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How Flexible Rent Arrangements Can Save A Restaurant

Nicola Blaque is the owner of Caribbean restaurants The Jerk Shack and Mi Roti in San Antonio, Texas. Her third restaurant will debut next year inside Hemisfair, a park run by a nonprofit offering local business owners restored homes with flexible rent agreements.

I had a restaurant about five miles away from Hemisfair, and it wasn’t on the best side of town. I moved to San Antonio in 2014, and I went to culinary school, so I wasn’t the most familiar with city demographics and crime. When I signed the lease on my first location, I didn’t see anything that seemed bad. I was too busy working. I have a military background, so you kind of just overlook some things. Nothing can be as bad as being in Iraq or Afghanistan.

Then, once I was in business, I was like, “Oh, my gosh, nobody’s gonna come here after five o’clock.” My whole business for the first two years, it was like that. I couldn’t open past five o’clock because certain things were happening in the neighborhood and around us. I didn’t feel the safest—nor did my employees—on the weekends. I had a food truck that I would park there, and one day I came in, and all the windows were busted out of my food truck, and they stole my generator. It really hindered my business on how to grow.

In 2019 and 2020, I was listed as one of the best restaurants in America, and so if I wanted to keep my business going, I really needed to figure this out. I could not stay at that location. I was searching for a place when I got the call from Hemisfair. They said, “We’re expanding the park, and we’d like you to take a look at an opportunity.”

This was before I opened up Mi Roti at the Pearl and my latest Jerk Shack. I was still new in the game, and I wasn’t quite sure. I actually got with a real estate broker, and they helped me put together my package on why we thought that Jerk Shack would fit in a space like that. One of our biggest reasons was just to move to a safer location and give the customers that were already visiting us more hours, a safer environment, and allow us to expand the menu. I receive a lot of customers from the colleges that are downtown and the military, and I just wanted to be in a better part of downtown.

Unfortunately, the first bid that we put in, we didn’t get. I would say almost a year later, they said that there was another bid coming up, and we had the opportunity to submit again, and we actually won that bid. They really liked our story and where we came from, and they had also eaten at The Jerk Shack plenty of times.

Since the bid and all that kind of stuff took longer, I opened up another Jerk Shack about 90 days ago on the other side of town. Originally, it was to replace the first location. I was still in that situation where I needed to figure out a plan ASAP to get out of there.

A spread from The Jerk Shack in San Antonio. Photo: Jason Risner.

I ended up doing a brand new build-out on a location over by SeaWorld. With my lease at our new restaurant, it’s a set base rent, and then various fees. I knew from the buildout when I would start paying rent and what that amount would be. With Hemisfair, they can’t give you any tenant improvement dollars because they’re a nonprofit. What they can do is rent abatement, which means they can either have you not pay rent until you make a certain amount of sales—which would equal the tenant improvement dollars—or they can discount the rent until you hit a certain point, and then you would start paying rent. So we went with a mixture of both. We’re not going to pay rent for a certain period of time, and then when we get to another point, it’s going to be discounted. All of that is to help with the buildout, since all of those costs are going to be on my end.

Because of what’s happened to restaurants during the pandemic, these types of rent agreements also make the restaurant feel secure. I think those other more traditional agreements where the rent is due during this time, and at this rate—that’s why a lot of restaurants close. If they were with a landlord that had a nontraditional agreement, probably from the beginning, they would have understood what restaurants were going through.

That location now that we’re open, it’s longer hours, it’s the bigger menu, and it’s kind of changed what I had planned for Hemisfair. Some of what I’ve always wanted to do but didn’t quite know how is showcase Caribbean food in more of an elevated aspect—not so much the general comfort street food. I’m thinking it may almost mimic something like a Caribbean steakhouse. We’ll have apps, we’ll have main courses and sides. I’m looking at the other restaurants that are there at the park. Dough has more like an upscale pizza, and then we’ve got Box Street Social, and they’re more like an upscale brunch. So I want to fit the theme that I think Hemisfair is going for, which is a nice place for locals to have a great time and possibly take a night out or enjoy a nice midday spot.

I’m leaning towards raising that price point. I need a higher ticket. Employees, they’re just not the same dollar anymore. And I agree with them. Things in life are not the same anymore. When I had my son two years ago, Pampers to what Pampers cost now with my daughter are two different prices. So, if I can see the changes that are happening in the world, of course, my employees are feeling that. I need to be able to bring in more money just through food and drink sales so I can provide more dollars to my employees.

I can say, I’m very fortunate. Of the women-owned businesses in the city, I have two restaurants in two of the most desirable parts of the city. It’s very hard—sometimes I feel like I’m working ten times harder than others. Specifically, male businesses probably don’t have to work this hard. If I’m with my male chefs, people automatically assume that the businesses belong to them and not me. I have hurdles like that I’m jumping over daily.

Hemisfair decided to partner with me and say, “Hey, we support this woman-owned business, and we’re allowing them to be in a space where millions of eyes are going to be on them on a regular basis.” They are offering opportunities that wouldn’t just normally come across to me.

When I started with this, I didn’t have a goal of being in the best spots or making the most money. I had a goal of spreading the best chicken across San Antonio and hopefully Texas. That was the only goal that I had, and so with that, all of these other wonderful things came.