UPDATE, SUNDAY, AUG. 6: The Midtown Residents Association has started a petition drive in the hope that they can persuade the landlords of Mike’s Diner Bar not to evict the restaurant and bar. The petition can be found at https://tinyurl.com/mikesdiner. Annette Glanckopf of the Midtown Residents Association said in an email she sent to other neighborhood leaders that she hopes the petition will catch the property owners’ attention and be convincing.
ORIGINAL STORY, THURSDAY, AUG. 3 —
BY BRADEN CARTWRIGHT
Daily Post Staff Writer
The owner of Mike’s Diner Bar in Midtown Palo Alto is facing eviction because he paid his rent one day late.
City leaders are trying to help, but the landlord isn’t talking.
“I couldn’t believe it. Nobody could believe it,” said Mike Wallau, who grew up around the corner and has run the restaurant for 29 years.
Mayor Lydia Kou, Vice Mayor Greer Stone and City Manager Ed Shikada have reached out to Wallau to help, he said.
Wallau’s rent is usually due on the 15th of each month, but that fell on a Saturday in July so his rent was due on Monday, July 17.
Wallau said his daughter was sick that day, and he had to take her to the emergency room at El Camino Hospital. Wallau dropped his $22,052 rent check off the next day.
Property manager Eugenia Seraia wrote a letter to Wallau on July 20 saying that he was a day late, violating their agreement.
“Owners are proceeding with the eviction,” Seraia said.
She returned the check to Wallau. Seraia works for a property management company on behalf of two property owners: Scher Holdings LLC and Finebaum Surviving Spouse’s Trust, according to the letter.
Reason for eviction unknown to Wallau
“I don’t think they could get another restaurant in there, so I’ve just been trying to figure out what their motivation is,” Wallau said.
Wallau said he had a good relationship with the previous landlords, but they died and left the property to their children.
Wallau’s lawyer is working on a motion to set aside the eviction.
“It’s a fluid situation,” he said.
The Post learned about the eviction last night and was not able to reach Seraia or the property owners.
Wallau said he spent more than $2 million on a renovation of the building at 2680 Middlefield Road in 2019, and then Covid hit.
In February, four businesses were displaced by a fire just down the street from Mike’s Diner Bar. Bill’s Cafe, Palo Alto Fine Wine and Spirits, Philz Coffee and AJ’s Cleaners have been closed ever since.
Wallau and his neighbors are trying to revive the Midtown Merchants Association, a group that has been dormant for at least a decade.
The city and the Chamber of Commerce had a mixer at Wallau’s restaurant on July 18 to help jumpstart the struggling shopping center.
“We were on a roll,” said Annette Glanckopf, chair of the Midtown Residents Association. “Mike was going to be the key lynchpin to bring back the Midtown business association. Now this is really a nail in a coffin for Midtown retail.”
Mike’s is an important part of Midtown. Without it things will go downhill fast. And the value of the landlord’s building will drop like a rock if Mike’s has to close.
This looks to be a case of a mean spirited landlord who is going to let whatever grudge he has against Mike cost him $22,000 a month. Stupid!
If the owner thinks they’re going to redevelop the property, Mayor Kou needs to tell them that’s not going to happen. Their plans will be fought every step of the way. If the PTC and City Counsel doesn’t fight this redevelopment, we need new people in there who will.
Maybe the original owner’s children want to put up a couple of high-rise housing units on the property. Midtown is a wonderful part of Palo Alto, but seems ripe for developers to destroy it.
What do the heirs of Scher and Finebaum propose to put in the place of Mike’s? It’s always bad news when adult children inherit the family’s assets, and then destroy them, as is taking place here. I can think of other businesses that died that way.
Mike’s been very involved in the community. Even if a restaurant replaces him, it will probably be a part of a national chain, which means no community involvement at all.
Is there a petition drive to stop this eviction?
If Mike was on notice that he’d be evicted if the rent was even one day late, why didn’t he pay them through direct deposit? And why is he waiting until the end of the month to pay? I’d like to hear the other side of the story.
I’m sure he’s been trying to keep his head above water after the forced COVID closures. I doubt he has much cash laying around to pay the rent early. A lot of people don’t understand that local businesses are in bad shape after the lockdowns, and that’s why they keep closing.
If Mike was tied up at the hospital, why didn’t he ask one of his employees to come over and pick up the check and bring it to the landlord?
This doesn’t make sense. Why would a tenant make 2M in improvements on a month-to-month lease?
“The pandemic put restaurant owners in a terrible spot as they were forced to close with no income.”
