Thanks to COVID, the Rent Is Unpayable. Where Is the Government?

Acting under emergency powers, governments across the country have shuttered restaurants in response to the COVID-19 pandemic. When we reopen, our sales will be a fraction of pre-pandemic levels, and will not be enough to pay rent. Immediate government action on rent relief is needed or there will be a mass failure of restaurant businesses, leaving untold thousands unemployed, depressing sales tax revenue, and leaving gaping holes in the fabric of our communities. California’s proposed law SB939—which, if passed, would give restaurant tenants the option to walk away from an untenable lease—is a step in the right direction.

The restaurant industry wants to do its part, but without help, we are on the brink of mass extinction. In the Bay Area where I live, restaurants have been closed, by government order, for over two months—with at least weeks still to go. When we are finally allowed to reopen, the road to recovery will be long and littered with obstacles: mandatory caps on dining room capacity, the likely prospect of future COVID outbreaks, and a persistent quarantine mindset among consumers. What happens to downtown business lunch traffic when all the white collar workers are still taking Zoom meetings from home? And just how, exactly, are my customers supposed to enjoy the dine-in experience in a mask? 

Independent, family-owned restaurants cannot survive this toxic landscape. These businesses operate on razor-thin margins to begin with. And then the cash flow stopped, overnight, when the shelter-in-place orders issued in March. Cash is now long gone, because anything in the bank in March was used to pay February’s bills as they continued to trickle in. Limited sales from takeout and delivery during the shutdown might generate enough revenue to keep a few employees working, pay the cost of goods and the electric bill, but it comes nowhere close to  paying all the bills.

When we reopen, we can adjust labor and inventory to match demand to a certain degree, but we cannot control our fixed costs. And the biggest fixed cost—by far—is rent. Commercial rents were sky high relative to sales before the pandemic, particularly in the Bay Area and other coastal markets. For restaurants emerging from months of zero revenue into a world of 50% revenue, the pre-pandemic rents will be what put us out of business. Reports of permanent restaurant closures are already mounting, and we have not even reached the end of shelter-in-place. There is a good reason The Cheesecake Factory announced, on March 18, that it would not pay April rent amidst the shutdown. It’s a choice between paying rent and immediate insolvency.

Resolving the rent problem is, without question, the critical predicate to restaurant survival. Here’s an all-too-common scenario I see, both in my own business and in that of my commercial tenant clients at work: in response to a COVID-related plea for rent relief, the landlord offers two or three months of deferred rent, with rent increasing over pre-pandemic levels in June or July, in order to pay the landlord back. In other words, landlords want tenants go into debt, so that landlords can get paid 100 cents on the dollar, thus taking no share in the pandemic’s economic costs. In this scenario, tenants will pay higher rent to operate while, at the same time, the government has shut down half of every dining room.

Landlords are able to take this position, and often get away with it, because the commercial landlord-tenant relationship is inherently asymmetric, particularly with respect to small business tenants with limited bargaining power. For example, many landlords require tenants to sign personal guaranties, obligating the tenant’s owner individually for unpaid rent. Landlords collect five-digit security deposits at the outset of a lease. Tenants typically invest at least hundreds of thousands in creating a restaurant space, which the landlord keeps when the tenant vacates. Perhaps most critically, in most business relationships, when extraordinary circumstances— earthquake, flood, or pandemic—prevent the performance of a contract, the contract can be suspended or terminated. But most commercial leases contain a “force majeure” clause that can require the payment of rent even when disaster prevents the tenant from operating. The landlord bears no downside when sales are poor—even when caused completely by external factors. That means when the world blows up, the landlord won’t have to provide the leased space, but the tenant may still have to pay rent.

This lopsided relationship is problematic in normal times. It is an emergency in the midst of the COVID-19 pandemic. If small businesses cannot get reasonable rent relief in the near future, a substantial number of them will not reopen. The jobs associated with each closed business will be permanently lost, small business owners will be financially devastated, and local governments will lose sales tax revenue desperately needed to provide essential services. Local communities will lose their amazing diversity of restaurants and shops, which will be replaced slowly—and, more likely than not, by large corporate chains. The courts, meanwhile, will be overwhelmed with landlord-tenant civil lawsuits, unlawful detainer actions, and bankruptcies.

Governments at all levels need to get involved, and they need to do it soon. At the federal level, the government should provide relief funding for commercial landlords, so that rent on the ground can be waived—not merely deferred—during the shutdown period. Canada has already announced an Emergency Commercial Rent Assistance (CECRA) program for small businesses which, according to the Canadian government, “will lower rent by 75 per cent for small businesses that have been most affected by COVID-19.” There is every reason to implement a similar program in the United States. Fixing the manifest defects of the PPP program would be a great start, but a full restaurant industry bailout, like the one being proposed by Rep. Earl Blumenaur from Oregon, is ultimately what the industry needs to survive the next 12-24 months.

At the state and municipal level, governments need to ensure that the burden of the COVID-19 shutdown is shared by landlords, and not borne solely by tenants. Those governments should immediately pass emergency legislation imposing vacancy taxes to discourage evictions, requiring landlords to compensate COVID-evicted tenants for the value of tenant-funded leasehold improvements, preventing landlords from enforcing personal guaranties for unpaid rent during the shutdown and ramp-up, voiding rent exclusions from force majeure clauses, and extending eviction protection. California’s pending SB939 is a strong step in toward balancing the incentives and getting landlords to the bargaining table—if it actually passes and becomes law.

