Eduardo Reyes realized a longtime dream back in 2001 when he bought a Guatemalan restaurant on Mission Street.
Now After 11 years in business, Reyes, the owner of Acaxutla, will close his Mission Street restaurant at the end of the month after failing to negotiate a new lease with his landlord. Reyes isn’t the only one having to pack up his business.
At least two other struggling businesses left Mission Street this year. Mil Colores, a clothing store, General Merchandise, an electronics store, left this year after their respective landlords declined to sign a new lease. Gaby Salas, the owner of Charanga, told Mission Local last year that she had to close because her landlord also declined to renegotiate a lease.
Reyes, a Guatemalan immigrant, fell behind on the rent after the recession hit in 2008, as many of his customers — many of them Central American
immigrants — were out of work, he said.
“They’ve lost their jobs, and I understand they don’t have money to spend,” he told Mission Local in 2009. “I don’t fault them.”
He tried to revive his restaurant, which specializes in Guatemalan and Salvadoran food, by catering to new Mission residents, he said. He stopped serving breakfast — once a staple to his business model — and started focusing on dinner.
“We started developing a good dinner clientele,” he said, adding that he was able to pay off the back rent thanks to the resurgence of business.
But it was too little too late, he said. Recently his landlord told him he would not offer him a lease. The restaurant’s last day will be June 30.
“I would recommend to merchants that they make sure they have a lease,” Reyes said, noting that he had been on a month-to-month contract since 2007. “I had a good relationship with my landlord, so I didn’t worry about having a lease.”
It is sound advice, according to Dairo Romero, of the Mission Economic Development Agency.
“Businesses shouldn’t go on with month-to-month contracts,” Romero said, because it exposes them to the whims of the market.
Just a few blocks away, Sandra Billorin closed her boutique on June 1 after three years in businesses. She declined to speak to Mission Local but her landlord said the decision not to renew the lease was mutual.
When Billorin talked to Mission Local after opening in June 2009, she was optimistic that her business would succeed, as many in the community knew her from her ten years as a waitress at Jim’s restaurant down the street.
“They weren’t making any money,” said Nidal Nazzal, the landlord’s son. “There are so many places like hers on Mission Street, you need more vibrant new ideas. The whole Mission is changing.”
Bruce Chen, who is managing the property where General Merchandise was at 2221 Mission Street, said a similar situation happened there.
“The previous tenants were there for ten years, and were able to secure low monthly rent,” he said.“Their lease was up, so now the landlord wants to raise closer to the market which is just a bit higher than the existing.”
The new rent – $5,400 for 2,700 square feet, or approximately $2 per square foot – is modest compared to ones on Valencia Street where in some cases prices have reached as high as $5 per square feet for certain buildings.
“We are asking very conservatively,” Chen said. “We had a few inquires, but so far no offers. We will see.”
That’s also the case at the former Mil Colores space at 2487 Mission Street where rent has also increased to match current demand.
“We had a few phone calls,” Nazzal said referring to the former Mil Colores space. “Everyone is just kicking tires right now.”
Nazzal said he and his father are in no hurry to fill the space. They’re waiting for something with a good concept.
“The street is turning around. It is almost at the tipping point,” he said referring to plans by Austin-based Alamo Drafthouse to develop a five-screen, 900-seat theater at the site of the New Mission Theater.
“The old Mission Street stores have gone on for years, that’s phasing out,” he said. “Different types of people live in the Mission now. More yuppies, people who have more money.”
At Reyes’ restaurant, architects and designers have come in and done measurements of the space. The landlord has already found a new tenant, Reyes said.
“[My family] is going to have to look for work because this is what sustained us.” he said. “We lost everything.”