Government

California Bar’s New Leasing Tactics Prompt Demise Of Beloved Coffee Shop

The State Bar has been criticized for below-market lease rates in San Francisco.

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Officials in Sacramento have been critical of the State Bar of California for not maximizing revenue from leasing space in its San Francisco headquarters, as I recently reported.

Apparently, the Howard Street Coffee Roastery was a victim of the State Bar altering its approach to real estate management.

The coffee shop long housed on State Bar property permanently closed its doors at the end of July.

Owner Jane Heng said the shop was told months ago its lease would not be renewed, which she suspected was because the bar wanted to raise its lease rates. She said the news the coffee shop would have to leave left her in tears.

“All of the small businesses are being kicked out, and the giants are coming in,” Heng said, speaking about broader trends in the city. “It is so sad.”

State Bar spokeswoman Teresa Ruano said the bar’s goal “is to maximize the profitability of its assets.”

“As leases expire, new leases are negotiated at current market rates,” Ruano wrote in an email. “The Coffee Roastery did not communicate a desire to continue leasing the space at current market rates. The State Bar is currently negotiating a lease for this space with another food operator.”

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Attorneys who defend practitioners facing State Bar Court charges are among those disappointed to see the coffee shop go.

Samuel C. Bellicini, an ethics lawyer based in San Rafael, said he would visit the Coffee Roastery every time he visited the State Bar.

“I saw Jane, bought a cup of coffee and tipped her,” Bellicini said. “We loved and adored her.”

He questioned the bar’s priorities, amid all that is on the agency’s plate.

“Don’t we have bigger fish to fry than to kick out a coffee shop everybody loved?” Bellicini said.

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Jonathan I. Arons, a San Francisco ethics lawyer, is another fan of the Coffee Roastery who bemoaned its closing.

“I’ve been a devotee almost since they opened,” he said. “When I had trial at the State Bar, I would go in every morning.”

“I’m a fan of the smaller places rather than the Starbucks-type places,” Arons added.

Heng said there are no plans for the Coffee Roastery to open in another location.

The news about the coffee shop’s closure comes in the aftermath of the state auditor reporting that the California bar is leasing spaces in its headquarters at below-market rates.

“In 2018 and 2019, [the] State Bar entered into four leases for its San Francisco building with below-market rates that range from $12 to $28 per square foot less than those of comparable properties,” the audit said. “Even if [the] State Bar had leased its space at the lowest of the appraiser’s market rates, it would have earned $777,000 in additional revenue in just the first year of the four leases.”

Meanwhile, the California Assembly recently amended the bar’s annual funding bill to express the Legislature’s intent that “all leases entered into by the State Bar for lease of State Bar property on and after January 1, 2020, be at or above market rate in order to reduce licensing fees.”

Lyle Moran is a freelance writer in San Diego who handles both journalism and content writing projects. He previously reported for the Los Angeles Daily Journal, San Diego Daily Transcript, Associated Press, and Lowell Sun. He can be reached at lmoransun@gmail.com and found on Twitter @lylemoran.

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