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Menlo Park: Cafe Zoe faces uncertain future

Landlord puts building up for sale

The Willows neighborhood may need to fight for Cafe Zoe, a popular community hangout, as the landlord of Menalto Corners has put the building up for sale.

The 4,400-square-foot retail center at 1923-1929 Menalto Ave. is listed at $1.45 million, according to LoopNet. Its four tenants include Cafe Zoe, owned by Kathleen Daly, who was recently honored by the city as a "superhero" for her volunteer work as well as business acumen.

Unfortunately, the sale of Menalto Corners could leave the cafe's future on shaky ground. Ms. Daly told the Almanac that she, like two other tenants -- Twig and Petals and Captivating Dance by Nona -- currently has no lease. The fourth tenant, Habibi's Salon, currently holds a lease.

The building's owner, Anatole Zelkin, said he considered the sale a private matter. "Who cares?" he replied when asked why he decided to list the property and what would happen to the tenants. "Why do you want to know my business? They probably will need to move. I don't care about Cafe Zoe."

He declined to comment further.

Ms. Daly said she learned about the potential sale in early January.

"I was trying to negotiate a new lease with my landlord as I felt the rent increase was too high to absorb so quickly," Ms. Daly said. "He warned me I had two weeks. I responded but too late -- he had already selected a broker and the building would be more valuable without leases."

Mr. Zelkin raised the monthly rent by $200 a month, plus 25 percent of taxes, water and sewer, she said. Her counter-offer -- to pay the $200 plus water and sewer, and in two years, add a percentage of any sales increase -- went without a response.

"The hard part of all this is that we have had a great relationship for five-and-a-half years. I know and he has said that we have all worked hard to make Menalto Corners a place the Willows would be proud of," Ms. Daly said. "He allowed all of us to pay 'under market rents' but that has more to do with the fact that it was not a thriving destination to begin with. It has and continues to take a lot of effort."

So Ms. Daly is now seeking "small business friendly" investors who understand the challenges of operating at that location to help purchase the site. She'd welcome a call from anyone intrigued by the opportunity; a few people, including a Willows neighbor, have already shown some interest.

There's some fear that as word spreads, the likelihood of a sale rises, according to Ms. Daly, but she said she remains optimistic despite knowing that her landlord is already receiving offers.

"Without sounding stupid I have to admit I have never negotiated or, for that matter, considered owning commercial property, so I am learning the hard way," she said.

Ms. Daly told the Almanac that she'd also discovered she may qualify for a small business loan, and was pursuing that option with a bank.

The owner of Twig and Petals, a floral boutique located at Menalto Corners for about three years, said everybody was talking about the sale, but until a new landlord comes onboard, it's hard to predict the impact.

"Will they want to raise the rent, will they kick us out? We just don't know what they will want to do. We're hoping we get a nice buyer who cares about our little businesses and wants to see us do well," Bella Hicks said. "We're staying positive."

Comments

Posted by whatever, a resident of Menlo Park: Central Menlo Park
on Feb 11, 2014 at 9:24 am

"Who cares?" the landlord replied when asked why he decided to list the property and what would happen to the tenants. "Why do you want to know my business? They probably will need to move. I don't care about Cafe Zoe."

Well, he is right, it's his business. But it is so refreshing to hear directly from compassionate local landlords. Next time Mr. Zelkin a short "no comment" to the press would be advisable.


Posted by Hmmm, a resident of another community
on Feb 11, 2014 at 11:22 am

So is the sale price higher than it might have been due to the success of Menalto Corners that these local businesses have created?

[Part removed. Avoid insults, please.]


Posted by Rev. Amy Zucker Morgenstern, a resident of another community
on Feb 11, 2014 at 11:25 am

I'm a minister of the Unitarian Universalist Church of Palo Alto and just began holding "community office hours," a drop-in hour once a week at a rotation of local cafes. On the recommendation of a member of the church, I made Cafe Zoe my fourth-Friday location, and from 3-4 on a recent Friday, four of us ate and drank and enjoyed the ambiance there. I'll be really sorry if it goes, and I wish the landlord would include community value in his calculations. Cafe Zoe clearly does.

Of course I understand that he does need to earn some money--is he currently losing money on the building?


Posted by Cafe Zoe Fan, a resident of Menlo Park: The Willows
on Feb 11, 2014 at 12:24 pm

Hmmmm, you are so right. It has been Cafe Zoe that has made the Menalto retail strip so popular. Cafe Zoe is the anchor tenant and because of it, the value of the building has doubled. Because of the success of the Menalto Cleaners, La Hacienda grocery store and the other new businesses, our neighborhood has done away with the blight that we once knew as the Menalto strip mall.

$1.4M is probably too high for a building constructed right after WWI and for which the current owner paid $685K in 2000. If upgrades have been made, no doubt it has been the tenants who paid for them.

Sad story but, one we know.


Posted by Conscience, a resident of Menlo Park: The Willows
on Feb 11, 2014 at 2:28 pm

Mr zelnick's comments are pretty pathetic considering that three years ago he couldnt unload the menalto property for less than the price he is currently asking. Cafe zoe has been a "destination" in the willows and greatly enhanced his property value and he hasnt kicked in a penny. Shame on him!

If there is a new owner, let's hope they have greater wisdom than zelnick has demonstrated. And recognize the value of our small businesses and Cafe Zoe in particular.


Posted by boxer, a resident of Willow Oaks Elementary
on Feb 11, 2014 at 8:07 pm

boxer is a registered user.

I am the owner of this property witch i own since 2000,and I like to keep this as long as my health will aloud.Cafe at this location bean my project from the very beginning i bean denied use permit for cafe as a nuance to the neiborhood,only after the appeal to city consul i received the permit to allow the cafe to be built in this place.Over five years ago the cafe bean sold to Kathleen Daly.I support her great work any way a can, improvements, pick up her utility bills,help with any work she needed,so you can understand my surprise when Kathleen told me she is putting the cafe for sale.At the end of October i meet her broker TOOD MOORE and agree to long term lease to make her sale to her favor. To loose a tenant like Kathleen been real blow to me.So at the begging of the year i put the property for sale and hope to enjoy my retirement.I do not have any intention to evict anybody of my wonderful tenants.To stay on month to month leases it was they wish. IT IS VERY SAD TO HERE SUCH COMMENTS AFTER PUTTING SUCH HARD WORK, TIME, MONEY FOR ALMOST FIFTEEN YEARS TO MAKE MENALTO CORNERS WHAT IT IS TODAY.


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