After nearly six years in business, Patricia Ballesteros—owner and head chef at the International Cowboy Cocina Restaurant in Hailey—received a notice on Sept. 2 instructing her to vacate by the end of the month.
Building owner Steve Holzman had increased rent by 65% and denied an extended lease, Ballesteros said. On Wednesday, the Cowboy Cocina officially closed its doors to the public.
“It was a great pleasure and a great pride to have prepared each of the dishes that came out of my kitchen every day,” the chef said Thursday.
Since 2016, Ballesteros, a native of San Pedro Sula, Honduras, had dished up a mix of Central American favorites—huevos rancheros, chiles rellenos, tamales rolled in fresh banana leaves—in the Meriwether building along First Avenue. The menu also offered hamburgers and other standard American fare.
“Due to the increasing cost of doing business in our valley, it is with great sadness in our hearts that we must alert you to our impending closure,” Ballesteros announced via Facebook last Friday. “We hope that our place will continue to be part of your memories.”
In Hailey, the commercial real estate market—slackened for months by the COVID-19 pandemic— is beginning to look like the residential one, marked by slim inventory and rising prices.
Kirsten DeHart, an associate broker at Wood River Properties in Hailey, has been closely tracking the commercial real estate market in Hailey this year. This year’s median list price for commercial properties in Hailey is up 93% compared to 2020, at $638,000, she said. Last month’s 13 commercial listings averaged $1.1 million.
Overall, DeHart said sold listings are up 71% year-over-year. And the average length of time that commercial properties spend on the market has been down about 37% in 2021 compared to 2020, she said.
Most notably, commercial inventory is down by about 50%.
“2021 has outsold 2020 by a large margin. We aren’t selling many more units, but sales are more expensive,” DeHart said.
Commercial real estate broker Paul Kenny agreed.
“The inventory is nonexistent. Tenants are just going to have to start paying market-rate rent,” he told the Express. “We don’t have other spaces for people to look at in Hailey because there hasn’t been new development. That’s coming, but it’ll take a while.”
On Tuesday evening, Ballesteros held a spaghetti feed on the Cowboy Cocina deck to prepare the Wood River High School girls’ junior varsity soccer team, including her daughter, Johenny, for their game on Wednesday.
Iconoclast Books & Gifts owner Sarah Hedrick, another tenant of the Meriwether building, described the gathering as bittersweet and close to home. On Aug. 10, Hedrick was advised that her rent would increase by 55% in the fall, she told the Express. Like Ballesteros, she used Facebook to share the news with customers. The announcement was met with indignation.
“It saddens me to see our valley turning into something I no longer recognize,” someone wrote. “Greed is disgusting.”
“For them to do this to a beautiful bookstore is criminal,” a second person commented.
Hedrick said that she’s determined to stay in business at the Meriwether building despite the proposed rent increase. If she doesn’t accept the new rent terms by the end of September, she will be asked to vacate.
“In August I was told they would have doubled my rent, but because [Holzman] valued my bookstore he would only raise it 55%,” she said. “It felt like I was supposed to be grateful, but I was in shock. I have already lost a home and a car to my business. During the pandemic, I wasn’t eligible for any relief.”
Hedrick added that she was “very grateful” to Holzman for temporary rent forgiveness in the spring of 2020, around when her three-year lease was up for renewal. Unlike other landlords, she said, Holzman didn’t expect to be repaid, and he allowed her to go month-to-month.
“He just plain forgave rent in April and May, which got me through last spring,” she said.
Holzman, a part-time resident of Gimlet, told the Express that he believed his investment team had been “incredibly fair to all tenants” during the pandemic. He has always patronized the Cowboy Cocina and Iconoclast Books when in town, he added.
“I don’t know another person in this valley that gave out that kind of hardship discount,” Holzman said. “I’ve had very good fortune in my life and the last thing I care about is money.”
The rent increases announced by Ballesteros and Hedrick may seem extreme compared to the lower rents of 2020, he continued, but “from the aspect of business, hardship is more or less over.”
“This whole area is booming. Demand is up,” Holzman told he Express. “Two, three years ago, Ketchum’s [commercial market] got very tight. Now commercial space in Hailey has tightened significantly in the aftermath of the pandemic.
“That’s why when I look at our rents, I know we’re being incredibly reasonable.”
Holzman explained that the newly calculated rents at the Meriwether building aren’t far off from 2013 figures. The rates simply reflect the current market value, which he said has surged.
“In 2013, the owners of the [Cowboy Cocina] space were paying $3,600 per month. I started [Ballesteros] at $2,500 in 2016, and we went even lower during COVID,” he said.
As far as Iconoclast Books, Holzman said he viewed bookstores as “endangered species that I have always protected.”
“I’d suggest that [Hedrick] incorporates as a 501(c)(3). I’d love to support that. I’d contribute $10,000,” he said. “But there’s a limit to how low I can go. I can’t give free land. I have two partners and this is an investment.
“If you could quote me on one thing, I’d have to say no good deed goes unpunished.”