“Look, this is not about economics. We don’t know who you people are!”
Many years ago, after God had tossed the sun in the sky; after Noah did his 2×2; after Moses and the Red Sea, and just after I had almost got out of the wilderness I started, actually bought my first business. It was me and a friend of mine. I’m going to have to save his name for the book. Don’t want to put him out there like that since it’s been a minute (a couple of years) since we chatted. I’ll keep this kinda short. Some of you have heard me tell this before.
We bought a restaurant, El Parador Restaurant & Cantina. It was located in the last shopping center on Oakland before it turns into Preston Rd, on the right-hand side of the road. If you’re familiar with Dallas you know exactly where I’m talking about, just before you get to Highland Park. One of our regular customers who had frequented the restaurant before we took over appreciated the irony: two black guys bought a Mexican restaurant from an Iranian guy in Highland Park. You don’t have to be from Dallas to appreciate how absolutely insanely funny that is and you don’t even have to know that Highland Park is lily-white to get the joke.
I’m not going to give a lotta the back story, again I will save that for the book. The acquisition was a turnaround situation. The seller wanted to walk away from the restaurant and only wanted us to pay is IRS back taxes, which were really a lot of money. We negotiated this amazing deal. I structured this “assume operations” with no money down, begin operations under our name; we keep all that we earned about close the transaction some months later. The seller wasn’t a total stranger to my partner so there was trust there but still what a helluva deal for us and a what a learning opportunity when I/we were young.
I had the job of putting together the financing to close the acquisition and managing the day to financials of the restaurant, of course. My partner was responsible for marketing & staff. We both were responsible for the day-to-day.
We started with cash in the register at the close of business one night. It was probably like $300. Neither one of us had more than $1.50 in the bank. We both had financial backgrounds so we figured out how to make it work. We bought what we needed for lunch outta the register money and bought what we needed for the dinner crowd from what we made at lunch. We did that for a couple of days. My partner, who is a helluva sales/marketing person but together some brilliant marketing. Within a couple of weeks, we had gone from total daily sales of about $500-600 to about $1500. He packed them in with some, like I said, brilliant marketing.
The rent was only $700 per month. When we started, we had no idea how we would make that work but after a month of operations, it was easy.
There’s a lotta great stuff to this story but let me get to the point.
One of the conditions for us to secure the funding to complete the acquisition was to get an extension of the lease. When we started, we had 6 months left on the lease. Our investors wanted us to get a 2-3-year extension so we would have time to build the business/clientele then move if we needed to. We begin “negotiating” with the landlord within about a month after we knew we had more than a solid business plan, we had a solid business.
Our initial offer was to renew and extend with a little escalation of the current rent and escalation after each of the years, on a 3-year deal. The landlord came back with a NO!. No counter, just a NO. I and my partner called ourselves businesspeople so we thought we were doing the “business” thing, so we sent another offer.
After about 3 months of timely paying the rent, never late and being good neighbors to the other tenants in the shopping center and continuing to build our business we decided to protect what we have built and we offered to double the rent to $1400 per month. That offer came back NO. No counteroffer, just a NO.
Our investment source included a lawyer, accountants, and other entrepreneurs so they were a good resource for us to bounce things off of. Since we were early in the game, we did just that, bounced things off of them. After we got the rejection of our “double the rent” offer, we huddle with them to see what our next steps should be. The lawyer advised us to call a meeting with the landlord, which he would attend and just negotiate the lease extension face to face. That’s what we did.
The meeting was at the landlord’s office. I don’t know if that was good or bad, it just was what it was. We felt good about what we were doing. We were prepared to offer triple the rent, from $700 per month to $2100 per month. We had done a great job building the business and traffic. Our business base was a very, very diverse clientele. Our frequent customers included the sales team and maintenance teams from the Park Place dealerships. They were kind of across the street from us; This was before they moved to Lemmon. I tried to tell you it was a long time ago. We were also honored to count Gene Street, yelp the founder of The Black-eyed Pea not only as a client but also as a cheerleader for us. His offices were again, across the street.
Back to the meeting. We get to the conference and repeat our desire to renew and extend the lease. We tell the landlord’s rep that we were willing to increase the monthly rent to $2100 per month. And that’s when he gave us the line that I will never forget, “this is not about economics. We don’t know who you people are!”
They refused to renew the lease, under any circumstances. That was a business opportunity that taught us a lot but was never fully realized. What I/we learned, “yes we can!”
I tell this story when people get confused about how some people view people of color. This article is a perfect example of the misconception that because you pay or because you can contribute some economic benefit or because your efforts can make somebody richer that your contribution matters or counts. In a lot of cases, in many cases, it doesn’t matter. A bigot is a bigot.
“It’s not about economics.”