Plans to revitalize UC Berkeley’s Lower Sproul Plaza may have dire consequences for small, family-owned businesses on campus.
Faced with the worst financial crisis since it almost went bankrupt in 1998, the Associated Students of the University of California Auxiliary, the administrative wing of the campus’ student government, is scrambling to find ways to stay afloat—even going as far as to restructure its $3 million annual budget and lay off staff.
The Store Operations Board of the auxiliary, which manages ASUC’s commercial activities, has plans to improve Lower Sproul Plaza, the site of the Student Union, to attract more foot traffic and bolster declining revenue.
However, not everyone is cooperating.
A small but growing group of students and community members have voiced concern about the board’s recent decision to raise rents for the three independent food vendors at the Student Union’s Bear’s Lair Food Court, a move the opponents say will threaten the owners’ livelihood and result in fast-food chains taking over their spots.
Other terms and conditions for the vendors’ new lease agreement with the auxiliary mandate that vendors will need to generate $400,000 in annual sales by the end of their second year. If not, their contracts can be terminated. The vendors will also have to share a percentage of their profits with the landlord and invest in equipment upgrades and storefront improvements.
For at least one food vendor, this pretty much means the end.
Ann Vu has run Healthy Heavenly Foods, a Vietnamese concession, out of a 400-square-foot stall at the food court for the last 19 years. She doesn’t think she could pay the increased monthly rent of $4,452—more than double what she has been paying so far—let alone meet the other requirements.
“I don’t think I can make it,” said Vu, while preparing breakfast for some 20 hungry UC Berkeley students and staff members on a recent Monday morning. “It’s too much. It’s too heavy. It will kill me.”
ASUC Auxiliary Director Dr. Nadesan Permaul told the Daily Planet that the board voted on the terms and conditions of the lease agreement after considering a request from the vendors for a long-term lease.
“The rental and revenue-sharing component was part of the deliberation by the board in response to their request,” said Permaul, who is also a professor of political science at the university.
Nish Rajan, chair of the Store Operations Board, which is made up of students and UC faculty and staff, said the consultants working on the $100 million Lower Sproul Redevelopment Project had informed the auxiliary about the untapped potential for growth and expansion in Lower Sproul.
“There is a general agreement that it can be used much better, but it requires a lot of investment on our part,” said Rajan, a graduate student at the university’s Haas School of Business. “This is in keeping with Lower Sproul’s long-term redevelopment, although indirectly, because the vision of the project is still being developed.”
Rajan said, while grappling with questions about the real estate value of the Bear’s Lair Food Court, the board had decided to issue a request for proposals to get a better understanding of market rental rates and to investigate if there were better options available for the space.
The food vendors were operating on expired leases, he said, and the board thought this would be a good opportunity to “either give them a lease extension or a fair way to move forward.”
“The status quo was not working,” Rajan said. “We didn’t know what the right fit was for the students. But our goal was not to exclude the vendors from the bidding process.”
Protests from the vendors about the high costs of bidding for the space brought the idea to a halt, and the board instead voted to approve a new lease agreement, one that they hoped would address the auxiliary’s shrinking revenue, Rajan said.
Feeling threatened by the high rent, the vendors crafted a counterproposal that would have increased rents by 25 percent each year, but it was rejected by the board.
On July 9, the board voted to give the vendors a week to accept or reject the terms of the new offer. A rejection would open up the bidding process to other businesses and give the vendors until Dec. 15 to move out.
Vu has no pension and very little savings. Her business generates about $300,000 in sales every year from $1 tofu cakes and $5 teriyaki chicken rice bowls.
She said that she has little choice but to accept defeat.
“I told Mr. Permaul right away, I cannot match what you ask for because right now times are very difficult for the business,” she said. “Students don’t have the money, and staff don’t have the money. I don’t have the money to pay the rent.”
An immigrant from the Vung Tau province of South Vietnam, Vu came to the United States in 1988 with her mother when she was 27. Three years later, she took over Southern Select Gourmet in the Bear’s Lair from Charlie Moore, paying $500 for the tiny space, while her husband managed a food truck. Her limited knowledge of English makes contract negotiations even more difficult.
