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Marsh Manor, Atherton Subs disagree over sandwich shop's closure

Uploaded: Dec 28, 2015
The owner of a recently shuttered, longtime sandwich shop at Marsh Manor Center in Redwood City and the owners of the shopping center disagree over the events leading up to the shop’s closure.

Atherton Subs, which has operated at the 995 Marsh Road shopping center since 2004, closed last Monday, Dec. 21. Owner Henry Nguyen posted a sign in the window that reads: "Due to the loss of lease contract after 10 years of seeing you, we are now closed for good."

Yet the same day, on Dec. 21, the owners of Marsh Manor sent out a message to their email subscribers that said Atherton Subs would be closing at the end of the month following a 30-day retirement notice Nguyen gave on Dec. 1. He had also "mentioned his future plans" a few months ago to owners Dorine and Jerry Secrest, the email reads.

"We are actively seeking a new and suitable business to take over the space, but have nothing to announce at this time," the email reads. "Henry is a very friendly person and has always been a joy to have as a tenant at Marsh Manor. We wish him the best in his retirement."

The email also shares Nguyen’s contact information for anyone who might be interested in purchasing the shop’s equipment.

Nguyen did, in fact, let the Secrests know in July that he planned to sell the business to retire early. But he said that he only made that decision in light of seeing how the owners treated other mom-and-pop businesses in the revitalized shopping center -- giving them month-to-month rather than long-term leases to preserve the opportunity to bring in new tenants, he thought.

Marsh Manor’s property manager, Chris Hopkins of Westmont Real Estate Services, wrote in an email that the owners "naturally kept a few tenants on a month-to-month basis to keep our options open for what is best for the future of Marsh Manor. If we did not have that opportunity Marsh Manor would not be as successful as it is today. A successful shopping center has to adapt with changing neighborhood needs for goods and services."

Nguyen "only sees the end result of tenant turnover, was not privy to any of the reasons for turnover, and subsequently draws inaccurate conclusions," Hopkins said.

For his part, Nguyen spent the next several months searching for a new business to take over the space and recoup the $273,000 he spent to open the store a decade ago, but was unable to do so, he said. Where he saw the Secrests as unwilling to help him do so, forcing him to close, they saw a failing business that they had tried to support, but that didn’t fit with their long-term vision for the revamped shopping center.

The now-closed Atherton Subs at Marsh Manor in Redwood City.

Nguyen first joined the Marsh Manor fleet of businesses as a Quizno’s franchisee when the original owner, Dorine Secrests’ father, Richard Delucchi, was still at the helm. (Delucchi, a Woodside resident, died in February.)

When the Quiznos started to go downhill, Nguyen requested to stay on as an independent sandwich shop, according to Hopkins. The Secrests agreed and even came up with the name “Atherton Subs,” Hopkins said. They renegotiated a new, two-year lease. Once that ended, Nguyen went month to month. The owners have kept his rent at $4,000 per month since the renegotiated lease 10 years ago, Hopkins said, despite rising maintenance costs.

"We bent over backwards helping him for 10 years," Hopkins said in an interview.

This summer, on Aug. 4, Nguyen emailed Hopkins and Jerry Secrest to let them know he planned to retire early and sell Atherton Subs.

"It was a great time doing business with you as my landlord, especially when you let me try to do the Atherton Subs as an independent business. I appreciated your kind heart so much and the chance you gave me to continue doing business after Quiznos.

"Now I need your help to give the new prospected business owner a good lease so that he/she can do business with you long term," he continued. "With your help, I can have some capital to help me plan for my retirement."

The Secrests said they considered several food businesses Nguyen brought to them over the next few months, including House of Bagels, Main Street Bagels and Mountain Mike’s Pizza. This was despite a desire to bring in a different kind of a tenant -- preferably a non-food national tenant, like a bank, though they were open to the right food establishment if it came along, the Secrests said. They said they were open with Nguyen about this preference.

"We're trying to upgrade the center, so we wanted a national tenant, not a mom and pop," Hopkins said. "We interviewed these tenants and they were essentially mom-and-pop tenants."

The Secrests said when they visited local outposts of both House of Bagels and Main Street Bagels, they weren’t well-patronized, so they weren’t convinced they would be successful tenants. The center also has breakfast food well-covered, with both Starbucks and Squeeze Inn, a breakfast restaurant that opened in March.

Moreover, Atherton Subs occupied what Hopkins described as Marsh Manor’s "premiere" space, on a "key corner" of the shopping center with more visibility along Marsh Road.