The “pandemic” did no such thing. Public health officials and politicians issued lockdown orders and ordered “non-essential” businesses closed.
I also take issue with your use of “forced to close”. Businesses should have defied the orders and stayed open. If enough businesses had, the “emergency” measures would have ended a lot sooner. Where was Mike in 2020 and 2021? He could have rallied his fellow store owners to unite and resist oppressive lockdowns.
This has been a challenging time for everyone but nowhere has it been more difficult than for small family owned restaurants.
So what’s the flip side? Great time for landlords to take advantage and deliver a final death blow. And reap the benefit from the huge investment in their property made by Mike at his own expense. The pandemic put restaurant owners in a terrible spot as they were forced to close with no income. Coming back from that takes time! Mikes is doing everything he can and it appears
to be working slowly but surely. Mike has a multi year lease but the landlords refuse to negotiate or work with him. Granted the landlords own this and several other properties and they hold the cards but please don’t feel too sorry for them as the landlords owe nothing on any properties. Their father paid off the mortgages on every property so this is all about profit! There’s no hardship for them they even made Mike pay the taxes during the pandemic so they never lost a dime. It’s not as if they have obligations beyond their very low prop 13 property taxes so why not work with Mike just a little? But they aren’t budging they are unwilling and one of them even questioned if Mike really has a disabled daughter and said he’s “so sick of hearing about her”… evidently tons of money is still not enough and they don’t care about the impact on people’s lives. These landlords certainly don’t give a hoot about the community. It’s all about greed … more more more. Money money money. Disgusting. What a loss.
The worst part of this dispute is the involvement of city officials. It’s none of the government’s business. This is a private matter. They made promises in the lease. If one of the parties feels wronged, they can work it out with the other party or take the matter to court. Politicians should stay out.
Of course its the govern,ent’s business since they’re letting geeedy landlords destroy all retail and restaunts in their push to rezone for offices and medical. So just say no to them and enforce retail protections.
City councils of the past rushed to approve office development to the point that commuters outnumbered residents 4:1 which stuck residents with the costs of higher density requirements, time lost being stuck in gridlocked traffic, paying a higher share of the costs of government since commercial landlords aren’t taxed more while they keep raising rents and pushing out resident-serving businesses.
The community support is heartwarming, and I feel bad for Mike. Working with someone is a win/win situation. But this isn’t an emotional decision. It’s a business transaction. He has a history of paying his rent late, and that’s why the “one day” clause was implemented. If you choose not to pay your rent on time, there are consequences.
I like Mike too! I frequented his Ladera location for years. Saw him there all of the time. But he was previously delinquent and the lease was written specifically due to previous late payments. The owners obviously have their own agenda. This is a lose lose situation. The rent is too high unless the place is packed day and night. At the end of the day it’s about money. It’s very sad, but this isn’t a hot spot. To make the rental payment and any profit seems truly overwhelming. I understand that everyone is emotional about the situation, it doesn’t seem fair or right, but I am doubtful. There is definitely more to the story. Sometimes you need to step away from the emotional side of the situation and look at the facts. I wish the best for Mike!
Here’s a link to the petition to try to help save Mike’s. Please sign and share widely.
https://docs.google.com/forms/d/e/1FAIpQLSfz_IW8DsWIahwZTC5DhcWVpsr0LYZMhm2JgF2LHERrfERpzg/viewform
What good will a petition do? Make the signers feel better? Mike knew when the rent was due and he missed the deadline. His excuse doesn’t matter. The property owners have every right to break the lease and remove him from the premises. That may be sad to some people, but it’s how leases work.
His rent was $22,052 a month?! Yikes! Maybe it’s a blessing in disguise that he’s being evicted. I’m sure there are less expensive locations, especially with all the boarded up storefronts.
I can’t wait for the next televised city council meeting when they have a public hearing on this. It’s time to get some popcorn and a drink because it will sure be entertaining. The people taking Mike’s side will basically argue that capitalism is a bad thing and that wealth should be taken away from the wealthy and distributed to the less fortunate. The speakers all got hooked on socialism/communism in college — which in some cases was 40-50 years ago — and they’re always looking for an opportunity to inflict their views on the rest of us. Council members will agree with them because most were socialists/communists in college, too. It’s not Mike’s fault, but these people never miss an opportunity to preach to the rest of us. It will be fun!
[Comment deleted. The quoted material was not from the Daily Post, as the author had claimed, and it is believed to be copyrighted. Terms of Use violation.]
A lot of leases have a late charge if the rent payment is late. This one may not have that provision.