This is not to point the finger at all landlords, some of whom are working with tenants in good faith to navigate the crisis, nor is it to suggest that landlords should be saddled with all the costs. The problem is that costs need to be distributed equitably among all stakeholders, and too many landlords are already playing hardball with tenants, in an effort to avoid being saddled with any costs at all. Many will eventually realize on their own that their economic interests necessitate providing real rent relief, but that is not guaranteed. This is an outright emergency, and it can only be resolved by our elected officials, who must step in and level the playing field—before it’s too late.

Hands Off My Money! How to Win Your Small Business Dispute + Bonus Case Study!

I really don’t know how a person can run a small business without also being a lawyer. You do a lot of transactions, of one kind or another, and every transaction runs the risk of somebody trying to fuck you and take your money. That’s not to say that everybody out there is trying to get away with something—most aren’t—but a not insignificant number of transactions end up in some kind of dispute. You have to be able to protect yourself from corporate rapine, among other things.

As a small business, you’re frequently at an inherent disadvantage. Your counterparty is often a bigger entity with more resources and more bargaining power. Maybe to do business with them, you’ve been forced to sign some shitty one-sided contract of adhesion that lasts for years or automatically renews without notice to you. A year into the contract, you realize this company sucks, but good luck breaking up with it. Somebody has just done fucked you and taken your money. Just like that.

The Village Lawyer. Pieter Brueghel the Younger (1621).

Keeping Your Money: Suggested Tactics

So how do you get control of this sordid business and hold on to your money? It obviously helps to be a lawyer, especially a litigator. If you know the law and do commercial disputes for a living, you have valuable resources to throw into the fray. Most people aren’t lawyers, thank goodness, so that’s not going to be a fallback except in rare instances. You can always hire a lawyer to do it for you, and you absolutely should if there’s a lot at stake. But what do you do when $2000 are on the table, or even $5000? Attorney fees probably make hiring a lawyer unrealistic. You’re on your own, just like you were when the landlord in your last apartment complex tried to shake you down for your security deposit over some dubious move-out charges.

You don’t need a lawyer, though, as long as you’re in command of the facts and have your eye on the endgame. What you’ve got to do is make it as expensive as possible for the other side get (or keep) your money. Shady companies have lots of folks they can take advantage of, and where they choose to focus their resources is just a cost-benefit question. Change that calculus for them, and they’ll go take a shit on somebody else. If enough people make it painful enough for them, maybe they’ll start re-thinking the way they’re doing business altogether.

Usually mere resistance, without something more assertive, isn’t going to work. If they don’t already have your money, you have a certain tactical advantage. They’ve got to work to come get it. But if they do have your money, you’re in a weaker position, because the burden is on you to get it back. The key is to identify what, specifically, they did wrong, and leverage it as hard as you can to get what you want. If you can credibly claim they violated some consumer protection law, where you could get punitive damages, that will probably get their attention.

Handsome Caucasian Lawyer. That’s the actual name of this stock photo listed on the Internet.

Let There Be Treble Damages!

Treble damages, punitive damages, statutory damages, attorney fees. Appropriate use of these terms is to your advantage. A threat to involve the State AG’s office or federal regulators may be worth throwing into the mix, especially if it’s a consumer dispute. Whatever you do, put it in writing, and then send certified copies to the company’s general counsel and CEO. Important people don’t want to spend their time dealing with your shitty little $1500 dispute. That, too, is to your advantage, so long as you’re credible and willing to invest in the dispute.

A well-placed review of the company on a third party’s review site can also be effective if done right. In fact, find three or four sites and put your review up everywhere. I’m not talking about a stupid-ass Yelp review, in the manner of some self-satisfied nincompoop rating a ramen shop 1 star because he does’t understand the difference between ramen and pho, and thought he was going to a pho restaurant. “This so-called pho restaurant does not serve pho. The noodles were all thick and chewy and the soup was covered in a layer of fat. Disgusting! DO NOT EVER GO TO THIS RESTAURANT. I know authentic pho and this was NOT authentic. Totally fake!”

My point: your review has to make sense and be compelling. It’s not about being an opinionated buffoon, it’s about being factual, credible, and committed to getting a result. Obviously, this tactic only works if the company in question cares about online reputation. Some do—considerably. Last year, as part of a confidentiality clause in a settlement agreement I entered with a tech service provider, I was required to pull down my reviews of the service. It was really important to them that the reviews come down.

For things to work out, though, you have to be in the right, preferably as a legal matter. At least you need to have equity on your side—some sense that, even if not unlawful, you’re being treated unfairly. I’m not suggesting that you go out and take advantage of somebody, after all. I wouldn’t tell to you act like Donald Trump and screw contractors as routine business practice. I’m suggesting there are ways to level the playing field when somebody bigger is trying to take advantage of you.

Aramark: A Case Study

And now a small case study, involving the linen services company Aramark. Terrible company. The worst. We used Aramark for towels and aprons at our stores until earlier this year. At some point, after using the service for 18 months or so, we noticed the prices had increased dramatically, without notice or explanation. When we tried to find out why, we couldn’t get anyone to call us back. Meanwhile there were all sorts of problems with the deliveries—overcharges, missing items, etc. Aramark wouldn’t address those either. So we terminated the service and switched to a new vendor.

