Business dilemma: I own a small but popular bar in NYC. The lease is coming up for renewal very very shortly. The landlord had previously told me that they would extend the lease for a certain amount of money, but has now changed that amount to be unreasonably high.
Very long complicated situation inside.
posted by anonymous to work & money (13 answers total)
We (my manager and myself) have been looking for another location to move the bar to, but haven't found one yet, so if we are able to move it it would mean that the bar would not exist for several months until the new space is completd, leaving staff out in the cold, and customers looking for a new favorite hang out.
1)The landlord has a history of forcing out bars in their buildings and buying from them the liquor license (cheaply) and transferring it to a new tenant, who has paid them significant key money.
2) I received a letter in the mail from landlord saying that they did some repairs in the basement that resulted from a leak coming from our premises. The letter stated that they had already taken $3200 from our security deposit, and to replenish that amount as soon as possible In addition, further repairs are needed to the amount of $8500, and they are waiting to get that from us until they do them.
We did in fact have a leak, and fixed it when notified as soon as we were told about it. We do not have free access to the basement. This is the first I have heard of any repair being necessary. There has been 6-8 inches of water leaking into the basement for years, that when we did have access to basement 5 years prior, we notified the landlord about repeatedly (after confirming that it was NOT coming from our business). They did nothing about it. In addition to the standing water, there was a boiler explosion that damaged a good part of the rear area of the basement. Since I haven't seen the repaired area, I don't know if this is in the same area or not.
3) In negotiations with the landlord re the amount of the upcoming rent, I told them that what they are asking is far above market rates (it is, I have been looking at spaces in the area), they have been coming down, but not to a reasonable level.
4)During this conversation, the landlord asked if I would be interested in selling the license to someone else who was interested in the business. I said that I wasn't totally opposed, and to give my number to the person.
5) I received a phone call from the tenant who has the space behind us on the ground floor. I had spoken to him a month or two ago when he called me and asked me if I was interested in selling him the business. I told him I was not interested at all. I wondered how he got my telephone number, as no one at the bar admitted to giving it to him.
During this more recent conversation, he told me that he would be interested in buying my license and continuing the business as is, at the ridiculous rent that the landlord wanted to charge, but only for a year or two.
The space is very small, there is a very very small chance that a bar would be able to break even at that rent When I threw out a ridiculously high number for the liquor license, he said that he was still interested. I then told him that based on my experience (I have other bars and restaurants and have been in the business many years)it would be virtually impossible for him to not lose money doing what he was telling me he wanted to do. He didn't seem concerned. He has never been in the bar business, and I got the impression that he has money to burn.
I told him I might transfer the license to a new location regardless, so I might need it, so it would not be available for sale, but also told him that if I couldn't transfer the license I might be interested in selling it.
Dwelling on this over the weekend, it occurred to me that he is probably in cahoots with the landlord to take over my business, and the landlord seeing an opportunity to make a wad of cash is going along with it.
Now, I don't believe in screwing people over, and I don't like being screwed over myself. I am very tempted to not sell the license even if I no longer need it, just because I find this behavior odious. However, the amount we are talking about here would go a very long way towards the buildout of a new space.
I am confused, and torn up emotionally about the right thing to do.
I am very tempted to just shutter it at the end of the lease, essentially saying fuck you to both landlord and potential buyer (getting a new liquor license at this location would be next to impossible). Dealing with the repair claims (which I don't think would have come up had the lease not been up iin the air), the negotiatons, the potential closing of the business, etc, has been very stressful to both me and my manager, which I think is the intended effect. Like I said, the landlord has used this tactic at least once before towards another bar owner in one of their buildings. Another option is to double the amount of the original price I threw at the potential buyer for the license, in which case I would feel okay about selling it, but it goes against what I believe is right (don't reward the bad guys) and he probably wouldn't go for it anyway.
To further complicate matters, I am in the middle of nursing along a completely separate fledgling business that requires the bulk of my time for now. That load should lighten up soon.
I have never made a lot of money from this particular business, but it is one of my favorites for other reasons. I have income from my other businesses, so that really doesn't play much of a role in my considerations.
I'm probably leaving out some pertinent facts and rambling a bit, but will fill in any details if asked.
So the big question, what would you do?