How flexible rental arrangements can save a restaurant

Nicola Blaque owns Caribbean restaurants The Jerk Shack and Mi Roti in San Antonio, Texas. Its third restaurant will debut next year inside Hemisfair, a park run by a nonprofit organization offering local business owners restored homes with flexible rental contracts.

I had a restaurant about five miles from Hemisfair, and it wasn’t on the best side of town. I moved to San Antonio in 2014, and went to culinary school, so I wasn’t the most familiar with the city’s demographics and crime. When I signed the lease for my first location, I saw nothing wrong. I was too busy working. I have a military background, so you overlook some things. Nothing can be as bad as being in Iraq or Afghanistan.

Then, once I was in business, I was like, “Oh, my God, nobody’s coming here after five o’clock.” My whole business for the first two years was like that. I couldn’t open after five because certain things were happening in the neighborhood and around us. I didn’t feel the safest – nor did my employees – on weekends. I had a food truck that I would park there, and one day I walked in, and all the windows in my food truck were smashed, and they stole my generator. It really hampered my business on the way to grow.

In 2019 and 2020, I was listed as one of America’s Best Restaurants, and so if I wanted to continue my business, I really needed to figure that out. I couldn’t stay there. I was looking for a place when I got the call from Hemisfair. They said, “We are expanding the park and we would like you to look into an opportunity.

That was before I opened Mi Roti at the Pearl and my last Jerk Shack. I was still new to the game, and I wasn’t quite sure. I actually dealt with a real estate broker, and they helped me put together my case on why we thought Jerk Shack would fit in a space like this. One of our main reasons was simply to move to a safer location and give customers who were already visiting us more hours, a safer environment and allow us to expand the menu. I get a lot of clients from downtown colleges and the military, and just wanted to be in a better part of downtown.

Unfortunately, the first offer we made was not accepted. I would say almost a year later, they said there was another bid coming, and we had the opportunity to resubmit, and we actually won that bid. They really liked our story and where we’re from, and they’ve also eaten at the Jerk Shack many times.

Since the supply and all that stuff took longer, I opened another Jerk Shack about 90 days ago on the other side of town. Originally, it was to replace the first location. I was still in this situation where I needed to come up with a plan ASAP to get out of there.

A broadcast of The Jerk Shack in San Antonio. Pictured: Jason Risner.

I ended up doing a brand new build on a site near SeaWorld. With my lease at our new restaurant, it’s a fixed base rent and then various fees. From the moment of construction, I knew when I would start paying rent and what that amount would be. With Hemisfair, they cannot give you money for tenant improvement because they are non-profit. What they can do is a rent reduction, which means they can either not pay rent until you make a certain amount of sales – which would equal the leasehold improvement dollars – or they can reduce the rent until you reach a certain point, then you would start paying rent. So we went with a mix of both. We are not going to pay rent for a certain period of time, then when we get to another point it will be reduced. All this is to help with the construction, since all these costs are going to be my responsibility.

Because of what has happened to restaurants during the pandemic, these types of leases also make the restaurant feel safe. I think those other more traditional deals where rent is due during that time, and at that rate, that’s why a lot of restaurants are closing. If they were with an owner who had a non-traditional deal, probably from the start, they would have understood what the restaurants were going through.

This place now that we’re open, it’s longer hours, it’s the biggest menu, and it kind of changed what I had planned for Hemisfair. Part of what I’ve always wanted to do, but wasn’t sure how to present Caribbean cuisine in a higher light, not so much general comfort street food. I think it can almost mimic something like a Caribbean steakhouse. We will have apps, we will have main courses and side dishes. I look at the other restaurants that are there in the park. Dough is more like high end pizza, then we have Box Street Social, and they are more like high end brunch. So I want to fit the theme that I think Hemisfair is aiming for, which is a nice place for locals to have a good time and possibly go out in the evening or enjoy a nice place at noon.

I’m leaning towards raising that price. I need a higher ticket. Employees are no longer the same dollar. And I agree with them. Things in life are no longer the same. When I had my son two years ago Pampers what Pampers cost now with my daughter are two different prices. So if I can see the changes happening in the world, of course my employees feel it. I need to be able to make more money just from selling food and drink so I can provide more money to my employees.

I can say that I am very lucky. Among the women-owned businesses in town, I have two restaurants in two of the city’s most desirable neighborhoods. It’s very hard, sometimes I feel like I’m working ten times harder than the others. Specifically, male companies probably don’t have to work as hard. If I’m with my male bosses, people automatically assume the businesses are theirs and not mine. I have hurdles like this that I jump every day.

Hemisfair decided to partner with me and say, “Hey, we’re supporting this woman-owned business, and allowing her to be in a space where millions of eyes are going to be on her regularly.” They provide opportunities that would not normally come to me.

When I started with this, I didn’t aim to be in the best places or make the most money. My goal was to spread the best chicken in San Antonio and hopefully Texas. That was the only goal I had, and so with that came all these other wonderful things.

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