The landlord of the Castro Theatre building allegedly cut a back-room deal with its operator to evict the businesses next door to make room for a moviehouse renovation and expansion.
Landlord Chris Nasser inked a lease with Another Planet Entertainment for the landmark theater at 429 Castro Street that included booting a longtime coffee shop and nail salon after their leases expire next month, the San Francisco Chronicle reported.
Riyad and Ken Khoury, brothers who for decades have run Castro Coffee and Castro Nail Salon on either side of the theater, said Nasser told them three years ago that Another Planet’s renovation wouldn’t affect their lease renewals.
“He told us … ‘Don’t worry about it,’” Ken Khoury told the newspaper. The brothers shared emails with the Chronicle that appear to substantiate their claims.
The Khourys said they were shocked to learn in January that the entire building had been leased to Another Planet, which claims it needs the storefronts to expand its box office.
The Berkeley-based concert promoter and production firm is restoring the century-old theater as a nightlife draw for the city’s Castro neighborhood, a global symbol of gay liberation and pride now challenged by shuttered storefronts, open drug use and homelessness.
“There’s over 20 percent [retail] vacancy in the Castro, depending on who you talk to,” Gregg Perloff, CEO of Another Planet Entertainment, told the Chronicle. “We’ll be bringing in over 200,000 people a year, and that is extremely important to the restaurants, the bars, the coffee shops.”
What city officials and neighboring businesses didn’t bank on was a multimillion-dollar renovation billed as a way to boost businesses helping to push them out. They also didn’t foresee local landlords of empty storefronts holding off on renting them out to the Khourys.
One local bartender lambasted “speculative real estate turning a whole generation of landlords into gamblers willing to hold out for that big payoff.”
Supervisor Rafael Mandelman, who represents the Castro and has supported the project, said Another Planet is making a “very bad call” by displacing the brothers’ businesses.
“This is Another Planet’s project, and none of this was disclosed to the broader community,” Mandelman told the Chronicle. He said there’s a “real challenge around property owners who don’t actually seem to have any interest in renting out their properties.”
Perloff, of Another Planet, called the Khourys’ situation “a landlord-tenant issue.” The theater needs the flanking storefronts for a “proper” box office, and that they were included in his lease with Nasser, he told the newspaper.
Tim Flint, owner of a six-decades-old antique shop across the street, is skeptical that Another Planet can help breathe life back into the Castro neighborhood.
“When Another Planet first came, they said they wanted the support for changing the interior of the theater … and they got that,” Flint told the Chronicle. “Now they want the coffee shop and nail salon. Well those are established businesses, just like my business.
“If you allow that, you’re destroying neighborhoods.”
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