Another family-owned East Lansing business will soon close its doors because of rising costs.
After four years of trying to sell the Blue Note Coffee Café, owners say they are being forced out of their location at 623 E. Grand River Ave., where the business has stood since opening in 1997.
“During the past six months we’ve found several potential buyers,” said Judy Wang, who owns the cafe with her parents, who want to retire for health reasons. “But our landlord refused to rent the space to (the potential buyers), and recently sent us a letter stating that we have 60 days to match a rental offer he received from a franchise or vacate.”
Wang said the letter was a slap in the face. “He never told us anything,” she said. “He quoted a clause in our lease that we didn’t know existed.”
The clause says if the Wang’s landlord receives a higher bid for the rented space, her family would have to match the offer or vacate the building.
Construction management Professor Douglas Cron, who owns the property, said the Wangs are “understandably upset,” but the situation is simply business. He will rent the space to the franchise for $5.33 more per square foot.
Cron would not name the franchise.
Wang’s father, who once owned Peking Express, 603 E. Grand River Ave., has been renting from Cron Management for more than 15 years. “We were always on time with our rent and never once have we had problems with our landlord,” she said.
Wang said the problem started when her family discovered the previously unknown clause in the contract. She said it was her family’s major downfall for not thoroughly reading the contract before signing it. Wang said her father cannot read or speak English and used his sister to interpret.
“He just trusted that the contract was the same as the previous ones,” Wang said.
Cron said the clause was added to the contract because he wasn’t in a position to negotiate at the time of the lease renewal.
“The Wangs are paying considerably less than market value for that space,” he said. “I want to bring it up to market value.”
While Cron desired to raise the rent, he said he never actively pursued a replacement for the space.
“The offer came out of the blue,” he said. “It seems when something is on market for a while there are no offers, then all of sudden there’s more than enough. They just popped up.”
Cron said after several attempts, the owners of the cafe found a buyer, but at the same time he received the offer from the franchise who was willing to pay more to rent the space.
The Wangs pay $9.67 per square foot ($14,985.60 per year) plus fees and taxes for the 1549.7 square-foot space. They said Cron was willing to rent to their buyer for $12 per square foot ($18,596.40 per year), but later changed his mind. The franchise offered to pay $15 per square foot.
If the Wangs decide to match the offer, they would pay about $8,260 more per year in rent.
“We can’t match that price,” Wang said. “We can’t compete with a franchise.”
The cafe is not the only business to suffer the backlash of national franchises moving to the downtown area. In 2001, Bagel Fragel owners closed their business because they said they were not able to compete with the national franchise Bruegger’s Bagels, 505 E. Grand River Ave., which moved six doors down from the shop.
The new face of East Lansing has fewer locally owned shops.
Graham Schuler, manager at Cottage Inn Pizza, said franchisees are attracted to the area because college towns are lucrative markets. “We’re a small chain, but we are growing,” he said.
For zoology senior Natali Gut the Blue Note Coffee Café has been the main place to go for “good coffee and a great place to study.” Gut has patronized the cafe since her freshman year and is sad to hear about the closing.
“I remember the first time that I came here with my sister,” she said. “I was like, ‘Wow this place is so cool.’”
Gut and her friend zoology senior Andrea Hayes were studying in the cafe when they heard the news.
“I think it is sad that the family-owned business is being pushed out,” Hayes said. “There is a lot of quality in local business. It all gets lost in commercialized chains.”
