Sitting at a low chair in front of a polished mahogany bar, one man leans back and sips a beer. A flat-screen TV, perched just above a wall of shelves stacked with bottles and a fluorescent Peroni sign, is showing a replay of the Super Bowl.
The man will be catching his flight soon, and this pre-boarding time is leisurely, peaceful. No one is chattering nearby to drown out the TV. When he places an order for food and another round, he is unencumbered by other travelers.
But at a table near the entrance to Chiaramonte’s Deli, the owner of the establishment looks at his balance sheet, glances back at his lone customer, and wonders aloud how much longer he can stay afloat. “When we came here we were going after a dream,” says Louis Chiaramonte Jr., a fifth-generation Italian-American. “But it’s really just turned into a nightmare.”
Tall and somewhat slight in frame, Chiaramonte has a boyish face speckled with two days’ stubble. In trying to expand his family’s 103-year-old delicatessen, which still operates at its original location on North 13th Street, Chiaramonte took a risk by opening a shop late last year at San Jose’s Mineta Airport. Working with leaseholder HMS Host, a food and beverage retail giant, the family took out more than a half-million dollars in loans to build an attractive sandwich shop and bar in Terminal A.
What’s happened since that time serves as a reminder that timing is everything in life, and that nothing is more important in real estate than location.
The recession has hit airports harder than many other business sectors, and Mineta has seen a steep drop in traffic—flights are down 33 percent since 2007. To make matters worse, Chiaramonte’s bar and deli is located in Mineta’s least-visited pocket.
About 70 percent of the airport’s flights are still funneled through the recently renovated Terminal B, which leaves less than a third of traffic to go through Terminal A. Chiaramonte’s is located at the end of a jagged corridor that leads to a largely hidden area called Terminal A-Plus. The area is so remote one airport security officer didn’t know it existed.
Only 13 percent of the airport’s flights enter or exit SJC from this location, leaving Chiaramonte’s Deli out of sight, out of mind, and in two weeks, likely out of business.
Chiaramonte family are great decent people who deli has been in San Jose for 103 years that are being screwed over by city, airport, HMS Host and Council.
A great example of how San Jose screws over small business, why doing business in San Jose is so difficult, that you can never trust city or Council
“I’m not trying to wash our hands here,” Liccardo says, “but it is important when somebody signs a contract they know the parties involved.”
– Yea, you are washing your hands – another jerk politician
Don’t believe city when they tell you that San Jose is a great place for small business, it is NOT.
The only business that survive in San Jose are big businesses that can pay lobbyists big fees to get you favored treatment, have politicians help you or give you city millions
Nothing personal, but airports are a terrible business location. People want to get out of them as fast as possible, and not waste time and money in the airport. Of course, if there is a major snowstorm and people are stranded in the airport then you do have a chance to make a few dollars.
So, from a business perspective, you need to ask yourself; “How often will San Jose have a major snowstorm that strands people in the airport.” Once you answer that you can make the decision as to whether or not it makes sense to have an airport location for a business.
There is no doubt in my mind that the CSJ is VERY business UNFRIENDLY.
However, there also appears to be a lack of due diligence by the Chiaramontes. Plus, the airline business is clearly down. Timing is crucial.
“Unlike many of the other concessions at SJC, the family decided to take on the costs of building their shop and the day-to-day management of their operation, rather than simply lending their name and menu to Host for a small percentage of revenue.” Original Joe’s merely lent it’s name and recipes to San Jose Joe’s @ SJC. They are doing very well, I hear. I understand very few of the other venues there are doing well. Joe’s has a prime location. The Chiaramontes do not.
The Mullers investigated opening a Lou’s Village @ SJC, and declined. They apparently found out something that the Chiaramontes did not. It’s a sad story; but you can’t always blame someone else for your problems.
Sadly,these folks should never have even thought about opening in Terminal A or A Plus. If a new airport sight wasn’t available, they should have walked away. I have noticed that OJ’s offshoot does a brisk business in Terminal B and I would guess Gordon Biersch does OK as well. The question should be, “Who sold the deli on Terminal A? And what promises were made.
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I knew a few people who had an opportunity in the new Terminal B and passed on it as the number of concessions there do not match the enplanements. There are 10 plus food establishments that serve a small number of passengers. More places will be leaving in the near future.
HMS Host knew Terminal A+ was a loser. It was doing average when Max’s was there and the flights were much more numerous.. They should have disclosed this to their “partner”, but once they got their local participant they quickly forgot about how they helped get that contract. Host should help out. True Chiaramontes should have been more perceptive about due diligence, but were they ever told that this was a possibility?
I personally attended many of the meetings my husband and his parents attended. I know that Host lied to the Chiaramontes about how other businesses were doing before they even started their build out.
Host never gave Chiaramontes the option of just leasing out their name. In fact, Chiaramontes wasn’t aware that many other local businesses were given that option until they began construction.
The cheapest “airport approved” contractor charged $340,000 for the basic buildout. Equipment, licenses, architectural fees rose the final price tag to over $500,000. All this money came from collatoral loans, with some money here and there from Louis JR’s parents social securtiy payments and extra pay I earned during my deployment in Iraq as an Army Reservist.
This has been a painful lesson to my whole family that felt so honored that their 102 year old family business would be considered for the airport as representing local cuisine.
All along they were promising assistance with loans and financing, help with personnel and union issues and they pressured us to hurry up and build or face fines. We were scared about certain airlines leaving San Jose, but Host was very reassuring.Yes the contracts looked unfavorable to us but we were told this was wwhat all airport contracts look like and it was a “good Faith contract”.
I am not a private business person but the smooth talking promoters had all the cards. They didn’t even inform us of the hidden costs of delivery that we couldn’t afford. Each cart of groceries has to be pushed in by the owners through an obstacle course a quarter mile long.
In the beginning my family asked a lot of questions which were mostly answered in a way which indicated that Host or the airport would step in or work with them to make sure things worked out for everyone.
I bought a burrito at a local taquerea today which cost more than Chiaramontes was allowed to charge for a large sandwich at the airport. The airport wants “street prices” but charges $18,000 a month rent and high wages. We were forced to use prices comparaqble to our 13th Street location, where we cater to a less affluent clientele (we even accept food stamps). At the same time, San Jose Joe’s can base its prices off its ritzy downtown restaurant.
We are a very small family business which managed to make it through the great depression but were no maqtch for Host, a multibillion dollar corporation or the Airport which simply deferred to Host about whether or not to close A+. I work for a governmnt entity and we never defer to the contractor to make decisions which legitimately should be made by an agency accountable to the public.
We swam with the sharks and got eaten alive. We just didn’t know that we were swimming with sharks until it was too late.