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The Box says goodbye

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After eight years in business, the last five under current management, Wenhua Xiang (文化巷) institution The Box is calling it a day. Business is not down and owners Francesca De Andrea and Diego Triboli do not want to retire.

They are shuttering their bar because of a common problem in this part of the city — their landlord is attempting to double the rent.

A little background

Kunming, like most of China, has seen real estate prices sore over the past decade. Rent has risen along with value. Another Wenhua Xiang mainstay, Salvador's, has seen its rent more than quadruple in the past four years.

Business leases in the Wenlin Jie (文林街) area used to be signed for four to five years but one or two year agreements are the new standard. When a lease ends, the landlord can simply dump the old tenant and find a new one.

At The Box, not only was the rent doubled, but the contract was only offered for one year. De Andrea assumed at the end of that year she could again expect her rent to double.

There is no protection for renters and right of first refusal does not exist in the Kunming real estate market. Nor do caps on rent increases. If a landlord demands triple the rent when presenting a new lease, tenants have to pay or leave.

Compounding this situation, especially for small business owners, is the practice of zhuanrangfei (转让费), which loosely translates as a lease "handover fee." Under this quasi-legal practice, outgoing tenants can charge exorbitant fees to incoming tenants simply to take over existing leases.

This process of "flipping" storefronts has led handover fees in Kunming to spiral upward. The landlord is typically left out of the equation.

In response, landlords in the Wenhua Xiang/Wenlin Jie area began drawing up contracts that forbid zhuanrangfei. They then increased their rents to include what former tenants had charged for the handover fee.

GoKunming did an impromptu survey of the area and found the current asking-price for a storefront on Wenhau Xiang lies somewhere between 300-500 yuan per square meter.

These rates are equivalent to, or higher than, what people looking for office or retail space in Midtown Manhattan, New York, can currently expect to pay.

We sat down with Francesca, Diego and Stefania over a few bottles of Prosecco to talk about The Box, leases and their five years spent of Wenhua Xiang.

Interview

GK: What was Wenhua Xiang like when you guys took over The Box?

Francesca: Well, the trash room on the corner didn't exist and people and restaurants dumped their garbage in the middle of the street. Also, despite the trash, there was more of a cafe culture. Tables and chairs were outside on the sidewalk and more and more shops were moving in all the time.

GK: How has the street changed over the past five years?

Francesca: There have always been a few students in the summer baitan [selling merchandise from the street]. But never like this. All the cars parked on the sidewalks and people using their cars as shops. Everyone milling around at night not being able to move on the street. That's the biggest change.

GK: When did you start your import business, Sapore Italia?

Francesca: Almost at the same time as The Box. We were waiting for the license for Sapore Italia for a long time. We weren't legal for the first ten months we were open. But don't worry, we paid a fine and now everything is ok.

GK: What was the biggest challenge in opening the bar?

Francesca: I had never run a business before. Diego had, so that was a great help. But for me, human resource management was the hardest thing. I had experience managing an office in China but not a restaurant. At first my employees wouldn't tell me the simplest things out of fear. I would find out the refrigerator was broken two days after it happened. Things like that.

Another challenge was convincing the government to let me hire a foreigner. I had to give up my liver to baijiu meetings to hire another Italian. I got through that because of my father. He is a mountaineer and taught me how to drink.

GK: Are you bitter that now, after all this work, you have to close?

Francesca: Not bitter, just angry at our landlord. She said we could sign a new lease for 22,000 yuan a month. Then she called and told us never mind because she found someone else.

This is all before our current lease had even ended. When I asked how much we would have to pay to keep the lease she upped it to 30,000. There was just no consideration to our lives and our efforts to make the property valuable. It was underhanded the way she tried to leverage more money from us.

GK: So after all of this, why a bar/restaurant in the first place?

Francesca: Originally we only had a license to make gelato. It took forever to switch it legally to a restaurant. At first we thought we just needed a window onto the street to sell gelato and run the import business. But I have always loved cooking. It is a way for me to relax.

As for the bar, little nips of schnapps from my father at a young age gave me an affection for alcohol, so it was a natural fit.

GK: What is the hardest part of running a bar in Kunming?

Diego: Dealing with Francesca. No, no...Kunming is not a typical place. There are a lot of crazy people here, good and bad ones. Being psychologists for our customers and trying to balance the insanity of everyone who comes in here is difficult. It is always a compromise between rationality and craziness.

The result has been good. When you put your soul into something, like we did with The Box, it's never easy.

GK: Any crazy party stories?

Diego: That's difficult, a lot has happened here. Once, a guy jumped out of the second story window to meet his friends on the street. That was normal craziness.

