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Making sense of restaurant closures in Columbia's Vista

Pointing Fingers


The Vista

According to Mark Segal, owner of the Carolina Strip Club, his Vista steakhouse was doing good business before it closed in September. 

Columbians are an adventurous bunch, he contends, happily exploring steak options that aren’t anointed with holy name like Halls or Ruth’s Chris’s. His building, however, was not good for business. 

He describes a maintenance nightmare — failing air conditioning units, structural issues and a leak under the restaurant’s base — and equally nightmarish repair costs. He went to his landlord — he sublet the space from the nextdoor location of the nationwide craft beer chain World of Beer, which didn’t respond to Free Times’ request for comment — asked for help with the maintenance. 

He acknowledges he signed what’s called a triple net lease — a lease agreement where the tenant has to pay property taxes, building insurance and some or all repairs — but he hoped for a concession. No luck, Segal says.

“These owners in the Vista and Five Points don’t want to take care of their buildings,” Segal asserts. “Basically, the only places that can afford these types of huge swings are corporate restaurants … The [building] owners don’t want to help you with anything.”

Reaching out to Free Times after this story was initially published, Simon Canasi refuted Segal’s claims. He owns Columbia’s outpost of World of Beer, which sublet the building next door to the Carolina Strip Club.

“He never once came to me and asked me about issues on his side of the building,” Canasi asserts. “I can tell you we have an excellent landlord there. He is an absolute gentleman.”

The building’s landlord comes by way of real estate company Colliers International.

Canasi says the rent Segal was getting was “reasonable" for the area, estimating that it was 30 percent less than the district average.

“The bottom line is that he wasn’t doing any business,” he posits. “I’ve been in the hospitality industry a long time and let me tell you, competition is stiff.”

And so goes the story of the Carolina Strip Club — for now anyway; Segal says he plans to reopen his steakhouse concept later this year in West Columbia. The restaurant was the second Vista business to close under similar circumstances in second half of 2019. 

Columbia’s outpost of TakoSushi, the odd Mexican and Japanese chain, announced its closure in November, blaming its exit on a deteriorating building. The property owner disagreed, telling The State he didn’t know of major property issues and believed they were doing good business.

However, while several other restaurants in the neighborhood closed in the waning months of last year, they cited other factors — the owners of stalwart date and dessert spot Nonnah’s said they just wanted a change when they closed in November; chain beer bar Flying Saucer exited the market saying it was just a business decision when it closed in December; and fellow craft beer chain The Casual Pint left the district without giving a reason. 

Indeed, when reached by Free Times, prominent players on the Vista business scene downplayed the closures and seemed skeptical of building issues. They say it’s wrong to read too negatively into the closures, favoring a rosy outlook for the city’s top entertainment district with a pair of hotels and other development primed to invigorate the area in the near future.

“Very rarely do businesses want to say, ‘My concept isn’t working anymore and go out that way,’” says Fred Delk, executive director of the Columbia Development Corporation.

Delk points to the neighborhood’s robust number of restaurants as one of the reasons it has seen closures recently. He says there are roughly 85 to 90 restaurants and bars in the Vista, a number reached in a growth spurt about five years ago. 

He estimates that the district went roughly four to six businesses beyond the market’s demands. 

“At that time, it felt like to me they were pushing the edge of the market,” Delk explains. “[Now] it’s time for some of these leases to expire … so we lose some businesses like that.” 

Business models change, customers’ wants change, and, like clockwork, there’s turnover, he says. 

Patrick Palmer thinks it’s likely the landlords did try to keep some of the businesses in the district. The director of retail services for the real estate company NAI Columbia says the decision to depart is typically tenant driven, though he suggests that high end-of-lease rent may have pushed some away.

[Online copy corrected.]

Leases typically grow more and more expensive over their lifetime, he details. That results in most tenants facing 2 to 3 percent annual hikes or a final year hike of about 10 percent. 

“Some of those [departures] are longer term tenants and on the back end of leases,” he says. 

Delk acknowledges there may not be heavy incentive for landlords to renovate a building to keep a tenant, particularly if a tenant is underperforming. The neighborhood has high demand with recent and upcoming residential and hospitality growth, which means there are plenty of different suitors for buildings. 

“Good landlords look for good tenants,” Delk says. 

He doesn’t conflate that with a desire to leave buildings untouched, though.

He estimates the historic district has seen over $1 billion in building investments over the last 25 years. That’s driven in part because owners can receive numerous tax credits at the state and federal, meaning about 45 percent of renovation costs can be written off. 

In stark contrast to recent closings, fine dining outpost Motor Supply Co. Bistro continues to thrive in its aging space. It was built in 1890 — “That’s with an 18,” owner Eddie Wales emphasizes — and his experience, across two landlords maintaining his building, has been overwhelmingly positive.

Wales says triple net leases like Segal’s are extremely common in the business — he’s been on one throughout his career, and typically they allow for some wiggle room on repair costs. He posits that it’s uncommon to hear about building issues for Vista tenants, but that the rent can be difficult to overcome. 

“The rent is high, it is super high, and it’s difficult for small independent restaurants,” Wales says, contending that it’s comparable to other growing cities. “It may take you a couple of years to build that clientele, but meanwhile you’re still paying full rent.” 

Ultimately, Wales believes focusing on the recent closings gives an inaccurate impression of the neighborhood’s health. 

“I think people paint doom and gloom when they see a place close,” Wales states, mentioning the media specifically. “It’s kind of survival of the fittest … I am not concerned about the overall health of the district.”  


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