The building is located in DeKalb, IL, walking distance to Northern Illinois University. The last tenant was a Subway and after their departure it had sat vacant for well over a year. There was quite a bit of work that needed to be completed before a new tenant could occupy the space. The listing was obtained by Summers and was a forty-five minute drive from our Geneva office. I would be tenant representation while Summers was landlord rep. I work for clients. Summers works for building owner. After about six months we started to refer to it as the deal that wouldn't die.
We received two calls in the same week and I had scheduled two consecutive showings for a Thursday evening.
The first call, a partnership, who wanted to open their second location for a Hookah Lounge. They liked the space but the deal turned sour after negotiating pricing. It was a triple net deal and the taxes put them out of the money. Triple net - the tenant is responsible for their rent, taxes, insurance and Common Area Maintenance fees. My favorite form of leasing as the building owner has no hassle of paying monthly bills, has income from rents and builds equity. A very hands off and watch the cash come in approach.
Ten minutes after Hookah Guys saw the space, the next showing arrived on site. A successful man, Luis, who owned an accounting firm in Aurora, Il. Local businesses will come to him to run their books, ask for tax advisory, etc. He knew numbers. After seeing some great models for a niche brand of Mexican ice cream, "La Michoacana" he decided to give his own go at it. La Michoacana is a type of frozen fruit, popsicle bar that was hails from the Mexican state of Michoacán. They are starting to pop up everywhere and have been a hit in several cities.
He had decided that the space fit his need and we were going to move forward. Lease was signed with some provisions. We won several landlord improvements including resurfacing pavement, shuffling some walls around, lighting, painting exterior (bright pink).This is one of the most exciting parts of the deal but to provide as an indicator that a deal will close couldn't be further from the truth.
Obstacle Numero Uno.
The property needed a "grease trap." This is a device used in almost all cooking restaurants to so that excess grease does not go into drains. Think draining bacon grease down your sink x 500. The Subway was not using a grease trap (light cooking) so we were going to need one installed. This is a DeKalb County health issue and they were in the middle of passing a new ordinance - All restaurants must have at least a 1000 gallon grease trap. I almost fell over. Not only would the cost be in the neighborhood of $20,000, the landlord potentially would not approve it as the building was part of a bigger, master plan that would call for the demolition of this building in less than a decade. After getting the runaround several times over from the county I got the correct person on the phone. I explained to the man that a 1000 gallon grease trap for an ice cream shop is asinine and that we need approval for a 50 gallon grease trap. If not, this building would continue to sit for several years and then be demolished. We ended up getting our 50 gallon approval if we used a certain brand. No problem.
The bathroom debacle.
There were a men's and a woman's bathroom. Both conveniently located down a flight of stairs in the basement. The problem was that a bill with the title, "American Disability Act" (ADA) passed in 1990 (my birth year). Now, I have not read this whole bill as I am sure it is very long, similar to every other piece of governmental regulation. But somewhere in these pages it states that public restrooms must be accessible to someone with a wheelchair for example. This is where it got fun. Initially we tried to get it grandfathered in from Subway. Subway got to do it so should we. This was a "very much no." The City building dept. concluded that since Subway had vacated over 1 year ago the building needed to be brought up to present day standards. I tried the demolition line again to no avail. Our options 1) build new bathroom upstairs. That should read option. We had one option. Thought that this was the straw knowing landlord would not waste several thousand dollars building a bathroom only to tear the entire building down not-such-a-long time period.
I don't call it quits yet and have not yet told Luis the news. I call back eight days later to speak with my building inspector.
Gov't Employee: "He is not available"
Me: "When will he be available?"
GE: "I don't know"
Me: "What do you mean you don't know?!?!?"
No one in the county knew. After running around in several circles and a non-stop hour on the phones, I wondered if the Mayor may know what is going on.
From the Mayor: The entire building department was shut down and closed. They had realized that it would be more financially responsible to taxpayers if a 3rd party, private company performed their building duties. This was our chance. They would surely approve us, I thought. They did.
After a week or two of transition, I got the new guys on the phone, explained the situation and drafted an email to have it in writing. I got a verbal response and written email approval!!! I might have jumped and clapped a couple times after this.
We had received these larger issues approval and now needed the City of DeKalb. The first phone call was a quick, "Oh, that building. Did you ever fix that horrific roof leak?" Ouch.
After all of this we believed we were set. We had received all of the proper County and City approvals to open a new ice cream shop. This process took about eight months.
Move in commenced in September 2014. He realized that the sinks are not draining and the plumbing is shot. It required much more than a simple rod. He received an initial estimate. $15,000 for sewer repair, down the drain (cheap pun, I know). It took another 7-8 weeks to get everything situated and ready for a grand opening. They are currently open for business and I am quite happy for Luis and his new venture. The night before Thanksgiving, while attending a "Friendsgiving," I received a couple picture text messages from my friend Luis...
Honorable mention issues that did not get a paragraph: Mold remediation in basement, broken back door, client rupturing his intestine(!!!), client opening a second location mid-deal. 4-week attorney lease review.
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