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Little Havana’s small businesses are at risk of disappearing

Small businesses in Little Havana are at risk of disappearing

Rising rent and high demand for real estate in the area have put Little Havana businesses in jeopardy.
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Rising rent and high demand for real estate in the area have put Little Havana businesses in jeopardy.

A number of small businesses that have shaped Miami's iconic Little Havana neighborhood — with a string of tiny cafes, restaurants, souvenir and cigar shops along Calle Ocho — are in danger of disappearing.

Rising rents and the growing demand for real estate in the area have put business owners in a bind. Some have already been forced to close, and others fear the same fate.

“This is a family business in which we invest our health, sweat and a lot of money. We built this place, from the plumbing to the grease traps,” said Laura Espinosa, a Colombia native who owns LeKoke, a small restaurant at 1225 SW Eighth St., just steps away from the renowned Maximo Gomez Park, better known as the Domino Park, and the Walk of Fame, a stretch of sidewalk lined with celebrity stars.

Espinosa and husband Ronald Torres are fighting to keep the restaurant at the strip mall where it opened four years ago. But the building was sold in 2015, and the couple said the new owner wants all tenants to leave.

“He wants to turn Little Havana into another Brickell,” said Espinosa, adding that an ice cream shop in the same mall was forced to close and its owner “lost everything.”

Building owner Marcos Lapciuc said he bought the property in bankruptcy court and is spending $2 million to renovate it. He wants to make the strip mall “look very Little Havana,” he said.

“Right now it looks like a dump,” said Lapciuc, adding that the area has “unseen problems,” including crime and drugs.

Lapciuc insisted that he wants to preserve the neighborhood and wants to keep his strip mall “with the charm of Little Havana, which are the small businesses.”

But he added that the monthly rent for LeKoke, which has a base rent of $2,083 plus sales tax, amounts to $10.77 per square foot even though his costs, including taxes and insurance, adds up to about $10 per square foot.

“Therefore, their effective rent is 77 cents per square foot or basically free rent,” he said.

The average cost to rent business space in Miami-Dade is $30 to $35 per square foot, he said. The price goes up to about $80 in the Brickell area and spikes to about $200 in Miami Beach, he said.

Meanwhile, experts said that Little Havana could soon become unrecognizable unless an urgent preservation plan is put in place.

A proposal to permit taller buildings sparked controversy when it was submitted to the municipal government in 2015. Neighbors and activists opposed it, arguing that the developments would drive out poor residents and destroy the architectural legacy from the early 20th Century. An estimated 70,000 people live in the neighborhood, the most populated in Miami.

That same year, the National Trust for Historic Preservation included Little Havana in its list of National Treasures and most threatened communities, in an effort to protect it from the rapid urban development changing other parts of Miami.

The Miami City Commission withdrew the controversial proposal in January and agreed to follow a preservation plan being drafted by the National Trust for Historic Preservation together with the Dade Heritage Trust and Plusurbia Design, an urban development and planning consultancy.

The plan is expected to be ready later this year, hopefully before the elections in November, said Christine Rupp, executive director of Dade Heritage Trust.

But that may be too late for some businesses, like LeKoke.

Espinosa said the family has been “tormented” since the new owner took over.

The owner “allowed the mall to deteriorate, and the parking lot was full of weeds,” Espinosa said. “In 2005 they fixed the roof but they didn't warn us and left us open to the weather for several days. One time we had a big event, they cut our water.”

Those problems cost the family a lot of money, she said.

LeKoke and West Brickell Properties are now fighting in a Miami-Dade Court. Espinosa and her husband want to renew their lease, which expired in January. But they have not been able to do so, and the Ocean Bank account where they usually deposited their rent payments was blocked, Espinosa said.

The attorney representing LeKoke, Barbara Cass, said that after months of court battles, the restaurant owners were allowed to deposit their rent payments with the court. “At least that will allow them to stay in the same place,” she said.

“It's an unfortunate situation,” Cass said. “They are getting all these people out of there and trying to change Little Havana.”

But according to the landlord, the owners of LeKoke were supposed to give him a six-month notice if they wanted to renew the lease.

Lapciuc insisted he “would be happy to sit down” with them to reach an agreement but said that instead of working with him the tenants have been “intransigent.”

Rupp said the harsh reality is that as property values in Miami rise, owners raise the rent and small businesses that cannot afford the new prices are forced to move out.

“The reason that Calle Ocho is Calle Ocho is those little businesses,” she said. “No one wants another Pizza Hut in Little Havana.”

The future of LeKoke and other small businesses remains uncertain, as well as the future look of Little Havana because no regulations or design parameters have been put in place for the neighborhood, experts said.

When a neighborhood is designated as historic, “what comes with designation are design guidelines,” Rupp said. But if an area is not designated, all decisions are based on city codes.

The plan being drafted for Little Havana “is simply a recommendation,” Rupp said.

“But if the city is interested in preservation, affordability and protecting the neighborhood from gentrification, they should look at this plan,” she said. “Hopefully this would be a road map for the future of Little Havana.”

Follow Abel Fernandez on Twitter: @abelfglez

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