Aramark responded by trying to charge us $5000 for “liquidated damages” because, they said, we had a multi-year contract that we were breaching by terminating. We’d never seen this so-called “contract,” and had no reason to think one existed, let alone that we couldn’t terminate it for cause. Give me a break.

Aramark’s demand and my responsive demand are below. Please note: I do not ordinarily write demand letters quite as gleefully contemptuous, as toweringly disdainful, as this one. I’ve worked hard to purge snark from my legal writing over the past decade, as much as possible, but sometimes it cannot be helped. It also seems my id is liberated, just a bit, when I’m representing myself instead of a client. Spoiler alert: Aramark never contacted us again after this letter.

An Outrageous Demand

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Aramark Demand Letter. We got two of these things, one for each of our stores. They wanted over $5000 in total.

An Appropriate Response

Dear Mr. Hall,

I am in receipt of your letters dated January 26, 2018 regarding the above-referenced account, entitled “Breach of Contract” and using terms like “liquidated damages,” which, as a non-lawyer, you clearly do not understand.  Your threatening use of this term to consumers is misleading and is likely in violation of California consumer protection and unfair competition law.  

I write to confirm that Shiba Ramen Corporation (“SRC”) will be terminating Aramark service as of February 28, 2018, per our prior written notice dated January 21, 2018 (“Notice”).  Should Aramark attempt to enforce its so-called “rights,” as you threaten in your letters, you can rest assured Aramark will find itself on the receiving end of a lawsuit for damages, as well as complaints to the California Attorney General and other applicable consumer protection authorities. 

I am SRC’s General Counsel and a professional civil litigator, and I look forward to providing maximum public exposure to Aramark’s dubious and unlawful business practices.  I also look forward to taking discovery about Aramark’s conduct, including your deposition, where you can tell me, under penalty of perjury, all about your knowledge of “liquidated damages,” and your practices of improperly threatening consumers to continue with unenforceable “contracts.”  Your letters make me wonder whether any class action attorneys are investigating Aramark’s practices.  If you take any adverse action against SRC, we will be sure to find out.  Surely you have sent out countless letters to aggrieved consumers threatening liquidated damages and inducing them to either pay money they do not actually owe, or to continue using Aramark’s deficient services.

With respect to the merits of your claim against SRC, we do not understand that we have any contractual obligation to use Aramark’s service through December 17, 2018.  We have never seen any such contract, and nothing has ever been provided to us by Aramark.  Is it Aramark’s typical practice to fail to provide supposed “contracts” to customers, and then claim “breach of contract” when a customer terminates in consequence of Aramark’s deficient services?  Just making a wild guess here, I’d say the answer is a resounding “yes.”

Even if there is some sort of “contract,” it is undoubtedly terminable for cause.  As explained in our January 21 Notice, a copy of which is attached for your convenience, Aramark’s service has been deficient in numerous material respects.  Indeed, Aramark has invoiced us for services that have not been provided, and thereafter failed to resolve those problems when brought to its attention.  Our position is that Aramark owes us money, not the other way around.  Moreover, Aramark’s monthly invoices increased dramatically, without explanation, during the course of 2017.  When we attempted to contact Aramark customer service about our invoices, we were given no explanation, and the Aramark representatives who promised to follow up with us never actually did. 

Now, getting back to Aramark’s “liquidated damages.”  Please note that liquidated damages clauses like the one you are purporting to enforce—I have not actually seen it, because no “contract” was provided to SRC—are considered unenforceable penalty clauses by California courts.  As the Supreme Court has stated, a liquidated damages clause is unenforceable where, as here, it “bears no reasonable relationship to the range of actual damages that the parties could have anticipated would flow from a breach.”  Ridgley v. Topa Thrift & Loan Ass’n, 17 Cal.4th 970 (1998). 

Your absurd demand for over $5000 in “liquidated damages” is obviously an unenforceable penalty.  Do you seriously think any court would require a consumer to pay this kind of money for services that have not been provided, particularly in connection with a contract of adhesion that has not even been provided to the consumer?  Aramark suffers no damage from our termination because it no longer gives us any products or services.  We have paid for all Aramark services received to date, and that is all the law requires.  We do not have anything of yours in our possession, except for previously-invoiced materials that Aramark will be collecting prior to the February 28 termination date.     

Your unconscionable conduct is just the kind of thing that will trigger attorney fee awards and punitive damages.  And, of course, Aramark will be subject to actual damages for invoiced services that it did not provide, and for any overbilling in connection with SRC’s accounts. 

This is not a fight you want, I assure you.  You will lose and it will cost you.

Jake Freed

President & General Counsel/Shiba Ramen Corp./California State Bar No. 261518

Cc: Aramark Executive Offices & General Counsel

Construction Cluster#%$!

Last December I sat down to write about the state of the Shiba Ramen business, two years in. But as my last post explained, I dialed out for the past nine months, and I'm just revisiting this now. At this point, we're closing in on three years. A year and a half since we opened the second Shiba Ramen, and a year since The Periodic Table. Pretty unbelievable. Out of necessity, there haven't been any new projects in the works in 2018. I'd rather have something significant in the works, though, so I'm taking baby steps toward the Shiba Ramen franchise program. I want to be taking big leaps by 2019. Right now, I'm just wrapping my mind around it, but I'm getting ready to start drafting documents. I feel like a little work on Ramen Chemistry will motivate me. 

