Detroit Restaurant Faces 300% Rent Hike, Possibly Being Pushed Out
By Ryan Velez
After being the butt of constant jokes and stereotypes regarding its poverty and the dearth of jobs in the wake of the recession, Detroit is having a bit of a comeback. While there is a long way to go before Detroit claims a place among the other major cities in this country, the downtown area, in particular, is drawing plenty of business interest, showing some resurgence. But as a recent story from the Detroit Free Press shows, this comes with a cost.
Ms. Ruth’s Catering at Hannan Café has been a favorite for Wayne State University students and local residents, but in the wake of business growth in the area, its days may be numbered. At the moment, owner Ruth O’Quin has been at the location for five years and is paying $1,750 per month in rent. However, when her lease runs out at the end of the year, this rent could leap to $7,000. The real estate company handling the lease told O’Quin and her daughter, Tammy Reed, that they were looking to get $35 per square ft for the space.
This isn’t the only story of a local Detroit business feeling the squeeze of rising real estate prices. Names like Henry the Hatter and Angelina Italian Bistro have had to relocate or potentially partner with other businesses because of skyrocketing lease rate increases. Ms. Ruth’s Catering is in a building owned by nonprofit the Luella Foundation.
"We're a nonprofit organization that helps seniors," said executive director Vince Tilford. "One of the ways we can do that is to get better rent in our building so that we're not subsidizing it and to continue to support our seniors.
"Our real estate agent is saying that we might be able to get $25 per square ft,'' he added. "Currently, what we get for that space is less than $7 per square ft; far, far from the market. In addition, the current lessee there gets an additional 800 square ft to use. It's a lease rate that's well below anyone in this market is paying.''
Dion Peoples, who works nearby, notes how O’Quin is beloved in the neighborhood. “She is becoming the victim of the renovations in downtown Detroit,'' he said. "Her and several other people. These mom-and-pop corner stores are the ones suffering. I feel bad for her because she works hard. She’s there bright and early at 6 o’clock in the morning, prepping food. She has done some Detroit police officers' funerals at her will, not knowing if she was going to get paid or not. You don’t find too many people that reach out like that.’’ At the moment, while O’Quin plans to fight for her space, she is willing to move somewhere else nearby if there are no other options.