— By Jack Morse (@jmorse_) |
After thirteen years in business, Therapy has become the latest business on Valencia Street forced out of its long term home by an exorbitant rent increase. Therapy, which over the years has grown to include several stores around the Bay Area, began as a furniture shop on Valencia and later expanded its offerings to include clothing.
It is the original furniture store at 541 Valencia that is closing at the end of August; the adjacent clothing store will remain open.
When reached by phone, Therapy’s owner Wayne Whelan explained that he simply couldn’t afford the 84% rent increase his landlord demanded. Whelan said he wanted to stay open until the end of the year, and that he was willing to pay the increased monthly rent to do so, but that he couldn’t commit to the new five year lease the landlord was demanding. The landlord, the Daljeet family, wouldn’t have it. “There was no negotiation. It was like, ‘take it or leave it,’” says Whelan.
Faced with a rent that increased from $5,700 to $10,500 as of August 1st, Whelan paid the higher rent for August, but decided that he would be unable to sign a new long term lease at the increased rate.
The closure of Therapy comes after a series of established businesses have been priced out of 16th and Valencia. Earlier this summer, Idol Vintage was forced to move to 26th and Mission after their landlord attempted to raise their rent by $2,500.00. And recently, Clothes Contact announced they would be closing at the end of the year.
In conversation, Whelan mentioned that he was never late on rent, and that there is simply “more demand for [Valencia Street] than there is Valencia.” Whelan believes that with the average “consumer on Valencia Street [being] a hyper-affluent tech person,” a Valencia Street store “becomes a billboard to promote [a company’s] brand.” The outrageous rent paid simply becomes another line item in a company’s marketing budget.
This is the very situation that many local business advocates have feared, and was in many ways the driving force behind the fight to keep Jack Spade out of the Mission.
Though a mix of frustration and sadness can be heard in his voice, Whelan explained that he has “no hard feelings” toward whoever the eventual new tenant is. “Every store that closes is someone’s heartache, and every store that opens is someone’s dream.”
Those of you who will miss what Therapy had to offer, take heart: Whelan had already been in the works to open a new location on Park Street in Alameda, and it now appears that he will shift furniture sales to this location. In addition, Therapy is running a 20% sale on its furniture until the store’s closing on the 29th of August.
It is hard to not see Therapy’s closing as a symptom of a much larger problem that the city as a whole is now facing. When a well established and successful purveyor of hip furniture can’t afford Valencia Street (second to only the Design District for it’s love of expensive hip things), we’ve truly bypassed real estate “bubble” status and are firmly in that of “affordability crisis.”
[Photo: Capp Street Crap]
Comments (63)
The end game here is obvious. Huge rent increases until no one but chains can pay. Then alter/amend that law so the empty storefront people can be appeased. You think Valencia (or Divisalencia) is bullshit now, just wait a few years and the outdoor mallification of those streets will be completed.
You are entirely correct. The rules that are in place to preserve the city’s culture by keeping out monied chain stores are useless without some form of limited commercial rent control. Either we go one way and ammend the chain store prohibition and we get “outdoor mallification” or we double down against homogenizing influence of money and enact stronger legislation against such mallification.
Commercial rent control is not allowed under State Law. Sorry. Try again.
Outdoor Mallificaiotn it is!
Commercial rent control may not be allowed under law, but it certainly seems necessary in the face of the out-of-control greed that is sweeping this city. I don’t know if you are one of the greedheads or not, Local Property Owner, but if you are, you should be ashamed of yourself. As for the Therapy space, I really hope it remains vacant for a good long time. Would serve the bloodsuckers right.
Commercial rent control would just be a way of making it impossible to open new business without loads of money to burn and acceptance of lower margins. Why should Old Taquiera enjoy inherent government-enforced advantages over New Taqueria, who would have to charge more for the same food due to their higher rents?
You lost me at “out of control greed.” Is there such a thing as “greed, but in control?” Or could you maybe add a little more color into the distinction between simple greed and out-of-control greed?
The current situation is lamentable, and I’d like to see a system of levers and pulleys and gauges that let us understand and exercise some control on the marketplace to prevent situations like this one, but commercial rent control is a non-starter and simply bad-mouthing real estate investors isn’t a very solution-oriented response to the current market conditions.
Greed is just a fake slur on self empowered people, by losers who can’t compete.
Exactly.
Commercial rent control?
Go fly a kite, you insufferable cunticle.
You want property owners to subsidize your rents for your profit-making enterprise, selling
knick knacks to fleabag millenials?
Hahaha.