The franchise program has to be a major goal, because we want to focus on growing the brand and getting a licensing stream going. Especially that licensing stream, you know what I mean? In general, I'd much rather be building the concept than doing day-to-day maintenance or store-level operations. Not that I've done much in the way of operations, especially after the first year. This year, it's been mostly general counsel tasks, and some marketing and special events. I've always done all the social media for both concepts--Instagram, Facebook, and some website stuff--but my efforts have been increasingly insufficient. I'm just not focused on it enough. I'm not regularly in the stores, and I lack the ability to generate the constant stream of content needed to keep it fresh and interesting. It would be great to have the budget to outsource and build on the e-marketing program, but we're not there yet. You go to war with the army you have, not the army you might want. Donald Rumsfeld said that. I'm pretty sure I've used that quote on this blog before. It never stops being relevant.   

Great Food in Emeryville. Pig in a Pickle opens soon.  C-Casa and Fish Face are recent additions. Chef Cat Li makes some incredible macarons at Oui Oui (photo credit evilleeye.com). Please come eat their food!

The big story of the year has been recovery from the construction at Public Market Emeryville. What a shitshow that's been. From around March to December 2017, the road and parking in front of the market were turned into a gaping mud pit, when they rerouted the road to make space for a new parking deck and some retail spaces across the street. Continual delays pushed the construction into our winter busy season, by which point sales had deteriorated significantly relative to the prior year, despite our having raised prices. The parking landscape was constantly evolving through the entire period. Access was disrupted and the number of available spaces was insufficient at peak times. Signage and customer education were perpetually short of where they needed to be to maintain traffic.    

When the rerouted road finally opened in mid-December, the disruption actually got worse. The parking logistics changed (again), with barely any guidance for customers, and many of the access points still not open. The sole usable entrance to the main lot was indicated with unlighted 8.5" x 11" signs taped onto sandwich boards. Predictably enough, sales during what should have been one of the year's busiest periods got decapitated. In December 2017, we sold $20,000 less than December 2016, despite higher prices. We'd been looking forward to a robust winter season to get our cash situation back on track after a year full of our own construction expenses and disappointing Public Market sales. The whole episode really left us hurting when the (still ongoing) slow season hit in the spring.  

December 19, 2017. The scene at peak dinner time during peak shopping season. 

And that's not the end of it. Concurrently with the road relocation, the complex added a parking deck with a ground floor grocery. for New Seasons Market, a Portland-based Whole Foods-type concept. The promise of an anchor grocery opening was huge, and was supposed to provide a boost to overall traffic at the end of 2017. Originally, New Seasons was slated to open in October, but the opening kept getting put off throughout the fall. Then in December, it was announced that New Seasons decided to pull out of the project entirely! New Seasons built a grocery store. Its signs were up. It had its shopping carts on-site. And then it decided not to move in. The company abandoned its entire expansion into the Bay Area. The store it opened in Silicon Valley earlier in the year apparently did a small fraction of projected sales, causing it to close that store, walk away from the Public Market project at the 11th hour, and pull out of two other projects at various stages of development. What a fucking disaster, right? So here we are in September 2018, and the they still don't have a new tenant lined up for the grocery space. The New Seasons signs are still up. Once they find a new tenant, who knows how long it's going to take for it to make the inevitable alterations to the space? I'll be surprised if a grocery is operating in September 2019.    

Last month, we got word of another twist in this woeful tale. The developers decided to call off building the parking/retail structure across from the Market because of cost issues. As far as we understand it, the whole purpose of moving the road was to accommodate this new structure. So, you ask, what was the point of all the headache and expense? If you come up with a good answer, we'd love to hear it, because we can't think of one. The silver lining is that the specter of construction will dissipate as the site gets converted into convenient surface parking this fall, rather than being torn up for another year. Other positives in the near future are the completion of around 300 new residential units at the edge of the project, along with the opening of a new playground and dog park. Most of those units are slated to start leasing in the next six months, and it looks like the construction is on track to make that happen. The playground is opening this month. Should help with traffic. 

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Above Left.  So-called Parcel B shown in rendering, with lots of sunglasses-wearing customers walking toward the food hall, presumably to buy drinks at The Periodic Table. Above Right. Recent view of Parcel B, as it has looked for the bulk of the year. It's about to be paved. Photo credit evilleeye.com. 

Near term, we're nervous about the continued dilution of the existing customer base as more restaurant and bar concepts open inside Public Market this fall. We've had the sense that customers are maybe, finally, maybe starting to come back after eighteen months of disruption. That's still a big maybe, because we've only seen real improvement for about a month, and don't have enough data to draw any clear conclusions. But three new concepts are opening in September, requiring hundreds more customers per day to maintain the existing (and totally insufficient, by the way, if the goal is to make money) per-tenant volume. I can predict with some confidence that all the needed customers aren't just going to magically show up overnight, so we're bracing ourselves for another setback. At least the rainy season is coming, hopefully earlier than it did last year. People eat a lot more ramen when it's dark, rainy, and cold. As I've said before, we pray to the rain gods at our house.

The whole episode has been pretty brutal for the Public Market tenants. These are largely small, family-run businesses without ready access to capital or debt. Most are single-location, or a very small (2-3 store) chains, and most of the owners work in the stores to varying degrees. Some of the newer concepts opened to dramatically lower sales than anticipated. Everybody has been limping along, Meanwhile, the City of Emeryville just raised the minimum wage for the third time since we opened in December 2015. It's no wonder we're charging $2.50 more per ramen than we were 30 months ago. 

