ST. PETERS • For 23 years, the Yi family's restaurant has been a fixture near the busy intersection of Mexico Road and Mid Rivers Mall Drive. While other businesses came and went, the family endured in the competitive restaurant business, steadily building a customer base.
Now, however, the family faces upheaval. A few weeks ago, the Yis and the owners of 11 other small businesses in the foreclosed Golden Triangle strip mall were abruptly ordered to move out by the end of February to make way for a CVS pharmacy to be built in its place.
"They invested their whole life in this," said Sarah Yi, who manages the restaurant, called Crazy Sushi since 2003, for her parents. "We feel it's unfair. Just to have it taken away one day like this. I see my mom cry every day."
The directive from Providence Bank, which foreclosed on the strip mall's landlord, has spurred a scramble by the businesses to find new locations. Providence's president, Brett Burri, said the bank was trying to work with the tenants.
"We've been trying to appease them," he said. "It's a difficult situation that none of us want to be in."
The issue illustrates how the rough commercial real estate climate can affect tenants operating small businesses, who are often unaware how a delinquent landlord can suddenly mean onerous relocation costs and disrupted business.
The turn of events has put Mayor Len Pagano in a predicament. While he welcomes a nationwide retailer and sales tax generator such as CVS, he's concerned about the current businesses.
He wants them to stay in St. Peters and has contacted CVS to try to obtain more time to line up new locations.
"These people need to be protected," he said.
At a planning and zoning commission meeting on CVS' site plan Wednesday night, Alderman Jerry Hollingsworth criticized the bank for not giving tenants more time.
"You've failed our community miserably," said Hollingsworth, who also serves on the commission. "You're killing small business."
Some businesses want Providence to pay part of their relocation expenses. Yi said her family was seeking $10,000, twice what the bank has offered.
Among other tenants are a beauty salon, a florist, a printing service, a bar-restaurant, a sign business, a pawn shop, a chiropractor, an accounting firm, a tax service, a store that sells lingerie and other adult items and a self-described alternative smoke shop.
About 18 percent of the 26,340-square-foot building is vacant. The building has four vacant units; three formerly housed one store, neighbors say.
The average vacancy rate for strip centers in central St. Charles County — taking in St. Peters and nearby areas — is about 17 percent, said Ed Schuttenberg, research manager for CBRE, a commercial real estate brokerage. That indicates that space relatively close to Golden Triangle is available.
Burri said the bank was providing some rent abatement. He didn't provide details, but some tenants said they'd been freed from paying rent through February. He also said the businesses' departure date was 'somewhat negotiable."
Sherry Gibson, owner of 11-year tenant Gibson Printing, estimated that she would spend $50,000 on relocating, including moving her printing equipment and improving a new location.
She said the bank had rejected her proposal that it buy out the remainder of her four-year lease.
A few doors down, Karen Conant said it will cost more than $100,000 to move her Mexico Road Florist, which has been in the center 26 years.
"I'm absolutely devastated," she said.
Some tenants, like Conant and Gibson, operate only at the center while others have several locations.
Jeff Collier, vice president of FASTSIGNS, said the business also has branches in Creve Coeur, south St. Louis County and Brentwood. He estimated that moving would cost at least $75,000.
Another multiple-location business is Liberty Tax Service. Bruce Thompson, who heads eight St. Louis area franchises, said the requirement to move is "a huge inconvenience" — especially because income tax season is approaching.
He added, however, that bank officials are "being somewhat generous" because they're negotiating with each tenant.
The center formerly was owned by Owen and Sons Development Co. of St. Peters. The firm's owners could not be reached for comment.
Burri said the loan was originated by Premier Bank, which was seized by federal regulators last October and sold to Providence. After the sale, the default occurred and a Providence subsidiary, PBSP Holdings, became the owner.
"Regulators do not allow us to hold property for a long time," Burri said. "The best alternative we were able to find was CVS. They wanted the property vacant. Through that process we have been trying to make the move as soon as possible."
Some tenants said they feel misled because they received a letter dated April 14 stating that the terms of their leases would be honored pursuant to federal law. The letter was from a company hired to manage the center at the time by PBSP.
Because of the letter, Eclips Salon owner Dawn Libbert said, "we thought we were locked in" to the leases and lacked the flexibility to begin scouting other sites on their own timetables.
Burri said that the April letter had "erroneous information" and that the federal law referred to didn't apply to commercial tenants.
A CVS spokesman, Michael DeAngelis, said in an email that CVS expected to close on the property by April 1. But he said the company didn't control it now "nor do we control the time frame that the bank gave its tenants."
He said the chain, which has rapidly expanded its presence in the St. Louis area in recent years, expected to open in the second half of next year but hadn't set a date.
Dr. Todd Just, the chiropractor at the center, said he wouldn't be affected as much as the other businesses who depend on street traffic for some of their customers. He said he believed his patients would move with him to whatever new location he decides on.
"We'll be able to absorb whatever cost we have," he said. "To me, time is the biggest deal."