"We'll get higher rent there than anywhere else in the center and he wants us to go ahead and lease it to a mom and pop, and that's not what we want to do," Hopkins said. "So we're being picky and I believe reasonably so."

Unable to find a new tenant, on Dec. 1, Nguyen sent his official 30-day closure notice via email to Hopkins and Jerry. He made another plea for help in finding a new tenant so as to recover the investment he made to build and open the store, but said he planned to close by the end of the month.

Hopkins and the Secrests said they were shocked to hear soon after that Nguyen was telling others that they had given him a two-week notice and he was losing his lease.

Nguyen told me the same last week when reached by phone: "Retiring is not true," he said. "I lost the lease. That’s just the surface."

He described the owners as "greedy" and "cruel" and that they "cold-bloodedly rejected" at least three pleas for help finding a new tenant.

"Now I walked out of my business, empty handed!" he wrote in an email last week.

Nguyen thought they refused him another long-term lease so that they could easily bring in a new business if they found one -- perhaps a Verizon Wireless store or "high-end restaurant" he said -- but Hopkins said it was because business at Atherton Subs was "deteriorating." The Secrests and Hopkins said Nguyen could have stayed longer and chose his own closure date.

"We're not pushing him out because we have somebody ready to go," Hopkins said. "In fact, we're going to lose money now until we find somebody."

Jerry said that "the space will be vacant until we find a suitable tenant."

Marsh Manor was originally developed 50 years ago by Richard Delucchi. The shopping center has undergone significant change over the years that Atherton Subs was there, with a remodel done about five years ago and the addition of new businesses like Freewheel Brewing Company, Angel Heart Cakes (which was sold last month to a new owner), Squeeze Inn, Vibe Yoga and others. Key Market also closed in September 2014 after 20 years of business, making way for Delucchi’s Market, which opened in October 2014. Other current tenants also include a beauty salon, dry cleaner’s, dentist, AllState insurance store and a personal-training business. What used to be a liquor store will house a new pet store in 2016.

"We have to do what's good for all the other tenants, what makes sense, what's going to bring in more business for them," Dorine said about their attempt to find a new tenant for the Atherton Subs space

"For us, too," Jerry added.
What is it worth to you?


Posted by MV Foodie, a resident of Old Mountain View,
on Dec 29, 2015 at 9:10 pm

Slow news week between the holidays? This is easily the most boring article of 2015.

Posted by ChrisC, a resident of College Terrace,
on Dec 29, 2015 at 11:23 pm

This is a Blog about food. It's not filler for a slow news day. I clicked on "more" because I was interested. I am often at Marsh Manor and have wondered about Atherton Subs, although I never tried it. I am always interested in food places opening and closing, which is what this Blog covers. Thank you Elena.

Posted by MP Resident, a resident of Menlo Park: Suburban Park/Lorelei Manor/Flood Park Triangle,
on Dec 30, 2015 at 9:51 am

Yes, I think opening and closures of restaurants is certainly of interest to residents of the area.

What I will write though is that the article left me quite confused. There's an email where the owner of Atherton Subs says he intends to retire and then he claims that's not true? The truth lies somewhere in between the two sides of information that's provided here.

I'm sorry to see Atherton Subs close. My family patronized it when it was Quiznos and when it was independent. I wish the owner good fortune in his retirement or next endeavor and I hope there's some closure on what is clearly a massive misunderstanding.

Posted by Reader, a resident of another community,
on Dec 30, 2015 at 9:55 am

ChrisC is correct, this is a food -- or more accurately, a restaurant -- focused blog. Restaurant openings and closings are frequently covered by this author.

This article is actually more interesting for its glimpse into the world of local commercial real estate and how it affects mom-and-pop restaurateurs. Many residents decry the loss of independently owned eateries, and reading about some of the economic forces that influence these businesses is revealing. It's not always the landlord's "fault" (like Woodside Bakery), sometimes the restaurateur cannot adjust to modern dining patterns (like Scott's Seafood in Palo Alto) or simply provide the type of restaurant experience that will have customers coming back (the shuttered Mixx restaurant in Mountain View, formerly Scott's Seafood, formerly Cantankerous Fish).

Of particular note here is the apparent difference in the communications that Nguyen had with his landlords and what he recounts to the public, particularly the August 4 e-mail indicating Nguyen's intent to retire.

The fact that his rent has stayed the same over 10 years --even after it went to month-to-month -- is noteworthy. That shows a certain amount of patience by the landlords.

Posted by interested, a resident of Atherton: Lindenwood,
on Dec 30, 2015 at 6:11 pm

@MVFoodie: why so hostile? Elena Kadvany writes about the opening and closing of restaurants -- and does it with thorough reporting. If you're not interested in the subject matter, simply skip the article. Your dismissal of this story as "boring" says more about you than it does about the article.

