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caption: Restaurant owner Thuy Tran said she's closing because she lost her rental space in the U District.
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Restaurant owner Thuy Tran said she's closing because she lost her rental space in the U District.
Credit: KUOW/Amy Radil

What the pho? Restaurant closes as landlords on the Ave eye richer tenants

Thuy Tran has served Vietnamese pho in Seattle’s University District for the past 15 years. But after this week, she says she’ll have to close up.

Business owners say that closure highlights their tenuous existence in a changing city.

Tran said she’s had sleepless nights since she was unable to renew her lease for her Vietnamese restaurant, Pho Tran. She’s been on a month-to-month lease for years; she and her landlord were not able to agree on terms for a longer-term lease.

“I am so tired. Really tired,” she said.

For 15 years, she’s been serving Vietnamese noodle soups with cream puffs for dessert. But Tran received notice that she needs to vacate the space by February 3.

When other small business owners heard that Tran was losing her space on University Way, they came to see if they could help.

Rick McLaughlin owns Big Time Brewery and heads the U-District Small Business Association. He said it’s been harder for businesses to get long-term leases in the neighborhood with all the redevelopment going on.

“We have property owners that don’t want to sign long-term leases," McLaughlin said, "because they think the light rail station is going to change the commercial business district and they’ll be able to squeeze more money out of their tenants.”

Tran said she’s spent $170,000 over the years to improve the space. The new tenant had initially offered her $20,000 to pay her for the furniture and equipment, but that deal is no longer on the table, and now she will walk away with nothing.

Tran’s landlord, Barbara Chase, said in a phone interview she needed to raise the rent in order to make repairs on the historic building — which was built in 1902 — and to pay “skyrocketing” water and sewer costs.

Chase said she has no plans to sell or tear down the building. But she recently signed a lease with a new Vietnamese restaurant where the owner is prepared to spend $60,000 in “tenant improvements.”

Jennifer Tam, the food business advocate with Seattle’s Office Economic Development, said small businesses are struggling to find space.

“It seems like it’s been a lot tougher for people to find commercial spaces that are affordable and available," Tam said.

Tam said the lack of a long-term lease creates vulnerability for businesses like Tran’s. And there’s little tenants can do about it.

“There’s not a lot of recourse because it’s really up to the landlord and what they would like to do," Tam said. "It really depends on the relationship the business owner and the landlord have with each other.”

In a 2017 survey of 122 businesses in the University District, 15 percent said they are on a month-to-month lease.

Tam said the city is trying to help small businesses during the negotiation process. The city recently offered workshops for business owners in the International District with talks from commercial brokers, architects and attorneys. Her office also wrote up and translated materials to help tenants understand lease terms in plain language.

“We have a really comprehensive commercial lease tool that goes over the major lease terms and provisions you would see in a commercial lease,” she said. It includes tips on what to look for or avoid.

The materials are translated into Chinese, Spanish, Vietnamese and Amharic. Tam said she can provide them via e-mail, and the office will post them to their website in the coming weeks.

Tam said a city partnership with the nonprofit Wayfind allows small businesses and nonprofits to receive free legal consultations.

“Generally, these are appointments that last roughly an hour,” she said. “Businesses who are interested can contact our office to see if they qualify for these services.”

Big Time Brewery owner McLaughlin said he hopes the city will be able to do something for minority and women-owned businesses like Pho Tran.

“We need to try to have resources for small business owners like her at the ready, to aid and to help her,” he said.

Nearly two-thirds of the small businesses responding to the University District survey fit that designation.

In an e-mail, Tran said, “I haven't found a new good location yet. I am stressing out.”

Lisa Herbold, Seattle City council member, is a member of the city’s Small Business Advisory Council. She said she’s glad the city is establishing a “citywide business advocacy team” to address small business concerns across various departments.

Herbold said she plans to seek amendments to the Mandatory Housing Affordability legislation to allow for smaller storefronts on University Way to keep rents down in the University District. And she’s working to create a “legacy business” designation to channel resources to Seattle’s distinctive older businesses.

Editor's note 2/1/2019: This story has been updated to note that Pho Tran's replacement tenant is no longer offering her $20,000 for equipment.