About a month ago I sent out a letter explaining that Yoga Desaâ€™s closure may be permanent due to the COVID crisis. Well, itâ€™s official, Yoga Desa has closed. In this letter, I will share with you details of whatâ€™s transpired. Many of you responded with questions, suggestions, and well wishes. It humbles me to know how beloved Yoga Desa is in our community. I received so many emails I literally couldnâ€™t respond to them all. Many brought tears to my eyes. Hopefully, this letter will answer some of your questions. If you are interested, read on.
The most common question was, â€śWhy donâ€™t you do a fundraiser or GoFundMe campaign?â€ť Iâ€™ll speak to that first. I cannot in good faith accept donations from the community to pay for a situation that is ultimately beyond my control. It would add insult to injury if I accepted financial help only to fail a few months down the road due to a severe decrease in attendance or another shutdown imposed by local or state government. Even under the best-case scenario, I believe it would take many months before attendance is near where it was before. My guess is it will take even longer to replace the evening and weekend workshops and specialty classes. Even before the COVID crisis, Yoga Desa was struggling with the 45% rent increase imposed by the new owners last September. I wasnâ€™t certain Yoga Desa would be profitable in 2020. Those of you who come to Desa know we had several well-attended classes, but most are just a few students. Small classes are what made Yoga Desa intimate and appealing to many of you, but it makes it challenging financially. The rent increase wiped out 70% of our income, so even without COVID, Yoga Desa was in unchartered waters.
The next question many of you asked was â€śWhy donâ€™t you renegotiate your lease?â€ť Short answer, I tried. My first offer was â€śdeclined immediately,â€ť ownership found it too aggressive. The landlord insisted I renew my option as a condition of any negotiation, which included a personal guarantee and an additional 5% increase in rent. For that, they offered a base rent abatement for July and August (basically a 75% decrease in rent for two months while we would be closed), with the stipulation I pay it back in the event of a default. Many of you probably donâ€™t know my background is in commercial real estate. I owned and operated a real estate company for 15 years, so I know what a good (and bad) deal is. Thereâ€™s no way I can sign a contract personally guaranteeing nearly $60,000 in rent under these circumstances. I was also not comfortable paying an additional rent increase, I found it highly inappropriate given the current situation. However, after some soul searching, I told them I would accept the terms they wanted except for the personal guarantee and the increase in rent. But no response from the landlord, and after Californiaâ€™s governor re-closed all restaurants and bars, I retracted the offer and told the landlord I intended to move out. As of today, I have still not received a reply. Clearly, there is no legitimate interest from the landlord in keeping Yoga Desa, and frankly, I wasnâ€™t feeling good about being there. Iâ€™m hoping that a space will manifest in the coming months where I can rebirth the studio once life in the COVID era resumes some normalcy.
Some of the biggest confusion for many of you is â€śwho actually owns Pine Tree Circle?â€ť The gossip and misinformation Iâ€™ve heard on the street is all over the place. So hereâ€™s a short summary so you know the facts. The Pine Tree Circle is now owned by the Daneshgar family through one of their many LLCâ€™s. The patriarch of the family, Joseph Daneshgar, is a principal of 3D Investments, LLC, one of the largest private property owners in the region, if not country. Mr. Daneshgar has children and itâ€™s apparent heâ€™s raising and teaching them to take over the family business. Mr. Daneshgarâ€™s organization purchased Pine Tree Circle in September of 2018. The face of the centerâ€™s management is Mr. Daneshgarâ€™s son, Nathan, a recent college grad. Presumably, this is one of the properties Nathan is cutting his teeth on as he learns the family business. Nathanâ€™s older brother, Adam, runs Langdon Street Capital (www.langdonstreetcap.com) along with his less old brother Andrew. Itâ€™s a significant and growing portfolio including the Grand Central Market complex in downtown Los Angeles. If Nathan behaves, as Iâ€™m sure he will, I trust he will control a similar portfolio by the time heâ€™s his oldest brotherâ€™s age.
Please understand Iâ€™m not trying to blame the owners of Pine Tree Circle for the COVID crisis. But it is shining light on a management style that I have been at odds with since the beginning of my relationship with them. Pine Tree Circle is the most important commercial building and community resource in Topanga and houses nearly half of the retail space available. How this building is managed will have a big impact on our community. I have strong opinions about this matter, and I feel it is important to share them. Owning a building in a community like this is not the same as owning a building in a city full of retail options. The tenants here have nowhere else to go. So, for example, when tenants are faced with an astronomical rent increase, itâ€™s putting people in the position of pay up or close your doors. I believe owning a building in a community like Topanga carries with it certain ethical and moral responsibilities.
Ownership should be aware of their impacton the community, and if they are not (or donâ€™t care) they should be educated by the community.
Since Nathan took the helm of Pine Tree Circle, he and I have had several hours of conversations and countless email exchanges, all of which have been carefully noted and archived. Back when there were rumors of severe rent increases, Nathan assured me it was all hearsay. I took the time to carefully explain to Nathan the partnership that exists between landlord and tenant, and the delicate balance, especially in such a small and unique area as Topanga. Landlords and tenants rely on each other to be successful, and when a building is not managed thoughtfully and ethically, a bad vibe (for lack of a more professional term) ensues and the environment can become toxic. I believe this is what is happening at Pine Tree Circle now.
I remember telling Nathan, time will tell if you are being honest with me. Well, time has told. I have repeatedly called Nathan out on practices, decisions, and details I have found questionable, and he has told me that in doing so I was jeopardizing our business relationship. For the most part, I have tried to bite my tongue with Nathan for the sake of the studio, but it hasnâ€™t been easy. I wonâ€™t get into details in this letter but suffice to say Nathan and I have a big difference of opinion about what constitutes basic business ethics.
So, what can you do to help? Knowledge is power. So is voicing your opinion. I think knowing whatâ€™s going on at Pine Tree Circle is very important because of its influence on the community. Start with a conversation. Many of the shop owners are your friends. Ask them how they are doing, if they are being treated fairly, how they can be supported. Suggest to the editors of our local newspapers, Topanga New Times and The Canyon Chronicle that this is a story worth writing about. The tenant mix at Pine Tree Circle, good or bad, will have a tremendous impact on our small community. The owners of Pine Tree Circle should be on record with their plans and intentions. If you have an opinion, share it with Nathan. I donâ€™t feel itâ€™s appropriate to share his contact information in this letter, but it shouldnâ€™t be too hard to find. Itâ€™s pretty much â€śout thereâ€ť by now if you care to find it.
This is a heartbreaking time for me, and a turning point for Pine Tree Circle. Yoga Desa wonâ€™t be the only casualty. In the coming months, you will likely see several long-time tenants close their doors. As this happens, I sincerely hope the community makes its opinions known to our new landlord. Itâ€™s unfortunate that this landlord is not more proactive in helping its existing tenants weather this storm. It would surely benefit them, and the community, in the long run. But Iâ€™m afraid this reasoning is lost on them.
Owner, Yoga Desa