San Loco Struggles

Jill Hing's brothers opened the San Loco taco joint in the East Village in 1986. A year later, Jill followed her brothers, moving to New York City from rural Nebraska. She soon joined the business. San Loco has been a Lower East Side staple ever since. On a personal note, I've been living off their tacos for half my life.

Recently, Jill got in touch to talk about the struggles of running a small business in the city today. "We have been feeling unbelievable pressure caused by the increased cost of doing business for quite a few years now," she wrote. "At this point, we are not sure how much longer we can hang on."

I asked Jill a few questions about San Loco's struggles in a rigged system where small businesses get the shaft--while big national chains get preferential rents from landlords, higher property values from banks, and corporate welfare from City Hall.



Q: What's been the biggest struggle to San Loco's survival these days?

A: There are many factors that contribute to our struggle to survive--and the noose definitely keeps tightening. Our customer base has been mostly squeezed out of this neighborhood as a consequence of hyper-gentrification. Rent is a constant source of stress. In our case, as with many long-standing businesses, we are at the mercy of the landlord and live in fear of our next rent renewal.

They can raise your rent exponentially to just force you out, or they can charge you above market because they know moving is not a viable option. For example, one of our location's lease is up in the spring, we have been tenants there for 20 years, but still they are asking about 15-20% above the comps around us because they know moving is expensive, disruptive, and can cost us our liquor license (although San Loco obtained the liquor license it stays with the address). And regardless of our good standing with the community board, we could be denied a new license, or most likely, be given one with limitations. There are moratoriums on most blocks now because of the over saturation of restaurants/bars in the neighborhood.

It makes me furious that landlords are able to manipulate the market and falsely inflate property values this way. Once we even had a landlord ask for a percentage of our revenue as part of our lease.

The other contributing factor is that the increased cost of doing business has gone through the roof. Some costs: Seamless has cornered the market with on-line ordering and they keep raising their percentage, they take 17-20% now, which is higher than our profit margin. Our blue collar lunch crowd dwindled when the cost of parking more than tripled. Our purveyor costs went up when parking tickets more than doubled. Yelp touts themselves as unbiased, but they aggressively try to force you to “advertise” with them, which includes manipulating reviews (good ones come to the top, bad ones go to the bottom).

Q: How has that changed in recent years?

A: While many of our old-school customers have moved out, the ones that remain are loyal to the death. We love them and are so grateful for their loyalty, but we also want to appeal to the new influx of people in the neighborhood. Because we are inexpensive, we have always been reliant on volume.

I’ve noticed that going out to dinner doesn’t really happen organically anymore, nobody just walks into a place to check it out and try it for themselves, they have to google it first to be told what to expect and if they’re going to like it. The nightlife has definitely changed as well. Our neighborhood has more professionals and students now. People aren’t out roaming the streets and leaving shows at 3 a.m. anymore.

Q: Did it used to be easier to run a small business in the city--and why?

A: Much easier. The regulations and restrictions end up costing so much money that it's almost cost prohibitive to open a business for people like us. Little hole in the wall places could open and survive in years past because the cost of doing business wasn’t so crushing, and getting started wasn’t so daunting. You could just work hard and go for it.

Q: How do you think the increase in chain stores has affected your business?

A: People seem to want to know what to expect, they aren’t looking for a surprise or an adventure, and they don’t want to be part of your weird world, they are looking for sameness. New York has lost so much of its character, it seems that we have sold our soul to the highest bidder (I think largely due to Bloomberg), and it makes me sad to say, but I think NYC has lost the plot.



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