Noe Valley Voice June 2003

Mikeytom's Struggle to Survive:
The Life and Times of a Convivial Grocery Hit with a Huge Rent Increase

By Corrie M. Anders

It's around noontime on a Tuesday in mid-May, and a half-dozen customers are shopping at Mikeytom Market, the little big grocery in Uptown Noe Valley. The sweet fragrance of fresh-baked cookies permeates the store, beating back the aroma from 10 bins of dark-roasted coffee beans bearing names like "Peruvian Vibrations" and "San Francisco Sunshine."

One of the shoppers is photographer Lisa Lefkowitz, who stops by Mikeytom nearly every workday to pick up a cup of coffee and a blueberry muffin. Today, the ritual is slightly different. She is also gettine a $6 bouquet of freshly cut flowers for her 24th Street studio.

The bright blooms belie the somewhat somber mood inside the market at the corner of Church and Day streets. At the checkout counter is a one-page flyer from owners Mike Meischke and Tom Maravilla (whose first names combine to provide the store's cutesy moniker). The flyer announces the unpleasant news that Mikeytom is facing a nearly tripled rent increase, and will close May 27 if the owners are unable to negotiate a new long-term lease with landlord Peter Kung.

"I'm very sad to hear they're going to be leaving," says Lefkowitz, a patron for the past three years.

Some customers have even stronger reactions. Next to the flyer is a petition that a loyal patron, a lawyer, is circulating. If Mikeytom leaves, the petition threatens a six-month boycott of any future business that leases the property.

"We want to take the profit motive out of closing Mikeytom down, if that is indeed [the landlord's] motive," says Daniel Mark Jackson, a 28th Street resident and an attorney with the federal Department of Labor, who organized the petition protest along with several other community members.

Jackson, 29, also has created a protest web site, He says he doesn't know how common the strategy is, or whether it will be successful. But there's no doubt about the group's motivation. "We like having Mikeytom as a business. We like the people working there, and we'll vote with our dollars," he says.

How did it come to this, that a popular grocery, with a community spirit and a convivial atmosphere that could have been lifted from the set of Cheers, is facing its second potential funeral?

Store Almost Sold in 2000

Maravilla well remembers when only a serious case of seller's remorse kept Mikeytom from closing. It was during the dot-com era, and Maravilla and Meischke were in escrow to sell the store they had opened in 1993.

But Mikeytom was the heart and soul of Maravilla's 25 years in the food and beverage business--and letting go was proving difficult. Then, a few fortuitous snags during final negotiations provided the partners with the opening to cancel the deal.

That was three summers ago. Given a reprieve, Maravilla and Meischke were convinced the grocery would remain a neighborhood presence for many years to come.

The optimism lasted until last month, when their 10-year lease expired. The deadline set off a frustrating race to win a new lease that would also save the jobs of a dozen or so employees.

In the event negotiations went nowhere, however, the two owners also looked at relocation possibilities. Maravilla toured the long vacant Star Bakery on Church Street a block away. The bakery needed lots of work, but had promise.

Creating a Neighborhood

Mikeytom Market was a hit from virtually the day the doors opened. It was a cross between a full-size grocery, like Safeway or Bell, and the ubiquitous corner markets peculiar to San Francisco.

It's easy to like Mikeytom. Natural light floods through three skylights on the roof of the one-story building. The store is stocked with organic and gourmet foods; the works of neighborhood artists adorn the walls; and the long counter upfront serves as both a gathering spot for locals and an informal drop-off for packages. And, of course, Mikeytom offers a caffeine fix.

"You can get your FedEx and a latte," says Maravilla, laughing.

Then there is the intangible of goodwill and community. "We created a neighborhood where there wasn't one before," says Maravilla. In Mikeytom's first year, the market was the catalyst for inaugurating a street fair. On a sunshine-kissed day, businesses along the outer Church Street strip put out their wares, and the venerable Drewes Meat Market performed barbecue magic.

"It was wonderful to see the whole neighborhood come out. That had never happened," says Maravilla. "That's when we knew we had a community."

Meischke, 50, is a bit shy, and he prefers to let the outgoing Maravilla, 47, serve as Mikeytom's public persona. Meischke runs the daytime operations, while Maravilla, who works fulltime for Stanford University's alumni association, has night and weekend duties.

The two are more than business partners. They've been together for 17 years. Their union was state-sanctioned in 1995 when Mayor Willie Brown married them during a mass gay wedding.