Today, at 51, Vu can’t imagine life without Healthy Heavenly Foods, her customers or the UC Berkeley campus.
“I like it in here, because I love the students,” she said, ladling out pho to a regular customer. “They are young, they are friendly and they’re not picky. I like to cook my country’s food—healthy food. This is my second home. I know a lot of people here. They love me, and I love them, too. They have supported me, but I don’t think I can stay here anymore.”
Arnoldo Marquez, a Mexican immigrant who runs Taqueria Tacontento, said the auxiliary’s demands were “too much too soon.”
“They told us, ‘Take it or leave it,’ ” said Marquez. He said he would try his best to scrape up enough money for the new rent, but he isn’t too sure he can meet the board’s sales targets.
“It feels threatening,” Marquez said. He generates about $320,000 in sales annually and would need time to boost his profits. “I want to work with UC. I am optimistic when they say they will help with marketing. But I need time. I have put all my effort and my money into this place, I have to do something to make it survive.”
The Coffee Spot pays the highest rent of all three food stalls but also occupies a slightly larger floor area.
“The idea was to bring the per square foot rent for all three vendors to the same level,” Rajan said, adding that the increase had taken into account inflation and increased costs.
Revenue sharing, Rajan said, would help the vendors build a relationship with the board.
“It will boost the revenue of the ASUC itself, but not nefariously,” he said. “You want to have businesses who are successful along with businesses that can grow.”
A study of food court businesses in comparable college campuses across the country showed that most brought in more money than those at the Bear’s Lair.
ASUC’s revenue has been pretty flat for the last 10 years, Rajan admitted, although the demand for services has skyrocketed.
In fact, things have been so bad in the last couple of years that the auxiliary has not been able to come up with the $200,000 it usually hands over annually to various student groups on campus.
Vu said that the board’s demand that the food stalls stay open until midnight was the last straw.
“I already work 12 to 13 hours a day,” said Vu. She opens her store at 6 a.m. and closes at 6 p.m.
Rajan said the board had mandated the midnight closing time due to popular demand.
“All the surveys we did had students asking for places which stayed open until midnight or later,” he said.
Vu said the auxiliary had tried to raise the rent on her shop before but had backed down when students had protested.
In spring, a group of students, including ASUC senators, had fought to keep the fast food chain Panda Express out of Lower Sproul, proposing a student food co-operative in its place. ASUC Senator Christina Oatfield said the students soon realized they had a lot in common with the food vendors, because they were all fighting to preserve the same space.
At an April 14 Store Operations Board meeting, UC Berkeley student Matt Marks urged boardmembers to come to a resolution with the vendors so that the campus could have “family-owned, immigrant-owned businesses, where people could speak students’ native languages.”
The vendors, Marks said, do their best to provide the students with whatever they need, often working more than 12 hours a day to keep costs down for their customers.
Some community members said they were appalled at the way the ASUC Auxiliary was doing business.
“Raising the rent is to be expected, but a 100 percent increase in these tough economic times is cruel,” said Nhu Miller, a UC Berkeley alumna who heard the news when she stopped by Vu’s stall last month. “After working for nearly 20 years, Ann has nowhere to turn if the ASUC turns her out at a time when the entire economy is suffering. Without her livelihood, she has no money. She is just staying alive. What is the point of driving out small businesses which contribute to the health, well-being and character of a great university?”
Point Richmond attorney Joshua G. Genser, who is helping Vu on the issue, said the auxiliary’s demands of the vendors was basically a blatant invitation for them to leave.
“It was certainly reasonable for ASUC to increase the rent, but it’s a question of degree,” Genser said. “It’s not like the rents were raised just a little bit. The only ones who can afford it would be chains like Quiznos or Subway. If ASUC is hurting, they only have themselves to blame. It hasn’t kept rents up in the past and now it’s playing catch-up.”
The Store Operations Board is scheduled to take up the lease agreement issue with the food vendors from 5-8 p.m. Thursday, July 16, at Stephens Lounge, MLK Student Union, UC Berkeley...