Posted by interested, a resident of Atherton: Lindenwood,
on Dec 30, 2015 at 6:11 pm

@MVFoodie: why so hostile? Elena Kadvany writes about the opening and closing of restaurants -- and does it with thorough reporting. If you're not interested in the subject matter, simply skip the article. Your dismissal of this story as "boring" says more about you than it does about the article.

Posted by Max Hauser, a resident of Old Mountain View,
on Dec 31, 2015 at 11:09 am

Max Hauser is a registered user.

Reader raised an excellent point: diverse factors can imperil local restaurants. My neighborhood is a laboratory of restaurant-business experiments, over 80 closures since 1990 (some after months, some after 30 years), even as their total number gradually grew.

Besides the factors Reader mentioned, there are changing tastes. Cantankerous Fish (cited above) was going gangbusters 10 years ago, and certainly had customers coming back; it expanded, taking over an adjacent storefront. Yet by 2014, "white-tablecloth traditional seafood" had become unpopular with the local market; principal owners called it quits and a completely different format took over (which failed).

Thriving peninsula downtowns (with high commercial rents) that seem like happening places also attract what industry veteran Frank Klein called "inexperienced restaurateurs going in and then going out of business within two years." Another pattern is the concept that looks great on paper, and has experienced people behind it and/or good planning consultants, yet none of those people stays around to see the vision through. Owners hand off the enterprise to new hires expected to implement someone else's vision, and the business never once makes its expenses. Those two situations accounted for many recent examples of the 80 closures I mentioned.

Posted by wondering, a resident of Portola Valley: Central Portola Valley,
on Jan 1, 2016 at 7:28 am

i am a bit confused - How is it the responsibility of the landlord to find a buyer for the sub sandwich shop ? The owner gave the Secrests notice that he was planning on retiring about 4 months ago & now is it "retirement remorse"? I also, think the landlords were generous to not have raised the rent for 10 or so years . You certainly wouldn't have found that on University Ave in Palo Alto.
After all, it is a business on the part of the Secrests - Nguyen played his cards first.

Posted by charles reilly, a resident of another community,
on Jan 5, 2016 at 11:23 am

Glad to see so many positive comments toward Elena's blog. I was raised in the restaurant industry, and it's much tougher than most people think.

There's a new Seafood Restaurant on El Camino in San Carlos. Fish has gotten expensive and lunch items are north of $15.00 Dinner entrees are way more. Being on El Camino means little foot traffic - so these new owners will struggle.

"transitional" commercial space often gets rented to restaurants . The Landlord would rather have a Wells Fargo, but Wells Fargo demands "prime" space. Likewise, mom and pop restaurants don't always get the best locations.

Finally, Restaurant customers act like spoiled babies - expecting Ritz Carlton service for pizza prices.

Tough business ...

Posted by Hmmm, a resident of another community,
on Jan 5, 2016 at 11:46 am

I'm sorry to see such a snooty attitude expressed in wanting a premiere tenant. Two of the draws for us - Yat Sing and Los Gallos - are because they are NOT premiere. Both have specific dishes we've enjoyed for years. We never cared that there's a Starbucks on the corner. While it's nice how the place has been redone and upgraded, it's also made us wary of potential changes that make it like Town & Country, for example. I know that we're not alone in this, and hope that Hopkins reads this comment.

Posted by Plane Speaker, a resident of Crescent Park,
on Jan 21, 2016 at 6:15 am

>> I also, think the landlords were generous to not have raised the rent for 10 or so years

There is just something fishy here ... no pun intended. If the landlord, if any landlord
around this area did not raise rent on a tenant, you can jolly well guess that there was
some financial reason he did not. Either the poor tenant was paying too much for a
very long time until such a point that what he was paying and what a new tenant would
pay would have been about the same and the differences would have been the cost
to fix the place up and rent it again. No landlord gives away money because he is a
nice guy

Posted by Todd Secrest, a resident of Old Palo Alto,
on Jan 21, 2016 at 11:23 am

I'm Richard Delucchi's grandson (Richard Delucchi being the guy that built and owned March Manor).
The owner of Atherton Sub not having his rent raised in the years was more like just luck, for him, from the overall circumstances of the whole situation.
Right now the space what was Atherton Subs is empty, so zero rent coming in on that space and it might take awhile to get the space rented again.
So March Manor would have been better off if Atherton Subs had stayed in business, paying rent. but it was Nguyen who had wanted to retire.

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