Issue:  Vol. 48 / No. 7 / 15 February 2018

Natali draws ire of
Castro merchants


A sign on the vacant Patio Cafe space says Hamburger Mary's is "coming soon." Photo: Matthew S. Bajko
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With the number of vacant storefronts he owns set to increase, Castro landlord and bar owner Les Natali has drawn the ire of nearby business owners for what they contend is a "huge and rapidly-growing blight" on the gayborhood.

The board of the Castro Merchants, the business association for the gay district, sent Natali a letter last week due to its "grave concerns regarding recent and continuing issues with properties" he controls in the Castro.

In response to the Bay Area Reporter 's request for comment for this story, Natali forwarded several letters from his legal counsel. In a letter responding to the Castro Merchants, Natali's attorney Steve Goldstein wrote that Natali "wholly embraces" the association's "credo to make the neighborhood alive and thriving."

As for the vacant storefronts, Goldstein wrote, "Look for positive contributions to neighborhood business he will be making in the near future."

The September 21 letter from the merchants group was prompted by the recent news that Natali had refused to offer a multi-year lease to Zapata Mexican Restaurant, leading the business to announce its last day of operation at 4150 18th Street would be October 16. It opened in the corner storefront in 1993.

"Zapata needs and (we believe) deserves a renewal lease with reasonable time and other terms to justify its continued investment in capital assets and to assure reasonable security for its owners and many longtime loyal employees," wrote Castro Merchants President Daniel Bergerac, at the unanimous direction of the group's 15-member board, in the letter to Natali.

He also implored Natali to work "in an expedient manner to secure a mutually-beneficial long-term lease for this successful and much loved local business, so it can continue to thrive and serve as part of the Castro's interconnected business support network."

Bergerac added that the merchant group is "equally concerned about the years and years of extended vacancy" at three other storefronts owned by Natali: 531 and 541 Castro Street and 4144 18th Street. The vacant Patio Cafe space, at 531 Castro, has been closed since 2002.

In February 2014 Natali, who owns both the Badlands and Toad Hall gay bars on 18th Street, announced he intended to open a Hamburger Mary's franchise in the closed eatery space. He secured city approval to open the business, which is considered formula retail due to its having more than a dozen locations in the U.S., yet the space remains dark.

This past February Natali took out ads in the B.A.R. saying he was hiring chefs and a kitchen manager for an "anticipated opening April-May 2015." Signs on the windows today merely say a Hamburger Mary's is "coming soon" and that the hiring process is still underway.

The storefront at 541 Castro Street is vacant again now that the real estate firm that had been using it while its nearby offices were remodeled moved out. Natali had advertised the 4144 18th Street space as ideal for a hot dog stand but it remains vacant.

"If Les has a plan, he is not sharing it with anybody," Bergerac told the B.A.R. in an exclusive interview this week. "To have four vacant buildings sucks the vibrancy out of the neighborhood. We are all reliant on each other."


'Negative image'

Bergerac said that merchants are also concerned about the calls by some for boycotts of Natali's bars in response to the pending closure of Zapata, which was first reported by Hoodline in early September. Such a result, Bergerac told the B.A.R., would be "counterproductive" for the Castro's reputation.

As he wrote in his letter to Natali, there is already "a growing negative image of the Castro as a dying neighborhood with too many empty storefronts and lacking vibrancy."

According to Natali's attorney, an agreement with Hamburger Mary's, which was purchased in 2007 by Dale Warner of West Hollywood and brothers Ashley and Brandon Wright of Chicago, has been finalized.

The company's co-owners were recently in town interviewing prospective staff, wrote Goldstein, and plan to "return soon to continue the interviews and the process of opening the restaurant." Natali expected to meet with a potential owner-operator for the restaurant Wednesday.

The adjacent storefront will be available for lease as of October 1, and Natali expects it "will rent quickly," wrote Goldstein. As for the small space on 18th Street, he wrote that Natali is negotiating with a pop-up tenant who should open "within the next 30 days."

In terms of Zapata's lease, Goldstein emphasized that Natali "has no legal obligation to extend" it but is willing to offer an extension through October 31, 2016. He noted that Zapata has known for some time that Natali did not intend to renew its lease beyond December of this year.

Tuesday afternoon Goldstein sent a new offer to Zapata owner Jorge Perez, informing him if he remained in the space for another year then Natali would refund him his last three months rent, a total of $27,900, as well as the remainder of his security deposit "not used for material harm to the property."

"Mr. Natali is sympathetic to the challenge of finding a new location," wrote Goldstein.

John J.R. Richards, Zapata's attorney, informed the B.A.R. Wednesday morning that he and his client "just received this offer and it is under consideration," adding that they have five days to respond.

Perez, who in August had asked for at least a 10-month lease extension, informed Natali last week that without a five-year lease renewal, with a five-year option to renew, he saw no option but to close the doors of the restaurant his father and uncle launched 22 years ago.

He told the B.A.R. Tuesday that since 2008, after Natali bought the building, it had been evident that he wanted the restaurant to vacate its space. Since that time they have repeatedly been at odds over the restaurant's lease.

"His intention was always to get rid of us, but we weren't going away," said Perez, who suspects Natali's intention is to expand the adjacent Toad Hall bar into the corner storefront.

The reaction from his customers and fellow business owners at the news of the eatery's pending closure has been "very humbling and overwhelming," said Perez, who is straight and uncertain of what he will do next.

He has been unable to locate a new space to reopen Zapata in the Castro, and longtime employees have already quit for other jobs.

"At this point, it is looking kind of difficult just because San Francisco is experiencing high rents in living and commercial spaces," said Perez, who took over the business from his uncle in 2005.

While Perez "would love to reopen in San Francisco," he said that, "looking at the numbers and feasibility, it doesn't look very promising."


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