Stefania: As far as absolutely crazy, we had a customer leave who was quite drunk. On the way home he fell down, or something, and split his head open. He came back to the bar, bleeding everywhere, and ordered another drink. Then he started wiping the blood off his face and licking it off of his fingers.

GK: What's your favorite memory from the bar?

Francesca: I was drunk for the first two years, so I don't remember those times. But seriously, John Lundemo giving us a huge basket of fresh fruit for the bar's anniversary was unexpected and wonderful. I spent the night posing for pictures like Carmen Miranda.

GK: What do you think Kunming needs more of?

Francesca: More Yunnan. Kunming is growing up and becoming a big city. Right now it is somewhere between big and small. I preferred it when it was a bit slower. Now things start and then they have already happened. They are over so fast. I miss the chill days.

GK: What's next for you?

Francesca: We will keep expanding the import business and we have plans to open a grocery store in Zhongdian like the one we already have in Lijiang.

GK: Any advice to people wanting to open a restaurant or bar in Kunming?

Francesca: Running The Box has been the most demanding thing ever in my career. I have learned new things every day. You don't make money in this business without killing yourself on a daily basis. But it has all been worth it.

Editor's note: The Box will hold a closing party on September 7. They encourage newcomers, regulars and furniture to attend. The owners also asked that GoKunming publish this thank you letter, which we do gladly:

To all the friends of The Box Bar...

To those who loved us and to those who hated us.
To all of you who spent at least one special night with us in our cozy house.
To all of you who saw and experienced what we've done these past years to keep The Box's spirit alive.
We've always tried to put our heart and soul into the bar, but unfortunately it is now impossible for us to continue.
We don't blame the system or the exorbitant amount our rent has been raised over the years, we only blame ourselves for giving up.
We're even sorry for having to justify ourselves, but this is just our style, as you know.
Life continues and goes on, enriched by the pleasure of having seen you happy in our bar for such a long time.
Now we ask only that you to bring your low, fat asses to The Box on September 7, to have one more "last one" with us.

Thanks,

Francesca, Diego and Carlo

Images: Francesca De Andrea, Hugh Bohane, Patrick Scally

© Copyright 2005-2019 GoKunming.com all rights reserved. This material may not be republished, rewritten or redistributed without permission.

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Comments

This insane real estate bubble China is in is causing massive pain like this. 22k per month is ridiculous, even more than someone would pay in NY (considering the exchange rate) is even more ridiculous.

Looking around town I see about 50% of lights on in buildings at night, down to 20% in most buildings. Sorry, that's just not feasible long-term in any market anywhere. How long will the bubble continue?

Oh yeah - very sad to see the box go - not many foreign food places left, if Salvadors shut down for the same reason it would be an international incident.

really sorry to see this place go. they provided the best pizza in my opinion and whether you love(d) or hate(d) the Box it has become almost legendary amongst Kunming visitors and expats alike! I for one will blame the greedy landlords alone. when Wenhua Xiang is an empty shell they might realise what they've done.

best of luck Diego and Francesca... I'm sure that whatever you do next will be even better.

Are you kidding! 30K a month! It's just sickening the greed of these landlords. I think I'm going to stop spending money in Wenhua Xiang because I don't want to see my money going in to these guy's pockets. Let some other saps do it.

Little piece of information: many landlords are not left out of the handover fees. A comon practice is to have a relative posing as the owner of the biz going out and pocketing the handover fees (after kicking the current biz out of it without any kind of compensation).

Handover fees have been going up drastically, but at least the biz that was moving in had a chance of recovering it and getting compensation for renovation cost when they were moving out. Many of the premises in wenlin jie area were dump before a bar renovate them and did something nice out of it. Any kind of renovation cost at least 200-300,000 rmb, so how are new biz suppose to do? Recover that investment in 1 year, ridiculous!

you guys will be missed. best of luck on your next adventures. buona fortuna...

A great shame! The Box will be deeply missed and leave a big gap. Kunming will be a lot poorer as a result. Thanks for all the good times!

I hope the landlord cannot find a new tenant.

30.000 a month for such a tiny place? Does The Box have 4-5 floors above it I'm not aware of included in that price? You could find cheaper storefronts in London's W2 no problem. The businesses ought to sit down together and all decide to move to another accessible area, sign cheaper 5 year leases and collectively raise their middle fingers to the greedy bastards at Wenhua Xiang.

I'm gonna miss The Box's pizza so much!!! You guys are awesome! Wish you the best of luck in the future!! La bise!