All you fucksticks might want to move to Caracas. Although Hugo’s gone, the new guy Maduro still spurs on welfare-queens and wastrels like you to loot electronics stores, at will.
I’m sure Ed Lee / Ron Conway will cough up the loot, to buy you and your friends one way
tickets to Caracas.
El Socialismo Se Conquista Peleando !
Sexism and racism! Right on!
Wow, don’t the Daljeets have any regard for the many years this merchant has kept the storefront occupied? A rent hike is one thing, but an 84% rent hke is avarice at its ugliest.
Wecome to your new and improved San Francisco.
Well, no, why would they? If the guy next door is getting X dollars per month, of course they want that, too. The landlord and Therapy had a lease, and that lease expired. The landlord was probably receiving well *under* market for the past couple years, as that lease continued through the beginning of the boom. Therapy benefitted from the bargain, then. Now, the contract is over.I understand the desire to keep things as they are. I certainly understand the desire not to turn Valencia into Melrose Ave. in LA. But I don’t think we accomplish that by expecting individual landlords to subsidize particular businesses. We can’t expect landlords to be “good guys” by leaving money on the table. I wish I had some idea for how to do it, however - I don’t. Maybe all would-be business tenants could embargo spaces with rent they perceive as too high? So far, I’m unaware of the Valencia Street Merchants trying to organize people that way. They’re trying to keep out the chains, but the prices are going through the roof, anyway. The market is doing its market thing.
There’s nothing to do. I’m priced out of owning a home in all but the extreme southern area of the city, and I’m an attorney. My girlfriend and I make a salary that would be very nice in most cities, but here we’re priced out. Once we get tired of city living I figure we move to Austin, maybe Portland. If things go as they are going, it will be insane how wealthy this city will become.
It’s all wall street play money anyways. This tech boom isn’t based on real commerce it’s fictional (yet sadly very real to us) wealth generated by the Finance industry, which only exists to extract wealth from the real economy. That’s why we’re all hurting and the tech/finance/insurance/real estate industries are strong.
Google and Apple at least, are extremely profitable. Those companies are not going anywhere, I take your point though. Whether a group of people getting billions for a messaging app makes long term financial sense, is certainly up for debate.
Unlike 15 years ago, Google, Facebook, Apple, Genentech and Salesforce are ongoing profitable enterprises that comprise a significant chunk of the local economy which was the inverse of the economic froth that characterized the dot.com boom. Even the froth this time around is more substantial, with venture capitalists much more conservative on what startups they’ll fund. Combine that with a “liberalization” of capital and investment flows, and we see foreign capital seeking safe haven in US urban real estate. The opportunity to stabilize the Mission was in the 2000s.
Yes, those VCs are so cconservative now that they stick to safe investments like the Yo app.
20 years ago the Mission was considered a very risky (and dangerous) investment.
The insanity has already arrived.
It’s quite evident that we can’t expect rent-seekers to be good guys. But we don’t have to excuse greed as an immutable force of nature either, any more than we excuse assault and murder on the grounds that we’re just doing what comes naturally. The Daljeets and their ilk are what’s wrong with the city, not the vilified tech newcomers who unwittingly enable them.
Agreed. The problem is less people willing to pay high rent, but the people DEMANDING high rent.
San Francisco Community Land Trust is a good example of how to stop this. If we are serious about wanting to protect San Francisco, we can’t sit around expecting other people to protect it.
What about crowdfunding campaigns to help business owners make rent? Or benefactors who purchase property in order to protect it, not flip it? What if any company above a certain size that wanted to do business in the city (or business which significantly impacts the city) had to chip into a fund that was used to help subsidize rents, stock food kitchens, supply shelters and construct truly affordable housing?
I love seeing people shell out hundreds of dollars just to get a new app feature early on kickstarter, but people aren’t willing to chip in $10 or $20 to help rebuild the Silly Pink Bunny Statue or get the Tamale Lady a storefront or, say, save Therapy.
The time to have done massive conversions of rent controlled apartments into limited equity CLTs was in the 2000s. But the SFTU and CCHO objected to that, the SFTU afraid of conversion and the CCHO treating affordable housing dollars as their personal property.
I am constantly dumdfounded by the naivete of San Franciscan pinheads.
The misplaced generosity and the subsequent regret cycles are a constant tedium here.
Alex:
“but people aren’t willing to chip in $10 or $20 to help rebuild the Silly Pink Bunny Statue or get the Tamale Lady a storefront “
Turns out your beloved Tamale Lady, Virginia Ramos, is a Class A cunt.
A first order slumlord, no less !!
