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With rent doubled, Sweetwater owner quits
By Nathan R. Huff
Los Gatos' Sweetwater Store became another casualty of a commercial real estate market that's paralleling the booming residential market, closing its doors on June 1.
The Sweetwater Store, located in the Los Gatos Shopping Center just north of Highway 9 on N. Santa Cruz Ave., was the only retail source of bottled water in Los Gatos, and boasted a loyal clientele of Los Gatos and mountain residents.
Randy McCalla, who bought the store in 1992, said the doubling of his rent coupled with a lack of available retail spaces in Los Gatos led to the store's closing. McCalla was approached in October, he said, and told the rent would go up by more than 100 percent.
"They said 'this is what we'll be raising the rent to', and I just laughed, because there's no way," McCalla said.
Sweetwater's former home becomes the second empty building in a section of the shopping center owned by cattle rancher Tim Swickard of Chico, and managed by Main Street Realty and Investment Company. Pro Signs, which used to rent the space next door, moved to its new location on Los Gatos Boulevard a year ago.
Johnny Mesa, who owns Main Street Realty, said the new rent was in line with surrounding areas. "Everything else on the boulevard is $3 [per square foot]," Mesa said. "There's not many people in town paying $1.40." He added that he did not oust McCalla, but gave him more than six months to decide what to do.
Mountain Mike's owner Jim Johnson, who also rents from Swickard through Main Street Realty, said his business was faced with the same increase. For the last year-and-a-half, the pizza restaurant has rented month-to-month while trying to reach an agreement. Johnson said rent would increase by 120 percent--up to $7,000 a month--but that moving the store would be far more expensive. Johnson said he had also made an offer to buy the building, but the owner was not interested.
"We're gonna bite the bullet," Johnson said. "We raised our prices a bit, but they're still lower than most of the places. My piece of the pie just gets a little smaller." In defense of the landlord, Johnson said that, while he hated to admit it, the new rent was "about the going rate."
McCalla said there was no way the Sweetwater Store could remain in the black with such a large rent increase. The store liquidated much of its inventory--bottled water, softeners, purifiers and home filtration systems--over the last few months. McCalla said he would continue to sell water-related equipment from his home, but not bottled water.
The Sweetwater Store searched for a new home, but McCalla said there was nothing in Los Gatos that met his requirements for space and parking. After months of fruitless searching, the 63-year-old McCalla said closing became the only realistic option.
"If you look around, many other one-man businesses--the mom and pop stores--have quietly folded up the tents and left," McCalla said. "A lot of other merchants I've talked with are afraid the same is going to happen when their leases comes up."
Katherine Ingram, a Los Gatos Sweetwater customer, said there is nowhere else in the area where she feels comfortable buying water. "I practically live in water, and I'm very sensitive," Ingram said. "This is really sad, and there is no other water store."
McCalla said a lot of customers were upset to hear about the store's closing, adding that the interaction with his regular patrons was what he'd miss most. "I'd enjoyed [running the store] very much," McCalla, who plans to stay busy tuning pianos, said. "I've met a lot of great people."
No tenants have committed to the vacant spaces yet, but Mesa said the company was negotiating with two or three interested businesses. He added that the two spaces could be combined into one storefront, or remain separate.
According to McCalla, the building is in need of significant improvements. The roof leaks, he said, and water occasionally comes through the light fixtures. Mesa said it was a matter of deferred maintenance, as neither McCalla, the landlord nor the previous property management company had kept up the building.
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Los Gatos, California Since 1881