Rent Raised from $3,000 to $7,500

According to Maravilla, three months before their lease was to expire, he and Meischke wrote Kung asking for a minimum five-year lease. Kung's response, dated March 28, offered them a month-to-month lease at a revised rent of $7,500--considerably above their current $2,968-a-month payments.

Maravilla was not happy. "I can't operate a business on a month-to-month lease," he says, and, in any event, an extra $60,000 in annual rent payments would make the business "not viable."

Their initial rent a decade ago was $2,000. That was a time when San Francisco's commercial real estate market was in a terrible slump, and the $2,000 represented a good deal for both sides. It helped ease the financial strain for the startup entrepreneurs, and Kung got tenants to fill a building that had been vacant more than eight years.

Maravilla says the building, constructed in 1935, was "a dump" in need of major improvements. "We gutted it and put in all new electrical and all new plumbing, and of course all new equipment," he says. "We put almost $100,000 into Mikeytom.

"The landlord didn't put in a penny," he maintains. "That why it's very frustrating" to be denied a new long-term lease.

A Sweetheart Deal

San Francisco attorney Peter Peterson, who represents Kung, has a different take on the situation. He believes the grocers want to sell the business, which would be extremely difficult to do without a multi-year lease, and that they are "trying to pressure him [Kung] into this deal.

"They tried to sell the business a couple of years ago," Peterson says. "That's the only reason they're looking for a long-term lease."

Peterson stresses that the landlord is only looking for a fair deal. "He is not evicting them. They've had a sweetheart deal for the last 10 years, and Mr. Kung is just asking for market rent for the property."

So, what is the market rent?

Real estate agent Jim Appenrodt has been a fixture in the neighborhood for two decades, working out of Laurel Realty at the corner of Church and 29th streets.

Appenrodt says commercial rents today along Church Street run about $2 a square foot for midsize buildings such as Mikeytom's, which contains 2,400 square feet. That would suggest a current rent of around $5,000 a month for the Mikeytom space.

A lease at $5,000 a month, good for five years, with an option to renew for another five years, is one "I'd take in a heartbeat," says Maravilla.

Where Everybody Knows Your Name

Mikeytom's vibrant, community-oriented personality comes from its employees. An average of 600 customers a day walk through the door, and the employees are on a first-name basis with many of them. They chat with them about their children and neighborhood happenings, and keep up a stream of running gags and stories.

"We know the names of hundreds of people," says cashier Heidi Anderson, who's been a "Mikeytomee" for three years. "We see people crossing the street, and we already have their lattes made" by the time they arrive.

One daily customer named Adam always orders a bagel with cream cheese and an extra-tall, nonfat single latte, "which is strange," says Anderson, "because there's hardly any caffeine in it." The drink became known as the "Adam Special."

During one unusual period, the customer didn't show up for a week. Then Anderson says a woman she didn't know walked in and ordered the identical latte. "I turned to the barrista and ordered the 'Adam Special.'" Surprised, the woman asked Anderson, "How do you know my husband?" Then everyone laughed. Working at Mikeytom is "the closest thing to living in a sitcom I can think of," says Anderson.

The camaraderie is one reason Anderson says "customer anger [about Mikeytom's potential closing] is a thousand times higher than what we've been going through. Their anger is just incredible."

Hope Fades for New Lease

Eight days before D-day, several employees have been dropped from the payroll, and Meischke is multitasking. He answers the phones, helps man the cash register, and pours over paperwork.

"I'm exhausted and I can't hire anyone," says Meischke. But the drive remains strong to keep Mikeytom a going concern.

The next day, Maravilla walks through the old Star Bakery site at 29th and Church, at the invitation of the property owner. The bakery is still vacant after three years because several rumored deals to sign up a restaurant operator have fallen through.

The $5,000 a month rent is a plus, but the two-story building is not ideal. It has low ceilings, no basement for storage, and residents live on the top floor. While it has about the same amount of space as Mikeytom's, the building is "in very rough shape," Maravilla says, and would require major improvements.

Bottom line: "It's not conducive for picking [Mikeytom] up and plunking it right down" at the bakery, says Maravilla.

With only a few hours before the deadline, Maravilla and Meischke acknowledge they are out of immediate options. They don't have a new lease, and they don't have a new location.

"It is fini," says Maravilla.

It was Maravilla who locked the doors of Mikeytom Market for the last time.