The one thing I will say is that Public Market has an increasing amount of great food. We're pumped for Pig in a Pickle to open in a few weeks. Amazing barbecue concept from a former French Laundry chef, Damon Stainbrook. He's got a location in Corte Madera we checked out earlier this summer, and it's going to be a huge hit in Emeryville. He's already installed a giant meat smoker in his kiosk. C-Casa (gourmet tacos and Mexican fare) and Fish Face (poke from accomplished sushi chef Billy Ngo) both opened last year. Paradita does fantastic Peruvian street food. Hot Italian has my favorite thin-crust pizza. And a lot of charges from Oui Oui (macarons) and Mr. Dewie's (cashew ice cream) appear on my credit card every month. There are a bunch of other good concepts in the food hall, too, and Super Duper Burger just announced a lease for a full restaurant space. The food, at least, is cause for optimism. 

Nine Months at Sea: Life Aboard the Good Ship Burnout

Where in the world have I been these past nine months? I wish I could give you a good answer. Obviously I haven’t been following through on my stated mission of documenting all the elements of building a restaurant business. The best I can tell you is this: I’ve been cycling through various states of rage, horror, resignation, depression, and sometimes optimism, all overlaid with a thick veneer of burnout. This is modern life, people, the purgatory of adulthood in Trump’s America. This is putting food on the table. You know what I mean?

December 2017 - January 2018: Mordor, Middle Earth

You know what feels good, though? Killing orcs. Violently, and with a sense of purpose. I killed a lot of orcs over Christmas last year. A broadsword through the forehead of this one, an elven incantation explodes the head of another. Flaming arrows, exploding orc booze. Feeling irritable? Shadows of Mordor might help you get back on track. But what to do when all the orcs are dead, as eventually they must be, and you’re still feeling out of sorts? I’ve got no good answer to that one. I played through a series of video games after my trip to Mordor, and dozens of Sunday crosswords after that, and but I confess they’re no cure. Just a distraction for the wandering, agitated mind. It’s what one does when one’s mind is too roiled to even read books anymore. Peace of mind remains as elusive as ever.

Shadows of Mordor. Outstanding game, ridiculously violent.

March to May 2017: Oakland, California

I’ve spent some time working on my house. At the end of every rainy season, our yard is way overgrown, every square inch of open ground covered in oxalis and weed grasses. Pulling weeds is remarkably therapeutic, even more than killing orcs, if you can believe it. And when the weeds are gone, you can plant new plants, all the exotic succulents and flowering plants that grow in California. You get to take trips to the garden center and feel awed by nature’s diversity. I’m looking forward to picking out some new trees this fall to plant along our street. I was feeling particularly aggressive over Memorial Day weekend and took the Sawzall to an ugly evergreen tree and a strip of juniper bushes that have been on my botanical hit list since we bought the house seven years ago. You want therapy? Buy a Sawzall and cut down an ugly (small to medium sized) tree. Both the means and the ends are tremendously satisfying. Figure out what to do with the mountain of branches and the ragged stump when you're done. 

I also went through a toilet repair phase a while ago. Not that I wanted it to be a phase, mind you. I just wanted to fix the broken fucking toilet. But it’s the original from 1925 and, as you might imagine, century-old toilets are not repaired without considerable angst. Suffice it to say, considerable angst was experienced, only to have the repair fail. It seemed so close! At one point, we appeared headed for a nineteenth century life here at our house, so we gave in and bought a new toilet. Believe it or not, it’s really easy to install a new toilet. Unless, of course, you’re attaching it to an aged plumbing infrastructure, in which case you should (1) budget at least three trips to the hardware store and (2) embrace your improvisational skills. When all is said and done, about two months after the initial foray into repair, the 1925 model was replaced with a new Toto with #tornadoflush, and we were instantly whisked back to the 21st century.

June 2018: Akron, Ohio

Right now, I’m on my way back from a long weekend in Akron, Ohio, the Home of LeBron James (as the signs at the city border remind us). This was my big getaway for the year, three solid days of drinking with old friends. Not an exotic destination, but I haven’t been back in a few years, so it was about time for a visit. I had a great time. Friday night we went to see the Cleveland Indians play the Minnesota Twins. Great seats behind home plate, with a panoramic view of 40,000 white people, a shockingly high percentage of the men wearing goatees. The uniform whiteness (and the goatees) must have been familiar to me at some point—I lived in Ohio for twenty-two years—but it seems to surprise me more every time I visit. This was the longest time I’d ever gone without visiting, so the diversity gap was especially jarring this time. There were a handful of black, Asian, and Indian people in the crowd. All the Latinos seemed to be on the field. I’m not being facetious. I looked! Baseball is boring, people, so I had plenty of time to work through my disbelief at the state of whiteness in Ohio.

Chief Wahoo. This is what happens when too many white people get together in the same place. Credit: Jason Miller/Getty Images

On a related note, I was also surprised that the Indians are still playing games wearing the Chief Wahoo logo. I heard they were phasing it out, but it sounds like it’s going to take a couple years to get it off the field. I remarked to my friend, “so I see they’re still wearing the racist hats this year.” The guys in front of and behind us were both wearing Chief Wahoo hats, let’s call them Front Wahoo and Back Wahoo. The Wahoos’ take on the issue can be summarized in the immortal words of Front Wahoo: “at least we don’t call ‘em Injuns.” At least there's that, I guess.  