We love you Francesca...Diego...Stefania... and Valeria...and all the wonderful people who have worked and been around The Box these past years...We have been going to "our place" for 7 years...and like others, we have so many memories to treasure and remember forever...
We've been through the changes, the good times, and the tough times...we've laughed and hugged and kissed and been there for each other...
I think of the time I played my guitar and we all sang for one of the anniversary parties...Getting special cushions on the bar stools for us...The times I tried the wild drinks, and and once, after a few absinthes, ran up and down the street, loving everyone. (I was told my wife would have to be called in the future to O.K. these excursions into the cosmos).
We always felt safe, at home, comfortable, and we appreciated how everyone at The Box always looked after Cas and I.
Not much to say, except, we're all moving on...but we'll forever be friends and meet up together, all over Yunnan, and in places in the world. We know we will.
We will miss all of you...
Nevada & Cas

Sorry to hear about all this guys and loved your bar! Used to hang out there pretty much everytime i had a night off for some beers!
I wish you the best of luck for the future!
Will definitely miss The Box!

Sending love to the immortal box from alaska!

I will miss you guys so much, miss the first time I hit my head up stairs, dizzy but funny. miss the pig out time with a big big pizza,I miss the chocolate ice cream,no place like the box can ask the owner play the song u like for you ...I was really touched.I miss the comfy afteroon with the David bowie n PJ harvey's song....... I miss the donuts game we had there too !geez I gonna cry,evevrytime I fight with my bf I will run away like a kid,go to the box feed myself a lot ice cream,he was there waiting for me,coz he knows thats the place I will go.

Very sad indeed...I hope the new tenant is also a foreigner who opens up a similar bar or restaurant to you guys. Good luck with the future and hope to visit you in Lijiang or Shangri-la. In any case, stay in China! Restaurants/bars like yours really make places like Kunming feel cozier.

You will be missed.

So long and thanks for all the cheese.

Sad to see the Box close.

This real estate craze wont last forever in China..

I have seen areas of Shanghai bankrupt their own local market and collapse, due to unsustainable rents.

It is more about dumb greed of owners. If their neighbour gets 30k they want at least that, and will let property sit empty for years in the vain hope of getting the higher rent.

The rent price is so ridiculous, I simply don't understand it. How can even the most successful establishments on the street like Salvador's survive this kind of rent? I think the landlords are screwing themselves in the long run, Wenhua Xiang will become a vacant lot as businesses scramble to find sane rent prices in another area.

Thanks everybody for the lovely comments, representing all the love and support you've given us during all these years!

Hope to see or to feel (in case you can't really make it) you all on Friday night.

Big hug, Francesca.

You could always move down to Chenggong.

.......begging

Although I don't live in Kunming full-time anymore, I spent quite a few nights there and will really miss the place. I remember hanging out there back in 2003-2004 at the same location before the renovation. It was a great place because after so many years you'd find the same people returning. It was a great place to have that sense of camaraderie.

I'll miss political discussions mixed with a hefty helping of alcohol, and I'll miss the great food. I'll miss the Smegma Riot boys and all the debauchery that goes along with that.

I had a wonderful 28th birthday party upstairs on the second floor and everyone was wonderful, and very understanding about the loud noise and crowding.

I remember watching my Australian friend Justin leap off the second floor through the windows to grab a pack of smokes across the street. I remember hitting my head walking down the stairs on more than one occasion.

I remember lots of late night discussions and being disappointed when they would close down every evening and we'd have to go home.

I'll miss Francesca and I'll miss the Box. Best of luck to all of you in the future.

Tim

Dirtbag greedy landlords... 贪得无厌

I echo all the comments here. These rents are out of control. Wenhua Xiang in general has become out of control. The cars, and the car-based night market have done the most to make the street undesirable. I've nothing against street vendors, and nothing against crowds. Hell, I wouldn't live in China if I did, the vibrant street life is one of the joys of living here. But when street vendors commandeer an already narrow roadway with their car-cum-storefronts, and other drivers try to use what roadway remains as a thoroughfare—in both directions—it's a disaster.

Wenhua Xiang should at the very least be made a one way street. Even better, cars should be banned altogether (with exceptions for deliveries for the shops and for residents inside Wenhua Xiang). And those vendors who sell out of their cars? They don't do that anywhere else. Why do they get away with it here? Let them park outside Wenhua Xiang and carry their goods in by foot or bicycle like the rest of street vendors in China.

I'm sorry to see the Box go. I can't really comprehend how many of the businesses on Wenhua Xiang these days can justify rent when its pushing 30K.

What do ya'll think are some other neighborhoods in Kunming that could potentially become the new, less gentrified, less uptight Wenhua Xiang?

@Geogramatt, actually I'm noticing people selling out of cars more and more in Beijing lately (though usually one or two cars and not an entire night market's worth). Maybe Kunming is for once at the leading edge of a trend! :-(

I understood there is a law that goods are out of reach from the police if it's in the car

Truth or rumor?

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