Karsh's Bakery in Phoenix closes

• Karsh%27s Bakery opened in 1965 and moved into its current space in Phoenix in 1980.
• It supplied Valley restaurants%2C such as Miracle Mile Deli%2C with onion rolls and cakes.
• On its final day%2C customers were lined up out the door right after its 7 a.m. opening.

Today, a Phoenix institution will close.

Karsh's Bakery, known for its handmade challah and rye breads, Kaiser rolls and Jewish pastries, is shuttering after nearly 50 years in business. It first opened in 1965 and moved into its current space at Seventh Street near Missouri Avenue in 1980.

Manager April Palagi said the business couldn't sustain the one-two punch of competition with high-volume modern bakeries and increasing property costs.

"We couldn't afford to pay the rent anymore," said Palagi, who has been with the bakery for 31 years. "A few years ago, it was like they (area businesses) were all moving out. Now, they're all moving back in. We wish we could grow with them this time, but we just can't."

Karsh's was one of a handful of bakeries supervised by the Phoenix Vaad HaKashruth, an Orthodox non-profit that oversees kosher certification. It was one of the last old-school bakeries, where five bakers made pastries, bagels and breads by hand each day. And it supplied restaurants, such as Miracle Mile Deli in Phoenix and Scottsdale, with onion rolls and cakes.

On its final day, customers were lined up out the door right after its 7 a.m.

They picked up numbers and waited for their turn, some reminiscing about past experiences at the bakery, some worrying the bread and pastry would sell out before they got to order.

Angela Estrada, 32, was one of those in line on Wednesday morning. She bought sourdough bread, a panda bear cupcake, cheesecake slices, chocolate brownies and a black and white cookie, which reminded her of the "Seinfeld" TV show.

"I just thought it would be really nice to come in because it was open in 1968 and I wanted to be a part of the little nostalgia in town," she said. "I just thought it was kind of neat. I wanted to come and say, 'I went there before it closed.' "

Heidi Newman, 54, has lived near the bakery since 1969. Each Friday, she bought a loaf of challah bread for her family to eat during Shabbat. On Saturday morning, they would use the remaining pieces of the egg bread to make French toast.

"The tradition ends today," she said. "It's very sad. When I heard this morning that (Karsh's) was closing, I had to run out. I was hoping to stock my refrigerator with rye bread."

Newman's sentiments were echoed by other customers.

"We didn't expect this overwhelming surge," Palagi said. "Customers are sad. They're upset. We're all upset. If we could change it, by God we would."

Right now, the bakery has no plans to reopen. But, Palagi said, that doesn't mean it won't happen, probably on a smaller scale.

"We would love to see that," she said. "It's been wonderful being open to serve everybody."

Reporter Betty Reid contributed to this story.