A little bit later, in some unrelated context, I hear my friend drop the term “mongoloid.” I wasn’t paying attention, so I don’t know how it came up. “I think you’re not supposed to use that word,” I advised. He was surprised to learn this; he seemed to think it was just a technical term of art, not realizing it has become dated and derogatory. My friend went online, confirmed what I’d told him, and learned something. So did Back Wahoo, who was eavesdropping. Close quarters. Overflowing with thoughtful opinions, Back Wahoo announces, “if you can’t say ‘mongoloid,’ this whole stadium’s in trouble!” Now, I’ve never had any reason to think the use of “mongoloid” was so widely prevalent in Northeast Ohio. But on the other hand, how unlikely was it that we ended up sitting next to both Front Wahoo and Back Wahoo out of tens of thousands of people in that stadium. Would our experience have been the same no matter who sat next to us? Later on, Back Wahoo changes the subject, tells us we need to go to the “longest bar in the world” somewhere along Lake Erie, going on at some length about its . . . length. “It’s fucking awesome,” he adds. “Sounds fucking awesome,” I respond.

July-August 2018: Oakland, California

Let’s pause here for a second. I wrote those first paragraphs sitting on a plane from Cleveland to SFO. That was a month and a half ago, and I’m just looking at this again now. I’ve been thinking about it, but that’s as far as I could get. Being strapped into a seat at 35,000 feet is enabling in some way that being here in my house isn’t at this point. I didn't buy the Wi-Fi. My kid just walked into the office for the fourth time since I started writing. I’ve been here long enough to review what I wrote before and write about five new sentences, if that gives you a sense of the frequency. He’s demanding. A delightful little fellow, to be sure, but he expends tremendous effort getting up in my shit. I just bought myself a few minutes by approving Captain Underpants on Netflix. No, wait. I speak too soon. A voice. Footsteps. He’s back. He’s wanting things. He’s gone again. A different show is on. Maybe I have five minutes.

Let’s pause again. It’s now six days later, and I’m just picking this up again. There are cinnamon rolls in the oven, what with the 5-year-old wanting machine having revved up early this Saturday morning. I have ten minutes until they’re done, so maybe I can write two sentences.  I hope I have the wherewithal to pick this up again later today, but I’m not terribly optimistic. So where were we again? I think I was talking about barriers to writing anything other than a lawyer letter or a legal brief. And that’s a segue into perhaps the main contributor to my ongoing inability to write: computer fatigue. I’m already sitting here 40 hours a week staring at these godforsaken screens doing my day job, and that doesn’t count the not insignificant amount of time I spend scrolling through news sites watching our contemporary American Trainwreck unfold in slow motion. Cutting out the news sounds like a great idea, but I’m not sure I have the willpower to pull it off; the next indictment or secret Omarosa tape, and I’m sucked back in. Just like that. Cinnamon rolls are ready. BRB, maybe today, maybe next month. 

This. I think I'll stick with the news for the time being. I was pretty into Season 1 of the Apprentice, but I'm way more into the spin-off. 

I’m back. It’s Monday night. Only two days this time, and I have good things to report. Yesterday my son rode a bike by himself for the first time. We tried a few times over the summer, but the first outings were lackluster. When we were out there, he had a blasé attitude about the whole thing, which drove me nuts. I was keeping him propped up, bent over, running up and down the street, but I had to remind him to push the pedals again and again and again. I yelled at him. It was counterproductive, obviously, but it goes to show I just can’t take it when someone is half-assing it and then gets bent out of shape because they aren’t succeeding. Small children require patience, though, I get it. I changed my tactic. We took him to a park with long paved trails and ran with him on both sides for a long distance, then dropped to one side for a bit, and finally let him go. Positive reinforcement. Success! He was proud of himself, which made me happy. I was hoping he’d learn before he started kindergarten, and he made it with one day to spare. 

Today we took him to kindergarten. First day. We herded into the school’s rec room with 75 sets of kindergarteners and their parents. Amid the din, the children were gathered into groups of 25 and abruptly marched off to a classroom, parents flanking both sides of the kinder-column, waving their goodbyes. You could think of it like one of those scenes of soldiers going off to war, boarding a ship or marching through the town square, attended by an adoring throng of flag-waving loved ones, friends, and citizen patriots. The Oakland parent crowd gives off a decorous white collar vibe, so definitely no rending of garments. I didn’t even see any tears, which I must say is a happy surprise. Let’s not lose our composure or do anything gauche, right?

When the kids were gone, and no teacher or school administrator had made any kind of announcement about anything whatsoever, we found ourselves left alone for what seemed to be some sort of Monday morning parental mixer and networking session. But I had to get to work - those hours aren't going to bill themselves, are they? - and Monday morning at 8:45 is way too early for that sort of thing anyway. We held out for as long as we could under the circumstances, which is to say we grabbed a complimentary coffee, slipped out the nearest exit, and got in the car.  

We went back to the rec room this afternoon to pick him up from the afterschool program. All the kids were peacefully sitting at tables hanging out, doing activities, playing games, looking reasonably focused, seemingly being enriched. My son, alone among the group, was walking around by himself, going nowhere in particular, and repeatedly gesturing his index finger toward his open mouth. What in the world are you doing? I’m hungry, he said. Apparently we didn’t pack enough food, and he’d lost his damn mind out there. Or maybe he’d just had it with how-do-you-dos of the first day of school. Probably both. 

