‘I Think Japantown Is No More’: Japan Center Restaurants Grapple With an Uncertain Future

At a spry 91 years old, Lena Turner has been a fixture in San Francisco’s Japantown district for more than four decades. She opened the Japan Center mall’s very first Japanese restaurant, Sapporo-ya Ramen, in 1976, and she’s run a string of other Japantown dining establishments since then — including Takara, the Japan Center West sushi restaurant she currently owns. Everyone in the neighborhood knows her.

It doesn’t bode well, then, when someone like Turner no longer sees any future for Japantown. “I think Japantown is no more,” she says.

The problem, Turner explains, is her landlord. Or, more specifically, the problem is that she and most other business owners in Japantown have one of two landlords — and so far neither one has given their tenants any break on the rent they owe for the months when their businesses weren’t able to operate at all.

Instead, in late September, Turner and the other Japan Center East and West mall tenants received a letter demanding full and immediate payment of all back rent and unpaid common area maintenance (CAM) fees, including from the time when the mall itself was closed — about three months’ worth, or roughly $60,000, in the case of Takara, according to Turner, who didn’t reopen the restaurant for takeout until mid-June. If that amount isn’t reduced significantly, the restaurant will almost certainly close for good, Turner says.

Takara is far from the only restaurant that could close. According to Diane Matsuda, a staff attorney with Asian Pacific Islander Legal Outreach (APILO), which — along with Allan Low of the Perkins Coie law firm — is representing about 40 Japan Center businesses in their landlord negotiations, the danger is that every restaurant and store in the three buildings that constitute the Japan Center could be forced to close. And that mass exodus would, essentially, be the death of Japantown itself.

“If we lose these tenants in the three malls, we lose almost all of Japantown,” Matsuda says.

APILO

The landlord issue is, of course, one of the intractable problems of the pandemic, as restaurant owners have had wildly different experiences in navigating the shutdown and reopening of their businesses depending on how much rent relief their own individual landlords were willing to offer. But the situation in Japantown is particularly dire.

A KQED report on the COVID-19 crisis’s impact on San Francisco’s historic Asian cultural districts in September zoomed in on the essential challenge facing Japantown, which is that the majority of the neighborhood’s businesses are located in the three Japan Center buildings. As a result, much of Japantown is subject to the decisions of two “mega landlords”: Kinokuniya Inc., which owns the Kinokuniya building, and 3D Investments, the Beverly Hills-based developer that owns the Japan Center East and West buildings. According to Low and Matsuda, both landlords have continued to charge their Japan Center tenants full rent and CAM fees throughout the pandemic — a stance that may come to a head when San Francisco’s eviction moratorium, the ordinance that forbids commercial landlords from evicting tenants due to nonpayment of rent, expires on November 30.

APILO

From a food perspective, the mall is chock-full of restaurants and specialty shops that sell Japanese items that are hard to find elsewhere in San Francisco — in addition to its numerous sushi and ramen shops, the mall is home to some of the city’s only specialized shops for takoyaki, mochi doughnuts, Japanese crepes, and yoshoku (Japanese-style Western) cuisine. Any kind of mass exodus from the Japan Center would almost certainly leave a hole in the local Japanese community’s cultural and culinary landscape.

William Lee, a first-time restaurant owner, has operated Kui Shin Bo, a small Japanese restaurant in the Japan Center West, since 2009, selling a little bit of everything, he says — sushi, teriyaki, ramen. Lee says he’s been paying full rent ever since he reopened on July 1. But like other business owners in the mall, he did not — and could not — pay rent from April through June, when the mall itself was entirely closed.

Nevertheless, in a letter viewed by Eater SF that was sent to Lee on September 29, a lawyer representing Kui Shin Bo’s landlord, 3D Investments, wrote to “demand that all amounts due and owing be paid within five (5) days following your receipt of the letter” — in Kui Shin Bo’s case, a total of nearly $20,000. “The Lease is clear and unambiguous regarding Tenant’s obligation to pay rent and other charges,” the letter continues, stating that the landlord may “exercise remedies” that include “termination” and “filing suit for damages” if the full payment isn’t immediately made.

“It’s impossible,” Lee says of the prospect of paying that much money right now, noting that sales at the restaurant are down about by about 70 percent and that he’s being charged full maintenance fees for months when he didn’t use any water or electricity at all.

A representative for 3D Investments LLC declined to comment, noting only, “We are a private company and do not discuss our properties or our tenants with the press.” Clark Hill, the Arizona-based law firm that sent letters to the Japan Center East and West tenants on 3D Investments’ behalf, also did not respond to Eater SF’s request for comment.

APILO

Lee and Turner both say they’re willing to pay some reasonable amount of back rent — perhaps 50 percent of what they owe. “I never owed somebody in my life,” Turner says. “I don’t want to owe [money] to this landowner.”

Matsuda, for her part, believes the landlords are bullying these tenants and taking advantage of the fact that many of them are non-native English speakers who might be too intimidated to fight back. And, at the end of the day, it’s the cultural legacy of Japantown itself that’s at stake. “We have about 50 small businesses in those three malls who give their heart and soul into their business,” Matsuda says. “They also know that this is more than just a business; they know that they represent Japanese culture and history. For someone to not take that into consideration when they purchase a property or when they manage a property is to me just a royal racist crime.”

According to Matsuda, if negotiations with the Japan Center landlords prove unfruitful, there’s still hope for some form of legislative remedy. Specifically, she says that she and Low have been communicating with SF supervisors Aaron Peskin and Dean Preston on legislation that would allow small businesses to further defer their rent payments — and, potentially, to have some avenue toward terminating their lease.

Meanwhile, Turner, the 91-year-old proprietor of Takara, says she’s likely to leave the Japan Center when her restaurant’s lease expires at the end of this coming January even if the current rent dispute gets resolved. She just doesn’t see business picking up enough inside the Japan Center anytime soon.

But even though her son has been pushing her to simply retire, Turner says she still feels very healthy and full of energy. Prior to the pandemic, she’d been in the habit of going for a daily swim. She already has eyes on a new restaurant project if she winds up closing Takara. “I’m very active, so I cannot stay home,” she says.

• What’s Lost in Bay Area Asian Culture When SF Eviction Moratorium Ends? [KQED]
• Japantown Landlord Refuses to Negotiate With Tenants, Eviction Notices Expected to Follow [ESF]
• Ramen Shop Owner Says Rent Abatement Needed to Avoid ‘Mass Extinction Event’ [ESF]