart out of the picture, Lu played washboard. Recordings from this period include some outstanding performances, but it was not the powerful two-trumpet sound that fans of the Yerba Buena Jazz Band craved.

Watters tried to bring in more patrons by hosting Sunday afternoon jam sessions, and special concerts, which included appearances by James P. Johnson, Eddie Condon, Wild Bill Davison, Pete Daily, and the Firehouse Five Plus Two. Still, it was not enough to make up for the reduced patronage.

By 1950, the band was reduced to a quintet and the number of performances cut back. Even with these drastic measures, the club could not continue to operate at a loss. The Yerba Buena Jazz Band’s final performance was on December 31, 1950. The next day, Lu Watters shook hands with the quintet and retired from the music business. The musicians went their separate ways to the new bands led by Turk Murphy and Bob Scobey, as well as to other traditional jazz groups in the Bay Area.

In 1951, Bob Scobey leased the old Hambone Kelly’s and opened it as Alexander’s. He brought one of his greatest bands to perform—with Jack Buck, George Probert, Wally Rose, Clancy Hayes, Squire Girsback, and Fred Higuera. Scobey had been unable to secure a liquor license, and the club limped along with only soft drinks, coffee, and tea available to customers, before permanently closing three months later. Eventually, the building itself was demolished. Today, a Wells Fargo Bank stands at the approximate location of Hambone Kelly’s. If atmospheric conditions are right, and one listens closely while using the ATM, it may be possible to hear the ghostly sound of a trumpet, stomping down hard on “Coney Island Washboard.”