The Java Jazz drive-through espresso business in the Magnolia Village 76 station is closing at the end of February after three years of steady growth. It has not, however, been a pleasant parting of the ways between the owners of the espresso business and the new owners of the gas station.
In fact, a dispute about a new lease for the place has produced hard feelings all the way round. Charges and counter-charges have been leveled, an attempt was made to bar the espresso-business owners from the space, police were called in at one point, hours have been cut way back and all that customers can get these days is drip coffee, say those involved.
Sue Reynolds and Cherie Mueller, owners of the coffee business, feel the new gas station owners are unfairly trying to take over a business the two women have built up almost from scratch. "We have quadrupled the business from what it was when we took over," Mueller said.
As far as the gas station owners are concerned, the change is simply a matter of doing business. "It had nothing to do with them personally," said Karlou Dalir, a part owner of the station who works there most days.
When Reynolds and Mueller took over the coffee business almost three years ago, they signed a three-year lease that included an initial rent of $400 per month, plus $75 a month for utilities for the 100-square-foot space. The rent jumped to $500 a month at the beginning of 2003, and there was also a 10-percent-a-year bump in the utility bills beginning in March the same year, according to a copy of the lease.
When the new owners of the gas station and mini-mart took over last year, they also assumed the lease on the coffee business, Reynolds said. "Shortly thereafter, we asked Karlou if the lease would be renewed," she said. According to the two women, that was not going to be a problem, although a "modest increase" in rent would be included, they said.
That's not what happened, though. On Jan. 8, the two women were told the lease wasn't going to be renewed. On Jan. 12, the two said they were told they could stay if they agreed to pay $2,400 a month in rent.
But on Jan. 15, the two women met with Dalir, his partner Morteza Mirzai-Tehrani and Ken, a man who described himself as an agent for the gas station owners and wouldn't give his last name.
The stakes had gone up. According to an offer faxed to the women's accountant two days earlier, the new offer was $2,500 a month with a 5 percent increase per year, plus utilities for a two-year lease. Alternatively, the women were also offered an option that would have seen them pay an up-front fee of $50,000 and pay utilities and $1,700 a month in rent with a 5-percent increase in rent a year during the course of a three-year lease.
That was based on a profit-and-loss analysis prepared by Ken, whose last name is Khorami, according to a Jan. 31 notice terminating the Java Jazz lease. He claimed in the offer that the spreadsheet was prepared with the help of two other espresso-stand owners, one of which is Big Foot Java.
That was news to Al Jiwani, the owner of Big Foot Java. "We've never had anything to do with them," he said of the gas station owners.
In any case, Reynolds and Mueller described the proposed rent increases as outrageous and denied they were making the kind of money Khorami thought they were. "We were like, 'you've got to be kidding,'" Mueller said.
Leases are not renewed for businesses all the time. Asked why he didn't just do that, Dalir said, "I could have done that. But I wanted to give them as much of an option as I could."
The offers were unacceptable, Reynolds and Mueller said, so they suggested at the Jan. 15 meeting that they close the business at the end of January, pay rent through the end of the lease on Feb. 28, and leaflet and redirect their customers to their two other espresso businesses. One is on 15th Avenue West, south of the Ballard Bridge, and the other is on 15th Avenue Northwest in Ballard.
Khorami balked at that proposal. He said he'd already checked with the company's lawyer and said if the women did what they said, he would seize the space, contact Big Foot Java and have belly dancers and girls in swimsuits serving espresso the next day, Reynolds said.
That didn't happen, but Reynolds and Mueller did get a notice from the gas station owners' attorney on Jan. 31 informing them the lease was being terminated immediately because they had removed most of their equipment. They broke a section of the lease that calls for a default if "Tenant abandons, deserts or vacates any substantial portion of the premises."
They have continued to serve drip coffee, but Reynolds was barred from the space by Dalir when she came to work on Feb. 1, she said. He also tried to hand back their January rent check, Reynolds added. "I called the police."
Police showed up, looked at the lease and told Dalir he couldn't bar the two women from the space, Reynolds said. She also said a $75 sign she'd put up in the space informing customers the business was closing had disappeared when she paid rent. "He took $75 out of the till and paid me on the spot," Reynolds added.
The sign and identical fliers handed out to customers say the lease is not being renewed and that the 76 station was going to start its own espresso business in the space. "If you disagree with management's decision, please share your thoughts with Union 76 management at this store," the sign adds.
The lease-termination letter described the sign as libelous, and it described comments made by Reynolds and Mueller as slanderous and defamatory.
Mueller said the espresso business had been open from 5:30 a.m. to 6 p.m. Monday through Friday, from 7 a.m. to 5 p.m. on Saturday and from 2 to 7 p.m. on Sunday.
Now the place is open from 7:30 to 10:30 a.m. Monday through Friday "in order to just inform people that Java Jazz will no longer be there," she said. Reynolds said customer response to the news has been heart-warming, although she and Mueller concede they are losing a lot of money with the change.
Dalir said he was surprised at the way things have turned out. "Honestly, at first I didn't think she (Reynolds) would take it on a personal basis and hurt my business," he said.
Reynolds denies trying to harm Dalir's business. "All I'm doing is sending my customers away, which I have a right to do," she said. In the meantime, she and Mueller are looking for a new location in Magnolia, Reynolds said.
Dalir said he wasn't sure if he and his partners would open a new espresso business in the gas station. "That's something we have to discuss with our partners," he added.
But Dalir is clearly feeling the heat. "I'm aware Magnolia is a tight community and everybody is out looking out for each other," he said. "I thought I would be part of the community."[[In-content Ad]]
