Unable to Pay Rent, S.F. Japantown Merchants Face Eviction

0

The second floor of Kinokuniya Mall in San Francisco Japantown.

Rafu Staff Report

SAN FRANCISCO — Several San Francisco Japantown businesses are getting help from the community and local government to avoid being evicted due to inability to pay rent.

The merchants are located in the Japan Center, an indoor mall that straddles Webster Street between Geary Boulevard and Post Street, built in the late 1960s. The mall is adjacent to the Peace Plaza, site of Japantown’s distinctive Peace Pagoda.

Like other businesses throughout the city, many of the merchants have either had to close or scale back due to the COVID-19 pandemic. Due to a communication breakdown with one of the landlords, they are relying on the government for support, at least for now.

On March 16, Gov. Gavin Newsom signed an executive order allowing cities to institute emergency eviction protections for residential and commercial tenants. In San Francisco, Mayor London Breed extended the commercial eviction moratorium until Sept. 30, then extended it again until Nov. 30.

Supervisor Dean Preston of District 5, which includes Japantown, and Supervisor Aaron Peskin of District 3, which includes Chinatown, are calling for “longer-term relief that would allow small businesses until Dec. 31, 2021 to make good on back rent, while allowing landlords — themselves hampered by mortgage and other loan repayments — to avail themselves of hardship protections.”

In a Sept. 21 opinion piece in The San Francisco Examiner, Preston and Peskin said, “Already, merchants across the city are seeing credible threats of displacement from landlords. In Japantown, one of two landlords of the Japan Center mall, Kinokuniya Bookstores of America, has refused to respond to any of its tenants’ attempts to renegotiate rent, even though their businesses have been completely shut down during the pandemic.

“Restaurants and other retail businesses throughout the city are clamoring for additional monetary relief while some property owners remain unrelenting in their ongoing demands for full rent. Fears abound that as soon as protections expire, dozens of businesses, some that have operated for decades, will receive immediate eviction notices.”

They added, “The cost of inaction will no doubt be severe. Small merchants are the bedrock of our city’s neighborhood character. We cannot let them be stamped out of existence for playing by the rules in a global pandemic.”

On Sept. 23, Newsom extended the moratorium until the end of March 2021.

Kinokuniya has not responded to inquiries from the press, but property manager Kirsten Fletcher told KQED that “it is difficult all around” and noted that the landlord also owns over 50 stores in the Americas alone.

“Rent is contracted and due by the tenants. No one is making money,” said Fletcher, who noted that one month of deferred rent was offered to Kinokuniya tenants earlier in the pandemic.

Adding to the tenants’ woes, Davis Property Management, which took over day-to-day management of Kinokuniya’s properties in 2018, has increased common-area maintenance charges by 100 percent.

In addition to the San Francisco location, Kinokuniya USA has bookstores in San Jose, Los Angeles, Santa Monica, Torrance, Seattle, Portland and Beaverton, Ore., Arlington Heights, Ill., Edgewater, N.J., New York City, and Carrollton, Plano, Austin and Katy, Texas, as well as Mai Do stationery and gift stores in San Francisco, San Jose, Alhambra, Arcadia and Costa Mesa.

The other mall, originally a property of Kintetsu Enterprises Co. of America, was purchased by 3D Investments, which owns, operates, and develops real estate properties and is headquartered in Beverly Hills.

“Tenants Are Upset”

Ryan Kimura owns Pika Pika, which opened in the Kinokuniya building in 2006 and specializes in purikura or Japanese photo sticker booths.

“This has caused a lot of friction within our mall and a lot of tenants are upset about it and the lack of transparency,” he told KQED. “We send multiple emails, letters to our property managers and landlords and have heard nothing back.”

Kimura has established an online petition on Change.org titled “Keep Our Small Businesses Alive in San Francisco!” In addition to a moratorium on evictions, he is seeking two conditions: “do not allow landlords to charge late charges or default interest on rent not paid during the moratorium” and “give tenants at least one year after the emergency order is lifted to repay any rent deferred.”

As of Friday, nearly 1,300 people have signed the petition.

Etsuyoshi Shimada, owner of Neat Asian Things, which sells Japanese furnishings and goods, is seeing only 30 percent of the customers he had before the pandemic. He told KTVU, “I’m so stressed, so stressed out every day. I worry about my future.”

Anne Matsuno, co-owner with husband Richard of Kissako Tea in the Kinokuniya building since July 2019, told The Examiner, “The community has been very supportive of our business and we’ve just been doing the best we can to support each other — our fellow tenants and the community — [and]getting the word out that there are people here and that we’re still open.”

Other businesses affected by the eviction issue include Matcha Maiko, Festa, and Sakura Sakura.

Diane Matsuda, staff attorney with Asian Pacific Islander Legal Outreach, has been working with the law firm of Perkins Cole to negotiate with the landlords on behalf of 40 of the tenants.

“APILO and Perkins Coie want to do everything we can to assist the small businesses renting space in the two Japan Center Malls,” she told The Rafu Shimpo. “Some of the businesses have been in our community for over 40 years and provide goods and services that highlight our culture, traditions and history. If we lose them, 90 percent of what we call Japantown will be gone and cannot be replaced.

“The owners have put their heart, soul and life savings to stay alive during the pandemic as they know their stores mean more to them and the community than just a business.

“The response and non-response from these landlords illustrate that they do not value and appreciate the contributions and 150-plus-year legacy of the Japanese American community in San Francisco. Luckily we have city leaders who have been very responsive to our urgent request for assistance. It is our hope that we can utilize the extension of the moratorium on commercial tenant evictions to negotiate some type of agreement that will allow our clients to remain and thrive in the community.”

Allan Low, a real estate attorney who is working pro bono to help small businesses in the city’s Asian cultural districts, told The Rafu Shimpo. “The fundamental problems are that there is not enough money and the entire real estate ecosystem is screwed up. Tenants do not have the revenue to pay the rent, and suffered 75 percent or more in loss of revenues. That is not enough money to continue as a going concern even with slow, partial reopening of malls and businesses.

“If tenants cannot pay the rent, landlords will struggle paying mortgages, taxes, insurance, and operating costs. And if that occurs, the banks, financial institutions, and cities will suffer.

“But, the entire expense should not fall on tenants, and a heartless approach to allow tenants to fail is extremely short-sighted and a stupid economic strategy and will only result in retail store vacancies and city blight. Landlords, tenants, banks, and governments need to work with each other and find shared solutions.

“Japantown, Chinatown, communities of color, and small business commercial corridors are sacred places. These are the neighborhoods where new arrivals and many of our families started, and where the true startups begin. It is also the cultural bond that keeps cities and regions together and frankly keeps cities interesting and worthy to fight for preservation.”

APILO is planning to set up a page on its website to raise funds for the businesses. For updates, go to: www.apilo.org

Tags

Share.

Leave A Reply