Flipping The Neighborhood
Behind the scenes of a gentrifying community
This story appears as part of “York & Fig,” a special series about gentrification from Marketplace’s Wealth & Poverty Desk:
For 23 years, Frank Cordova owned a little shop on Figueroa Street in Highland Park. It’s one of those shops that sold a bit of everything: Shampoo, car speakers, picture frames, dictionaries, all at a deep discount. Frank had been behind the counter, selling this stuff every day since 1991, when he hired a mariachi band to play at his grand opening.
In all the years since, he’d taken no vacations, no sick days, no days off for anniversaries or birthdays. His motto: “If it’s raining you come to work. If it’s sunny you come to work. If it’s cold you come to work. If it’s windy you come to work. No matter how it is, you always come to work.”
That is, until the day you don’t.
In early November, Frank packed up his remaining merchandise, put it in storage and went out of business. There were many things that lead up to this day. Lots of his usual customers, mostly working-class Latinos, had moved away in recent years or just weren’t buying stuff like they used to. The last straw was when he got a call saying the building his store was in had just been sold and was going to be renovated — and that after two decades of never going up, his rent was about to increase “significantly.” Before he even heard how much, Frank decided it was time to go.
On one hand, closing the store feels like a relief, Frank said. On the other, “it feels like crying.” He thought for a moment. “But what can we do? Everything changes you know. Nothing stays the same.”
Everything changes. It is a phrase you hear a lot these days on Figueroa Street, where small businesses like Frank’s have been shutting down one after another. But the thing that becomes clear the more you speak to people at the center of the kind of change going on in a neighborhood like Highland Park right now is that it doesn’t just happen. It takes hard work by a network of people who hope to make a lot of money making this place change. People we’d like to introduce you to.
The ‘Retenanter’
“See this swap meet here?” asked Nicole Deflorian, pointing at an old brick building with a sign — HighlandSwapMall.Com — neatly spray-painted over the door. It’s a few doors down from Frank’s now-shuttered store.
She looked through the Swap Mall’s windows at a hodgepodge of kiosks selling underwear, cell phones, cheap jewelry. “I don’t know how they are still around and staying in business,” she said.
Nicole is a commercial real estate agent with Clint Lukens Realty and one of the many commercial agents who has marked Highland Park as her new territory in the last several months. She now spends considerable time in this neighborhood, staking out old buildings like the Swap Mall and old stores like Frank’s.
“This could be broken up into two or three cute boutiques,” she said, sizing up the Swap Mall building. “That’s probably going to happen soon.”
One of Nicole’s specialties is something called “retenanting.” Maybe you’ve never heard this word, but in commercial real estate it is a term of art, an actual job: find commercial buildings with low-rent tenants occupying storefronts, ideally on month-to-month leases, then “kick them out, retenant the property with new tenants at market rate,” Nicole explained.
Nicole admits this can sound predatory. “I do feel bad,” she said. “But it is a business. And when these people are paying under-market rents, and we have a client that owns the property, we have to look out for our client’s best interest.”
Actually finding those clients, the landlords she hopes to pitch her retenanting services to, can be difficult. Property owners are notoriously hard to reach, their identities obscured in property records by the company names under which they frequently operate. And it’s not like you can just go into a building and ask the current tenants how to reach their landlord. Often, they don’t want to tell you.
Nicole has developed a strategy for this.
“What I typically do is I go in, I see a store that’s like an old appliance store that’s not going to last for another year or so,” she explained. “So I try to figure out how to get in touch with the owner — like say that I got hit in the back parking lot and I need to call insurance, so I need the property owner’s information.”
It’s a trick Nicole learned from another commercial real estate agent years ago, she said. “Sometimes you have to get creative and kind of do whatever it takes get the information.”
Once Nicole obtains a property owner’s information, her pitch is pretty simple. She asks how much rent current tenants pay. In a long-disinvested neighborhood like Highland Park, it’s usually quite low. “Like $1.25 a square foot or something ridiculous,” she explained. At that point, she’ll say to the owner: “Well look, I have spaces across the street that I’m leasing for $2.50 a square foot. How does that sound?”
If all goes as planned, she said, out goes the old appliance shop, and in comes “a cool new fitness studio, or whatever.” And Nicole makes a nice commission.