Latinas can be greedy dicks too? Wow ! How surprising !!
http://modernluxury.com/san-francisco/story/the-missions-beloved-tamale-…
Such a thing can’t be. Just can’t be. So lets whitewash the story :
https://missionlocal.org/2014/08/tamale-lady-struggles-as-landlady/
Very interesting that her ethnicity is brought up. There’s only one reason for that and it isn’t pleasant.
it’s not interesting at all. sadly, you /want/it to be racial inflammatory via your vague trolling, but it’s not.
there is very real racism in this world. this isn’t it.
a latino person by nature is ____… //racism
a person who is ____ is also latino… // not racism learn the difference.
The Tamale Lady as landlord is total mindfuck for the simpleminded and naive. She is extremely hardworking, frugal, and smart enough to understand that owning real estate is the key to having real security in this city.
Unfortunately, she’s learning about the backwards, market-destorying laws that have created an entitled, “inconsiderate” (her word) class of renters that believe they should be subsidized for life.
I say: Exit the rental business via the Ellis Act. Convert to TIC. Sell the units to other hardworking people who want to become owners.
Problem solved.
@Mariacha: It is really tedious for people to whine about others “greed”. Basically, you seem to be saying that you (or others) should be subsidized. But you don’t explain why that is. Why should a landlord (who is obviously in the business of making money by renting real estate) subsidize a furniture store (that is in the business of making money by selling furniture)? One could equally say that the furniture store owner is greedy for demanding that he receive below-market rent (or, more correctly, that you are making a greedy demmand on his behalf).
It seems that you (like many others) feel that you are entitled to certain things. If you don’t get them, then you blame that failure on others’ greed. But the person who worked hard for those things has a very different perspective and doesn’t understand why he should be subsidizing you. You can’t see that perspective because you are blinded by jealousy and your own greed.
Its basic demand and supply, the lanlords have owned this for almost 30 years and they have seen the bad and good in the area. They deserve to do what they want its their property anf they are not breaking any rules.
It’s not “avarice,” it’s “capitalism.” But I repeat myself.
13 years huh? Who did they displace when they moved in during the first bubble?
2001 was the first (I think you mean most recent) bubble? According to whom? By 2001, the bubble had already popped – 9/11 put the nail in the coffin, but most local startups had done their 1st or 2nd round of layoffs by then.
Your larger point – that we are all displacing the people who came before – is a good one, however.
Thanks for the correction. This probably means they probably got a sweet deal on the lease.
Things change, folks.
Oh yeah. Nothing’s wrong here. Everything is OK as it is.
The question isn’t whether it’s wrong or right. There are lots of people who disagree with this who don’t think it’s morally or ethically wrong, just unfortunate… just ‘business’ … just ‘capitalism’ … and normative arguments won’t appeal to them.
The question is, “when are we going to start doing something about it?”
A boutique that sold custom made men’s shirts went out of business, I don’t remember it’s name, I think they closed down.
A 20-something artist who makes min wage working at a cafe isn’t really displacing anyone. I don’t see how you can compare a newcoming min wage earning artist with a venture capitalist who earns a six figure salary.
Wow. I remember when it opened. This is fucking awful.
I also remember when Therapy opened and people called it twee and bougie and thought it ruined the nature of Valencia Street. I’m sure you’ll all be equally up in arms when Therapy’s replacement gets priced out too. Beat goes on…
How dare you spoil all this righteous indignation with rational perspective and relevant anecdotes? How are these people supposed to assuage their white and/or tech guilt if they can’t bitch and whine publicly about a problem they know they’re helping cause?
Well played :)
“I also remember when Therapy opened and people called it twee and bougie…”
pretty sure those people did not desire to see it replaced by chain retail, though.
It’s not being replaced by a chain. There are some fairly strenous laws to prevent this.
I bought some of my first furiture from Wayne and Jean, when they were first on Guerrero street. Those were the days… They will prosper in Alameda and I’ll look forward to visiting them there.
I wonder how many of us on this thread were in the hood twentysome years ago. I recall the block Therapy is on was filled with used appliance stores, Daljeet’s was running a exotic costume shop for years, then a local made menswear shop for a few years, the space was vacant for awhile before Therapy moved in. Just sad to see another small business get run out from Valencia St, glad that I don’t live in the neighborhood anymore, it’s ridiculus to see all those trendy restaurants and cafés move in, where are the locals going to eat, shop and live with 50k? Great to be a landlord in SF now, but for how long? Did I hear bubble?