Microcosm of My Life. "Daddy, my pants are on the Sun."  

I offered him pizza and sugary drinks in honor of his successful first day. He told me he wanted mu shu pork and tea from a Chinese restaurant. A surprising response, and somewhat disappointing for me because I’d wanted a good drink, and you can’t even get a mediocre draft beer at most Chinese restaurants. The mu shu was quite good, though, along with the Mongolian beef and garlic bok choy. I’m having a highball right now, so you could say all’s well that ends well. Look how productive I’ve been this evening. 500 words and counting. 

Actually, not counting. I stopped writing after I typed "counting." It’s now Tuesday. But I’m back, which is not bad all things considered. I’m going to wrap this up today, because I want to move on to a series of posts about the restaurant business. Get back into it a bit.

So let's get back into it. I'll be back soon.  

Travels in the Underworld: 2017 Year in Review

Remember just over a year ago, Halloween 2016, when you were thinking to yourself, "man, this year fucking sucked, it can't end soon enough." In due course, you got your wish. 2016 ended, just as experts had predicted it would, but not exactly in the way anyone expected. As the December days fell away, you were suddenly all desperation, clinging to what you were coming to realize wasn't such a bad year after all, relatively speaking. You wistfully swooned over Barack Obama's farewell tour, living brief weeks in a halcyon present, the rising tide of nostalgia concealing undercurrents of dread for the year that was to come.

In between feel-good retrospectives and holiday parties, you daydreamed that the Universe still might bail us all out. In your imagination, a massive sinkhole opened up and swallowed Trump Tower, whisking its human cargo straight to Tartarus for a thousand lifetimes of torment. But fantasy didn't get you very far before you remembered Donald already owns a golf course down there--Trump Underworld National CC--and is reportedly trying to do a licensing deal for a Trump Tower somewhere in the bowels of hell. If anything in the State of New York gets devoured by a sinkhole, you concluded with a sigh, it's going to be a house in Chappaqua, not a Midtown highrise. After all, hadn't Trump, or maybe some sinister, spectral creature in the form of Rudy Giuliani, promised to lock Hillary Clinton up for eternity?    

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Sinkhole. Actually, one opened up in front of Mar-a-Lago in May 2017. Photo credit: Palm Beach Daily News.

When the New Year came, the world still turned on its axis, the same as it had always done. Obama was still President; you got a twenty-day reprieve from whatever horrors 2017 had in store. At that point, though, you couldn't even contemplate life beyond Inauguration Day, the future as unknowable as you'd ever known it to be. But even if you imagined the gross corruption and the nuclear brinkmanship a la Twitter, to say nothing of the hurricanes and earthquakes and shootings--all predictable enough--you didn't imagine their scale or their scope. At Halloween 2016, you actually thought 2017 would deliver you from the Internet-news-cycle zombie-ism to which you'd fallen prey. But if you'd closed your eyes and listened closely, you would have heard a faint voice: "What's up bitches," whispered 2017, "I'm waiting out here, on the other side of your January horizon, and I'm going to fucking eat you all."  

So here we find ourselves, a year later, maybe more zombie than human by now. The news cycle never ends, the Internet is a cancer on our productivity, our capacity for concentration is shot. I don't need to enumerate the specifics for you; you lived through them just like I did. The world is on fire, and we are choking on the smoke. I'm not just saying this metaphorically. The skies of October here in the Bay Area were all orange haze and falling ash, as wildfires burned out of control in Wine Country. Every morning for a week we awoke, our houses smelling as if we'd slept next to campfires, rather than in the comfort of our beds. The children couldn't play outside at school. It was disconcerting and disorienting for us, and devastating for our neighbors to the north.

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Sonoma Wildfire & 2017 Natural Disasters

That's not to say that 2017 has been all bad. Just think back to that Monday morning a few weeks ago, when Robert Mueller offered up the comically ham-fisted colluder George Papadopoulos, a small sacrifice to restore order in the Universe. How, you wondered, did this tyro of a douchebag get a seat at table in the first place, his only qualification to be a presidential foreign policy adviser being participation in Model UN, the details of which he apparently lied about. He looks like the kind of low-level thug that gets killed in the first scene of an action movie. You know what I mean?

In that sense, from Papadopoulos's perspective, it's a win that he arguably made it to Act II before getting killed off. Now he's famous! As a matter of fact, his role is likely to blossom, as we learn about all the conversations he had with other douchebags when he was wearing a wire between his July arrest and October plea agreement. But what of Jared, Junior, and Jeffrey Beauregard Sessions III? The Universe surely requires their sacrifices, too, before any semblance of order can return. Seeing those three assclowns in orange jumpsuits, as satisfying as it would be, still wouldn't cure the disease that made them household names in the first place. In other words, more sacrifices are coming, rest assured, but we have bigger problems on our hands. I realize I'm not telling you anything you don't already know. Public life in 2017, we can safely conclude, was a shitshow the likes of which we American Gen-Xers and Millenials haven't seen in our lifetimes. 2016 was an epic teaser trailer, for sure, but no matter how shitty that year seemed, that's all it really was. 

Papadopoulos Collage. "Following his arrest, defendant . . . met with the Government on numerous occasions to provide information and answer questions."  Upper left is the infamous meeting, unremembered by Jeff Sessions until later remembered by Jeff Sessions, at which Papadopoulos suggested connecting with the Russian government. 

