Businesses Hit by Pandemic Seek Landlord Concessions

Photo courtesy Rachele Rivera
Before the coronavirus pandemic, Rachele Rivera’s fitness studio Fitness is Art offered intense workout classes to clients. But after health orders required its closure, she found herself unable to make rent or strike a deal with her landlord.

A few months ago, Rachele Rivera was successfully running her business, a Burbank workout studio named Fitness is Art.
But then the pandemic hit, forcing gyms across the state to shutter. Now, Rivera is taking a cross-country road trip to Florida, where she plans to stay with family. As she drives through the United States with her two Pomeranians, the rent on her studio continues to pile up.
“The pandemic was stressful enough, obviously,” she said in a recent phone interview.
Rivera tried to persuade her landlord to decrease her rent when it appeared — briefly — that gyms could reopen in June. Many of her clients became unemployed due to the COVID-19 pandemic, she told him, and she wasn’t making enough money from online classes to pay him the full $3,800 a month she owed.

He refused. Rivera was told she didn’t have to pay him back all at once, she recalls, but he wanted all of her rent to be paid by the end of the year. If she didn’t, Rivera said the landlord told her, he would sue.
A citywide eviction moratorium protects residential and commercial renters affected by the pandemic from being kicked out of their buildings, and in late July the Burbank City Council approved a measure pushing the rent repayment deadline to six months after the moratorium ends — but it did not require landlords to forgive their tenants’ rent.
Rivera said she knows her landlord has to pay his mortgage, but she fears cautious clients won’t return to her studio even after she is able to open her doors again. And, she added, she can’t afford to meet the price set by her landlord to get out of her lease.
“Literally, we lost everything,” she said. “We lost everything.”

FEW RESOURCES AVAILABLE

Rivera isn’t alone. Assemblywoman Laura Friedman, whose district includes Burbank, said her office has heard reports from small business owners whose incomes have been throttled that they are facing hard-line stances from their landlords — including unlawful evictions. And without the deep pockets available to corporations, which can better weather the economic drought or pursue legal action, many of these owners fear their doors will never open again.
“Even if they survive right now, they’re going to find recovery very difficult,” Friedman said in a phone interview.
Rivera said her landlord, who didn’t respond to requests for comment, didn’t try to evict her. But not all business owners have kept their facilities. Kataneh Hamidi, who also owns a fitness center — Phenom Athletics — in Burbank, said her landlord filed a notice of belief of abandonment against her, changing the lock to her gym after she asked him to decrease the rent.
“As a normal empathetic human being, [lowering the rent is] what you do, but he didn’t want to work anything out,” she said in a phone interview.
Hamidi said she has considered pursuing legal action against the landlord over the matter, but isn’t sure what help it could provide.
Her landlord, Burbank resident Harry Bieker, describes the situation differently, saying Hamidi was selling gym equipment while her facility was shut down — but refused to pay rent. He also said he filed the notice against her after losing four months’ rent and utilities, and after she had emptied the building.
Bieker also took aim at the Burbank City Council and the state for their eviction moratoriums, which he believes has allowed opportunists to take advantage of property owners. Landlords, he said, are still beholden to banks, mortgages and insurance payments, yet have not had their expenses deferred or waived.
“It’s a huge overhead that people just don’t realize, and if you’re not a property owner, I could see where you’d think ‘Oh, those nasty landlords making all this money,’” he said in a phone interview. “But the fact is that’s a business. … They’ve had to pay the bills in thick and thin.”
Hamidi denied Bieker’s claims, saying she told him she was not abandoning the property, and was making nowhere near enough money selling her equipment to pay the rent she owed.
What has made finding recourse more difficult is a seeming lack of resources for commercial tenants. Hamidi has reached out to Burbank’s Landlord-Tenant Commission and Housing Authority, but didn’t get much aid. Most help is instead offered to residential renters affected by the pandemic, she said.
Hamidi, who also rents a second property in North Hollywood and is herself a landlord, said she does believe the majority of landlords have showed understanding toward their tenants. Her landlord there has been working with her, agreeing to a payment plan and even allowing her to open an outdoor gym in the parking lot.
But she also knows of a handful of gyms that have closed down because they haven’t been able to make rent payments.
“There needs to be a little bit more empathy toward small business owners,” she said.

LOCAL OPTIONS PROPOSED

Friedman highlighted a few resources available to commercial tenants, primarily federal and state loan programs, about which her office provides information. But she acknowledged that there are no efforts to help commercial renters currently proceeding on the state level, with the California Legislature entering recess after the end of August.
Friedman said she’s been pushing Gov. Gavin Newsom to call legislators into a special session to keep working on bills past that deadline, but also pointed out that Burbank could provide its own protections.
“A lot of these businesses give Burbank [its] unique feeling,” she said. “[Residents] want their independent bookstore, they want their antique store.”
After approving the rent deferment measure, the City Council recently tried to help owners of fitness studios by authorizing Burbank’s Parks and Recreation Department to permit owners to use baseball fields for outdoor classes.
But Rivera and Hamidi said this option, while helpful to some, won’t be much of a boon to gyms with heavy equipment that would need to be hauled from the building to the outfield.
So for now, Rivera continues her cross-country drive, hoping to either find a job in Florida or promote her online fitness classes. But, as she’s charging only $10 a class, she’s not too optimistic about the latter option.
While at a rest stop, she lamented in a phone call that, before the pandemic, she had always paid her rent on time. Now she can’t pay it at all, nor can she afford a bankruptcy attorney.
“I’m kind of stuck,” she said. “I don’t know what to do.”

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