The back patio at Chili Lemon Garlic. Photo Richard Vivio

A popular Thai restaurant located at 3166 24th Street in the Mission, closed its doors May 31 after the realtor ended their contract.

Business owner Richard Vivio of Chili, Lime & Garlic known as CLG said that the main reason the contract was not renewed was because the new rent was $5,000 a month – double the price they were paying – and they could not afford it.

The move comes at a time when other businesses are vacating the 24th Street corridor. One of the storefronts on the side of where CLG once stood is vacant and the one on the opposite side appears vacant.

Vivio works in construction and translates for his wife Ann Chomwong who owns the business. Chomwong came to the United States in 2000 from Thailand and worked in several Thai restaurants until she started CLG in 2003 with three other business partners.

Chamwong said that paying $5,000 a month would have been impossible for them because they were struggling to pay for the restaurant groceries (whose prices have also increased dramatically), as well as utilities.

Building owner Glenda Gutierrez became landlord of 3166 24th Street in June 2004 when she bought the property from her brother Eddy Gutierrez. She also owns the property at 3126 24th Street.

Ironically, Glenda Gutierrez works as a leasing specialist for Urban Solutions, a non-profit South of Market organization. Their mission statement reads: “Urban Solutions fosters the well-being of disadvantaged communities by helping to increase neighborhood commercial vitality, strengthen small businesses, create jobs, and encourage diversity.”

“Fair Market Value is the asking price,” responded Gutierrez in an email to El Tecolote. “The restaurant has many upgrades, two ADA (Adults with Disabilities Act) bathrooms, a commercial hood, (an) ansul (fire suppression) system, patio and tenant improvement allowance.”

The rent for the 1,300-square-foot-unit would be $3.84 (per square foot) if the rent were $5,000 dollars. “This is above-market rate rent,” said attorney Malea Chavez, a legal consultant for small businesses in the Mission and the Mission Economic Development Agency (MEDA). MEDA works to help small business in the Mission. Chavez is not an employee of MEDA.

“These are Valencia Street prices,” said Chavez. “Other restaurants in the area are paying $2.25 to $3 a square foot. For that portion of the 24th Street corridor, $4 is a lot of money. It’s a more local serving corridor, where many Mission residents shop, and the cultural integrity of the neighborhood is still very much alive. This is what gives the Mission its character.”

Vivio said that he learned about his eviction by chance when he came across an ad in the real estate classifieds in March announcing the availability of his restaurant with the rent price listed as $6,000 or $4 per square foot. “I feel like basically we must take our pots and pans and go,” he said.

Vivio said he saw the ad when he was comparing rental prices in the neighborhood. The ad also said that the restaurant equipment was negotiable. “How can you negotiate the equipment when you don’t own it?” Vivio questioned, adding that his wife and business partners bought the equipment from the previous owner.

But Gutierrez denied any wrongdoing. “They (CLG) failed to exercise the option [to renew] in a timely matter,” she said. She added, “The advertising summarized the restaurant features. Included in the price is a tenant allowance. This allowance includes purchasing equipment that has depreciated and acquiring needed permits for the new business.”

Vivio countered, “She’s taking advantage of her knowledge. I only heard from her one time [during the option to renew period], that was March 7 (by telephone).”

Gutierrez did not own the equipment, but she could have acquired it as part of a negotiation for back rent in the amount of $7,000.

Gutierrez claimed that Vivio failed to pay the annual rent increase for the term of the lease. The annual rent increase is two percent or the annual percentage rate based on the Consumer Price Index (CPI), which is published by the U.S. Department of Labor, whichever is higher. Guttierez however, according to Vivio, never made mention of the yearly increase until the subject of the equipment came up.

Vivio said he did not receive the notice of an annual rent increase until the end of the lease term. He stated “For four years she never said anything about raising the rent (which was built into the lease). She waited until the end of the lease to charge us for the annual increase in rent each year.”

Gutierrez stated otherwise. “Regarding the rent, the original tenants agreed five years ago to pay annual increases. Unfortunately, each year of the contract, the increases were not paid by the tenant. (The) Landlord (Gutierrez) decided after a few letters to charge the tenant the CPI amount in one lump sum as this increase was never paid through the past years.”

CLG has relocated to 518 Bryant Street in the South of Market district. On a Thursday afternoon the street is empty with the exception of a few cars passing by. Vivio said that even though they had adjusted to the neighborhood on 24th Street and the new location does not have the same traffic, he will remain optimistic. CLG opened for business on Monday June 9, with three employees.

“I liked the Mission. We had a nice restaurant and a nice clientele. My wife made friends up and down the block. A lot of our customers were mothers and kids,” said Vivio.

Chavez added, “It’s disheartening seeing local-serving businesses being displaced due to higher rents. It doesn’t support the stability of our small, local-serving businesses.”

Gutierrez responded to El Tecolote via email with, “I do not engage in allegations and name calling as it is disrespectful and negative. Please understand that CLG is a partnership (three partners) that dissolved and their lease expired. The remaining partner is disgruntled. I hope that you are professional enough to weigh both sides of this issue. Painting a story that harms the tenant or the landlord is unfortunate for the 24th Street community. Lastly, trying to imply that Urban Solutions is part of this issue is absolutely false and unfounded. My landlord/tenant issue is personal and outside my work with the organization. Have a good weekend.”

CLG’s new address is 518 Bryant St., SF. Tel. 415-826-8199
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