So there seems to be consensus here - landlords should not charge what the market will bear, but some lesser amount. Otherwise, they’re greedy. I have some questions. First, how do we determine what that lesser amount should be? Should it be a uniform per square foot price? Based on what as a starting point? Does it matter if the business is Therapy, or Plumpjack, or Prada, or that taqueria that makes that one burrito we really like? Do we have a committee to make the determination? What sort of materials should it have access to in order to establish the “fair” rent?Second, since we’re dealing with commercial leases and, therefore, business tenants, should we, in the interests of fairness, regulate the tenant’s business prices, too? I mean, if we mandate rent X for storefront Y, we should certainly impose some sort of price controls on the tenant, so the tenant doesn’t get too rich. What should Therapy’s acceptable margin be? Should it vary between sofas and birthday cards? Can we make Tartine’s bread cheaper, while we’re at it? I’d eat that everyday, but man, it’s pricey. I guess I’m just curious about the math we’re apparently going to do to make sure everything is just right.
How dare you sir bring logic and reason to this debate. Not to mention wit and sarcasm…shameless you are.
Also, what other costs have gone up at least 84% in the last 13 years? Coffee, real estate, gas, housing rent, gold, oil, silver…pretty much everything except the crap you don’t need. Yes Valencia is hot but I would wager rent on other streets has doubled if you compare it to 13 years ago. The paper in your pocket is increasingly useless and this isn’t caused by landlords.
If 16th Street and near Mission wasn’t filled up with hotels where taxes pay for crazyies and drug addicts to live in, many of these new businesses would be built on Mission Street, 16th Street, and South Van Ness instead of being forced to concentrate only on Valencia. Get rid of the SRO drug spas, and half the Valencia Street fever will disappear.
or just don’t be a greedy property owner. I know a greedy landlord who constantly tests the limits of what the market will bear (and properties often sit vacant), hates to spend money on maintenance and repair, and is usually busy travelling the world. I also know a generous landlord who continually place their units at the lower end of current market rate, stays on top of maintenance and repair and is very much involved in the day to day operations. both these owners have multiple properties equalling many millions of dollars, but one is a total douchebag. maybe there needs to be a property owner review/rating database or something to help renters avoid shitty owners.
+1 Yelp for landlords.
Yelp for landlord? Anyone wants to raise funds for a new start up?
idiot landlords looking for the short term buck.
REAL commercial landlords who are looking for the long term don’t pull this crap. But again, I look at who is doing this and well…hmm.
Boycot Daljeet stores… they own quite a few cheap shops in the haight.
You don’t know shit about the family so keep trolling
They should move to the Excelsior. There’s a whole world past Silver. It’s diverse. No tech shuttles.
Bummed. This was the one clothing store that you could get cool, unique things at a good price. Another high priced retailer will move in and then one more reason not to go to the Mission. I literally only went for Therapy and Shoe Biz lately.
Read the second paragraph, maybe you’ll feel better.
Fear not, the market will correct itself.
I think the we are already seeing signs of the residential real estate market in the Mission stabilizing (albeit at an all time high). Also, the 19th st. commercial space under the uber expensive new condos has been empty for a few months now. I suspect it’s a sign that the rents they are charging are unreasonable to most. As long as we keep the chains out, Valencia will be fine. It can only support so many coffee shops, wine bars, and restaurants. There is a LOT of empty commercial real estate on valencia. I just don’t see them all filling up at the rates landlords are charging.
But it’s imperative we keep the chains out!! I wholeheartedly agree chains will underwrite a Valencia store that doesn’t make money to be able claim they have a store on Valencia. That will most certainly destroy the commercial fabric of the street. Nobody wants to walk through an outdoor mall in SF. That’s what the burbs are for.
Interesting theory. Hayes Valley has been very successful at banning chains and look at it now.
Correct me if I am wrong but the area of hayes valley you are referring to is only a few square blocks correct? Isn’t it also close to the opera house, theaters, ballet, etc.? That’s a lot of extra tourist/non-neighborhood traffic. That’s not to say, Valencia isn’t attracting a lot of non-neighborhood traffic, but valencia corridor is much longer and more spread out. Also new construction typically has less commercial space available. If you look at the spaces on valencia, most are deep with a small street presence. It’s what creates dense commercial environment. In newer constructions, the spaces are tailored for light and general airyness; the same square footage takes up a larger width of the street. This is all a way of saying, there’s probably just less commercial space available in Hayes Valley.
Because of the greedy commercial landlords, many excellent businesses have been forced to shut down and others to raise their prices. Ultimately, it f—-ing sucks for us. How can this be happening, we need to do something, we are all getting screwed.
The exorbitant rent charged just adds another line item to a business’s marketing expenditure. Click here
Each store that closes represents the heartbreak of someone, and each one that opens represents the dream of someone else for those who are looking for therapy to stop porn addiction.
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