Tuesday, November 1, 2016

San Loco Struggles

Jill Hing's brothers opened the San Loco taco joint in the East Village in 1986. A year later, Jill followed her brothers, moving to New York City from rural Nebraska. She soon joined the business. San Loco has been a Lower East Side staple ever since. On a personal note, I've been living off their tacos for half my life.

Recently, Jill got in touch to talk about the struggles of running a small business in the city today. "We have been feeling unbelievable pressure caused by the increased cost of doing business for quite a few years now," she wrote. "At this point, we are not sure how much longer we can hang on."

I asked Jill a few questions about San Loco's struggles in a rigged system where small businesses get the shaft--while big national chains get preferential rents from landlords, higher property values from banks, and corporate welfare from City Hall.

Q: What's been the biggest struggle to San Loco's survival these days?

A: There are many factors that contribute to our struggle to survive--and the noose definitely keeps tightening. Our customer base has been mostly squeezed out of this neighborhood as a consequence of hyper-gentrification. Rent is a constant source of stress. In our case, as with many long-standing businesses, we are at the mercy of the landlord and live in fear of our next rent renewal.

They can raise your rent exponentially to just force you out, or they can charge you above market because they know moving is not a viable option. For example, one of our location's lease is up in the spring, we have been tenants there for 20 years, but still they are asking about 15-20% above the comps around us because they know moving is expensive, disruptive, and can cost us our liquor license (although San Loco obtained the liquor license it stays with the address). And regardless of our good standing with the community board, we could be denied a new license, or most likely, be given one with limitations. There are moratoriums on most blocks now because of the over saturation of restaurants/bars in the neighborhood.

It makes me furious that landlords are able to manipulate the market and falsely inflate property values this way. Once we even had a landlord ask for a percentage of our revenue as part of our lease.

The other contributing factor is that the increased cost of doing business has gone through the roof. Some costs: Seamless has cornered the market with on-line ordering and they keep raising their percentage, they take 17-20% now, which is higher than our profit margin. Our blue collar lunch crowd dwindled when the cost of parking more than tripled. Our purveyor costs went up when parking tickets more than doubled. Yelp touts themselves as unbiased, but they aggressively try to force you to “advertise” with them, which includes manipulating reviews (good ones come to the top, bad ones go to the bottom).

Q: How has that changed in recent years?

A: While many of our old-school customers have moved out, the ones that remain are loyal to the death. We love them and are so grateful for their loyalty, but we also want to appeal to the new influx of people in the neighborhood. Because we are inexpensive, we have always been reliant on volume.

I’ve noticed that going out to dinner doesn’t really happen organically anymore, nobody just walks into a place to check it out and try it for themselves, they have to google it first to be told what to expect and if they’re going to like it. The nightlife has definitely changed as well. Our neighborhood has more professionals and students now. People aren’t out roaming the streets and leaving shows at 3 a.m. anymore.

Q: Did it used to be easier to run a small business in the city--and why?

A: Much easier. The regulations and restrictions end up costing so much money that it's almost cost prohibitive to open a business for people like us. Little hole in the wall places could open and survive in years past because the cost of doing business wasn’t so crushing, and getting started wasn’t so daunting. You could just work hard and go for it.

Q: How do you think the increase in chain stores has affected your business?

A: People seem to want to know what to expect, they aren’t looking for a surprise or an adventure, and they don’t want to be part of your weird world, they are looking for sameness. New York has lost so much of its character, it seems that we have sold our soul to the highest bidder (I think largely due to Bloomberg), and it makes me sad to say, but I think NYC has lost the plot.

Go eat some San Loco tacos--and save our small businesses by supporting the mission of #SaveNYC. Take one small action today. We made it easy for you. Just click here.


Scout said...

Ahhhh, good old San Loco. I lived mere blocks away, next to a squat, when it opened. I, too, ate there almost continuously. I well remember the manifesto painted on the wall and signed by brothers Paul and Darrell. It wasn't very long later though, when Darrell's signature was painted out (when asked, regular customers were told that there had been an acrimonious break-up), and soon thereafter, Paul opened his equally famous burger joint next door.

Then, suddenly, San Loco moved across the avenue (that, too was a long time ago). Many of us moved out of the neighborhood, but always revisited when in the area, because somehow their quality never diminished (how many businesses can claim that?).

It's been more than a year since I've been down to the shiny rich-NYU-kid grotesquely artificial East Village, but I still hope that San Loco will always be there. The neighborhood may now be unbearable to those of us who lived there rough and authentically bohemian in the 70s and 80s (not the fake trust fund/sitcom thing that currently passes for it), but I wish the place well.

Brian said...

Good article, Jeremiah. Wish it was not true. As someone who is financially squeezed, I cannot enjoy the city the same. Always rushed, not very adventurous anymore. No time but to work, get my other chores done inbetween and take care of myself.

Unknown said...

Jeez, been heading there since I was a kid around the time they opened. Many late nights and good times. Always loved going to Loco during snow storms when the city would shut down and they'd stay open. I hate hearing this shit. Agree with everything in the article. NYC has been disappearing for a long time now, since the mid aughts. Other than in some niche pockets on the outskirts of the outer Boroughs, I see very little of the city I grew up in. It all seems to have been white washed in a bleak, colorless, corporate blanket of sameness populated by upper class, self entitled transplants. There's little if anything left of the city people move here for in the first place. There's really no way to rebound from the damage that's been done.

Scout said...

Thinking about San Loco led me to do some light research - it appears I have remembered a few things wrong.

The brothers were Darrell and Craig (not Paul); so I suppose Paul's burger place has nothing to do with the Nelsen family.

It seems that 10 years after the brothers split, Craig (the one that left and had his name painted off the wall) got into a bit of a mini-scandal by displaying anti-immigration billboards around the U.S., and then confessing to having hired undocumented laborers at San Loco at less than minimum wage with no benefits. (see http://www.nytimes.com/1999/10/28/nyregion/man-behind-immigration-signs-admits-he-hired-illegal-workers.html)

Craig also appears to have owned a percentage of San Loco until 1999.

Unknown said...

All the things the owner of San Loco Mentions, from the relocation of patrons, to the new cultural preference for sameness, to the coercing by Yelp to pay dues, to the pressures and threats from spoiled landlords means the city is nearing saturation point and about to implode. It seems every entity one must engage with in order to live in this place or run a small business are all behaving like mafia's demanding more payoff or else. There is an unethical cocktail of greed at play here that is desperately trying to cash in on this wave of lunacy before everyone gets wise or goes broke (one or the other). Only after every independently run business is forced out will the inevitable disaster be realized.

To use the Titanic as a metaphor; the ship has already hit the iceberg, but only some alert people have felt it. The vast majority of guests who paid big money for their tickets don't think it can possibly sink. The captain and crew know it's sinking but are not willing to admit fault and cause a panic. The lower and working class passengers have been locked in place against their will while the music continues to play and drinks are poured for the wealthy on the upper decks. It's an injustice for some and a party for the privileged and yet that fateful time is nearing for all.

BootsNY said...

I agree with the Titanic metaphor but somehow they keep adding more luxury decks. You can't walk two blocks without some construction scaffolding meanwhile retail space is sitting vacant...I know capitalism depends on expansion but the fallout from the coming implosion looks nuclear to me.

onemorefoldedsunset said...

The "weird worlds", the differences, the places and people operating by their own rules, tastes, values, are what I crave most. Not the unending march towards mediocre (expensive) sameness.