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Friday, January 29, 2010

Vendors Were Ousted from Ferry Building

Posted By on Fri, Jan 29, 2010 at 7:58 AM

click to enlarge The landlord refused to renew the lease for LuLu Petite, which closed last Sunday. - MELISSA W./YELP
  • Melissa W./Yelp
  • The landlord refused to renew the lease for LuLu Petite, which closed last Sunday.
Are vendors being forced out of the Ferry Building to make way for tenants willing to pay higher rents? Two recent departures told SFoodie they didn't leave willingly, and there are unsubstantiated reports of two more vendors who've managed to stay only because they've threatened legal action against Equity Office Properties Trust, the company that manages vendors at the Ferry Building Marketplace.

Both Tsar Nicoulai Caviar Café (which moved out earlier this month), and LuLu Petite (which closed Jan. 24) were original tenants in the Ferry Building, after its launch in 2003 as a high-end artisan food destination. Both told us they didn't choose to leave, at least not when they did. "It was the Ferry Building's choice to not renew our lease," said Leiann Noel, Tsar Nicoulai's director of corporate operations. She declined to elaborate -- "that will only get me in trouble," she said, before adding, "It was not our desire to depart at that particular time."

LuLu Petite director of operations Simon Ng sang a similar tune. "It wasn't really our decision to leave. Our lease ran out and they didn't renew it. We would have liked to say, " Ng said, referring to Equity Office, "but we understand they didn't want to renew." Ng suggested that, despite a slowdown in the economy that became noticeable in LuLu Petite's sales last summer, the Ferry Building location was still viable. And he pointed to brewing turmoil among the other businesses. "There are a lot of upset vendors. There's definitely a change in the air in the building."

Mastrelli's Delicatessen announced it'll leave the Ferry Building March 15. Owner Joe Mastrelli was unavailable or comment, but deli manager Jim Quimby reitereated to us what he told the Chron's Scoop earlier in the week: When Mastrelli tried to renegotiate with Equity, he was told the rent would by jacked up as high as an additional 70 percent. Like Ng, Quimby said that the problem definitely wasn't a drop-off in business at the Ferry Building.

It's unclear precisely why Equity Office didn't renegotiate leases with Tsar Nicoulai and LuLu Petite. Equity senior property manager Jane Connors suggested that turnover was part of the natural business cycle, and that the decision the leave the Ferry Building was driven by the departing tenants. "The nature of retail is that leases roll over," Connors said. "It's always hard to have tenants leave. Some of our merchants have pursued other business plans, there are things that happen in someone's business, even in their personal lives, that causes them to leave."Connors denied that the Thursday street-food market outside in the Ferry Building's arcade, which launched last summer, has negatively impacted businesses inside -- a charge lobbed by Ng, who said most street-food Thursday customers never even make it inside the building.

Connors pointed to the newest Marketplace tenants Il Cane Rosso and Blue Bottle (and to Heath Ceramics, which should open in the Tsar Nicoulai space in March) as evidence that Equity is committed to bringing in genuine local artisanal businesses. "They're an amazing addition to the marketplace community that we continue to support," Connors said. "You do want your tenants to succeed, " she added, referring to Equity Office. "You become a partner in their success."

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