Saratoga News
News
Rent increases for Quito Village merchants
By Shannon Burkey
Just two months after developer Peter Pau purchased the Quito Village Shopping Center for $26 million, the small business owners who fill the majority of the storefronts say they feel as if they are slowly being pushed out to make way for something bigger.
Several of the tenants whose leases are about to expire said they have gotten notices from the Sand Hill Property Company, Pau's company, informing them of rent increases of $1 to $2 per square foot. Many are concerned about how they are going to make it with the increase.
"When you're self-employed, the money comes out of your pocket, and just because they bought a property for $26 million doesn't mean I'm going to do more business," said Mike Baxter, who owns a State Farm Insurance branch in the center. "I'm going to move as a result because I can't pay the higher rent."
Baxter said his situation is not as bad as that of some of the other tenants, though. With only a small office space to worry about, moving will not be too difficult for him.
Some of the other tenants have put thousands of dollars into renovating their spaces to fit their needs, and moving could end up costing thousands more.
"My first thought was what am I going to do, am I going to lose my business? I can't move, but how can I come up with the extra $1,200 a month?" said one tenant who wished to remain anonymous. "I've worked really hard at building this business, and now I could just lose it all."
The tenants say the increases are unfair for a property that is not on a main road, doesn't have any foot traffic and does not have any large chain as a draw.
"Because there is not a lot of traffic here, we've had to work even harder to build up our businesses," said Nilou Rahimi, who has owned a spa at the center for 12 years.
Rahimi said her lease is not up until January so she has not been notified about an increase for her space. But hearing about what her neighbors are going through makes her worry that she is next.
"If it happens to me, I would have to move," Rahimi said. "It worries me to think about it."
Pau, who owns and is redeveloping property throughout the South Bay, said there is no plot to push tenants out and there are no plans for any big development on the site.
"I hear the same story from every property I buy," Pau said. "Tenants always say the landlord is raising their rents to try and get rid of them. I'm just trying to do a market rate adjustment. What they're paying now is not market rate. If they think that is too high, then they should find somewhere else they can afford."
When the property was purchased, Pau said he intended to make improvements to the 80,000-square-foot, 30-year-old center. And now he said that is all he is trying to do.
"It's not that great of a center. The layout is poor, the parking is poor, the signage is poor and there is no visibility," he said. "I'm not saying it is a worthless property; it's obviously a good location, but the center itself is not up to Saratoga's level, and we would like to look at ways to improve it."
Those improvements, he said, could range from a paint job to demolition and starting over.
Before he makes any plans for the improvements of the center though, Pau said he would like to meet with the city of Saratoga to see what he might be allowed to do.
Community development director John Livingstone said that so far Pau has put nothing on the table. A joint study session with the city council and the planning commission is set for Dec. 5 to discuss possible ideas for the site.
"They may or may not have something in mind, but from what he's saying, he is wide open to hear what the community has in mind," Livingstone said.
The business owners, who say they like the neighborhood center just the way it is, worry they are paying for what the center may look like in the future and that may put them out of business.
"This increase is not subtle and the rent is not valid for this area," said Gil Cortez, owner of a restaurant in the center. "We would all like to have things a little more modern, but at what expense?"
The study session to discuss the future of the Quito Village Shopping Center is on Dec. 5 at 5 p.m. at Saratoga City Hall, 13777 Fruitvale Ave. For more information, call 408.868.1200.