What about private life in 2017? Ramen Chemistry is nominally about our restaurant business, frequent digressions notwithstanding, and there is a lot to say on that front. Before I get started though, as an aside, I take this opportunity to report a new finding made last night: just because fish at the farmers market is labeled "sashimi grade," does not mean you should eat it as sashimi. 

Anyhow, it was indeed a big year for our restaurant business. You might even say a banner year, although it hasn't felt that way, and not in terms of sales. We opened two new stores this year, Shiba Ramen Oakland in February and The Periodic Table in September. As I've mentioned on these pages before, both were expensive undertakings and we had to stretch as hard as we could to get them off the ground. Both projects opened 1-2 months after their target dates. In the case of Oakland, that caused us to miss a large chunk of peak ramen season.

Meanwhile, clouds have hung over our Emeryville business since early spring, with a massive exterior construction project displacing parking, disrupting traffic, and essentially operating as a moat around the food hall. Business dropped around 10% relative to 2016, which in the restaurant business is where all the profit is. The sales differential in the affected period is over $60,000 to date, and still growing. The new road still isn't open, although we're told it will be in a few more weeks, but only after we endure the closure of southbound traffic during the final week of paving. The big anchor grocery that was supposed to be open already just pushed back its opening until March. 

More Stars of 2017.

It was in this environment that we opened The Periodic Table, just as September--the weakest month of the year for Shiba Ramen--was beginning. Public Market was a lunch hall historically, and it doesn't have a reputation as a place to go drinking. We expect that to change over time, when more bars are in the facility, when the grocery and the 500 new condos are open, when it can credibly draw nighttime traffic. But we didn't expect things to start as slowly as they have. Alcohol sales are not exactly strong, and a significant portion is just cannibalism of Shiba Ramen's beer and sake sales.

People don't drink much at lunch, and the Market itself isn't currently capable of drawing much foot traffic after 8 p.m., so we're getting squeezed. Whereas being in a food hall helped Shiba Ramen to be instantly successful, it's having the opposite effect this time around--it's not capable of delivering the type of traffic we need to be profitable doing something other than a fast-casual food concept, particularly now with the construction disruptions. Certainly the longer-term prognosis for the Market is much more positive, but it's clear we're going to have to work a lot harder than the food kiosks to drive our own traffic.

We're doing our best to get the word out--$3K/month PR spend plus lots of social media--and a ton of great press has resulted. Other programs are in the works, starting with a sake/food pairing event (with lecture by yours truly) next month. Disappointment about initial sales notwithstanding, I feel very good about the product we're selling. The alcohol selection is exemplary, and getting better as we add products and build out a solid cocktail menu. The burger is very good, but we need to find a way to sell more. We also need to find a way to sell a couple more lunch items to increase food sales until alcohol sales are capable of standing on their own. 

Construction. Story of the year. 

My optimistic long-term outlook for the business is all well and good (and helps keep the motivation up) but things are still pretty painful today. Hiroko hasn't gotten paid in six months, and she's basically a prisoner of The Periodic Table on weekdays because there is no money to hire a bartender. The financial strain is taking a toll, although with the weather finally changing, I think we've passed through the worst of 2017 from the perspective of Shiba Ramen Corporation. The structure is now in place, so we have to figure out how to make money--and wait for the development to fill in around us and drive more natural traffic. That goes for our Oakland store, too, which is also in the midst of a ton of large-scale but still unrealized development. 

Meanwhile, I'm still practicing law everyday, and doing the bulk of the childcare around the house. Preschool is great, but it's damn expensive and they are on vacation all the fucking time. Three weeks in August, a week again starting tomorrow, and every pseudo-government holiday in between. As is true of so many people of our generation, we're living our life out here on an island, far from where we came from and without a support network. When I was a kid there seemed to be other kids and relatives and stay-at-home moms everywhere. Today everyone works all the time; families and friends are not down the street. We manage everything ourselves, except what we can afford to outsource. 

For months my mood has been dour, continuing this juggling act day after day with no respite, and no end in sight. External circumstances--the National Dumpster Fire and the ramen sales climate--add pressure to an already challenging situation. I feel exhausted when I wake up, in the morning my thoughts are viscous and unfocused, I require celebratory drinks in the evening as a reward for getting through the day. Nightly, after the bedtime routine, my face contorts at the thought of returning to my desk and facing the computer again. It's hard to get anything done. Something has to give at some point, doesn't it? 

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Successful Projects. Now they need to make money!

How should I feel about 2018? Well, how do you feel about it? Shit could definitely get worse, especially out there in the world. I'm not expecting deus ex machina in the form of an impeachment, but I could, however, imagine the chief executive choking on a chicken finger or a mozzarella stick; I just don't think it will go down that way, or that Presidential demise by rogue jalapeno popper is going to solve the bigger problems we're facing anyway. But for the time being I will relish the indictments as they unfold. General Flynn and son, are you gentlemen up next? As a new year's resolution I will try to look at the Internet less and get out of the house more.

On the business front, I'm optimistic. We're not building any more restaurants until the ones we have are making money, so no more capital expenses. Sales likely improve across the board as development progresses, and as we build our reputation. The coffers become replenished, and mental health improves accordingly. Whether it goes down this way or not remains to be seen, but for now I say, l'll say what I said at Halloween 2016: "man, this year fucking sucked, it can't end soon enough." I'll add, "let's give it up for 2018."

These Three. 2017 wasn't all bad.