"It's crazy. We were too naive to be scared and we had a young, intense desire to do something exciting," says Butler.

In 1969, Butler figured San Francisco diners were ready for something new. "All the bars were so dark, and you couldn't go to a nice restaurant for dinner and just have a hamburger and a glass of wine," Butler recalls.

The Butlers were not your average restaurateurs. They did not spend months researching neighborhood demographics to see where their bar and grill would succeed. Instead, they placed an offer on the second building they looked at, a family-owned construction business.

"Union Street back then was very different from today. There were a couple Laundromats, corner groceries and drugstores, a hardware store and some antique shops," he says. Once the deal went through, they hired an architect and took him on a weekend trip to New York to show him the kind of restaurant they wanted to emulate. Shortly thereafter, the Union Street building was converted into a San Francisco version of a New York-style neighborhood saloon.

"To relax, to eat good food and enjoy a drink, to meet people you haven't seen since last night or maybe haven't seen before at all, or to just sit and watch the world go by." This was the mission statement printed on flyers, and from the day Perry's on Union Street opened on Aug. 20, 1969, it was exactly what people came to do.

Bay Area sports, media and entertainment celebrities became regulars and mingled with the staff and other locals. "Perry's on Union Street was Cheers before there was Cheers. There wasn't a time when I walked in when I didn't know someone there," says sportscaster Barry Tompkins, a longtime Perry's regular. "Perry has the ability to hire good people, and that is why people started coming in more and more - the staff became your friends."

Butler would agree. Aside from being in the right place at the right time, Butler credits much of Perry's success to his staff, both former and present. This includes former bartender Michael McCourt, younger brother of late author Frank McCourt.

"There was always great energy in the room, delicious food on the tables, a steady stream of cold beer and stiff martinis and a sense of decades of good times that had happened there on the beautiful tile floors," says cocktail specialist Scott Beattie, a former Perry's waiter.

The cocktails that McCourt mixed and Beattie served cost all of 80 cents for well drinks, 90 cents for call drinks. Fifty cents bought you a 10 1/2-ounce goblet of beer or a glass of wine.

Food prices were similarly rock-bottom by today's standards. A 7-ounce hamburger was $1.60 (Perry's 8-ounce burger is $10.95 today). French onion soup was 75 cents, one-tenth today's cost. The most expensive item on the menu was a filet mignon served with a sauce created by Perry's father. The price? $4.95.

Butler says he never dreamed the restaurant he and Katharine built on an impulse would still be standing today. "I've always been one to live in the present and never looked that far down the road," he says.

He also never envisioned the business becoming a family affair. After Katharine left the business, Butler became sole owner. In 2005, his son Aldy started bartending at Perry's. Now, Aldy and his sister Margie run the Embarcadero location, which opened last year. Butler's oldest son, Luke, an artist, tends bar one night a week at the Union Street spot, where daughter Sarah, who recently graduated from college, works as a server. Youngest daughter Hannah is still in college. "We might go five for five," Butler says.

That means that Butler has a new dream: to see the restaurant survive another 40 years.

Inside: Reviews of Oliveto in Oakland and Kitchen Table in Mountain View. Plus the Inside Scoop. E2-3

Food & Wine: Wine and health: Are they linked? Sunday

E-mail Cindy Lee at cilee@sfchronicle.com.

This article appeared on page E - 1 of the San Francisco Chronicle