Local Cafe Esperanza Trading Co. Unexpectedly Closes, Raises Questions Over Rent Agreements

Esperanza Trading Co., a Mexican-American-owned coffee shop located at 4229 SE Woodstock Blvd, only a 9-minute walk from Reed, opened its doors for the last time last Sunday, January 28. This came after an announcement the day before from their Instagram page, @esperanzapdx, beginning with “[i]t is with a very heavy heart that we say goodbye to our Cafe.” 

On their last day open, customers snaked throughout Esperanza’s study rooms, through the hanging plants adorning the space in order to get their coffee – supplied by the local Mexican-American Roasting Company, Reforma Coffee Roasters – one last time. Within two hours of opening, customers had already taken their entire stock of locally-made pastries, including their strawberry empanadas, pan de quesos, and puerquitos–pig-shaped cookies made of piloncillo and molasses. The weather called for an opening of their large window-paneled garage door at the front, outside of which young children biked in circles as older adults watched while sitting in the outdoor wooden patio space–which was torn down the following day, Monday, January 29.

Sunday’s announcement explained that the cafe was “unsuccessful in extending [their] lease.” The lease for the space ended at the end of January. Esperanza’s announcement also said they were “incredibly optimistic that one of [their] colleagues here in Portland was going to continue with the operations without missing a beat.” However, according to their post, they were unable to reach an agreement by the afternoon of Friday, January 26, so the location has to close until another business moves into the space. 

The failure to reach what Esperanza management felt was an affordable rent agreement with the owner of the building began back in October, says Angel Medina, who owns Esperanza Trading Co. along with Republica & Co., an acclaimed Mexican restaurant near Powell’s Books. “We thought we were in the negotiation process,” says Medina, who claims he had always intended to take over the space at the end of the lease. The lease as of the end of January belonged to former Boston Red Sox first baseman Kevin Youkilis, who opened a coffee shop in the space before Esperanza did business. However Esperanza, according to Medina, had agreed to partner with Youkilis and take over the space, fully paying for the use of the space, using coffee roasters left by the old company.

Alessandra Peraza-Aguillón, barista at Esperanza, explains that before Tuesday, January 23, the team “did not think [closure] was going to happen at all, we thought we would be able to make a deal with our landlord, Debbie [Peterson].” The Quest then reached out to Peterson for comment. 

In her comment, Peterson claimed that there was no rent increase on the property and that they “gave written notice to both the tenant [Youklis] and Esperanza in November 2023 – reminding them that the lease was about to expire.” Peterson also emphasized that “Esperanza was never a part of any letter of intent or proposal for a new tenant at the property."

In another comment to FOX 12 Oregon, Peterson referred to Esperanza as a “non-legal sub-lessee.” However, Medina believes this claim is false. “We were not a sub-lessee. Kevin [Youklis] was our business partner,” said Medina, who went on to explain that a “sub-lessee, by definition, is us paying rent to [Youklis], and him continuing to pay rent. That’s not what happened. Debbie’s gotten the check from us, my partner, and myself for every month until the last two months.” 

Upon viewing the Lease Balance and CAM (Common Area Maintenance) Reconciliation documentation for 2023, the Quest was able to confirm that Peterson is correct in claiming that the rent was not being increased. The base rent for the property, listed as “lease balance,” itself stays at a constant $4,502 every month. However, this is not the only expense Esperanza has to pay in order to use the space. Other expenses include CAM, Utilities, late fees, and a “permit violation cure.” 

These other expenses were what caused Medina to believe that “the cost of the overall maintenance of the space would have kept going up,” referring to a discrepancy between forecasted costs and actual costs. The CAM costs were forecasted at $17,732.64, but they ended up being $20,245.35. The utility costs were forecasted to be $5,700.00, but they ended up being $8,066.43. After seeing the difference between forecasted and actual costs, Medina says Esperanza “asked [Peterson] to give us justification for the rise in cost. To this day, we haven’t gotten it.”

Medina said that the permit violation as indicated on the document was due to the use of what was originally a storage space in the back as a space for customers – the space which featured a large central table for group collaboration, four study desks with lamps, and two plush chairs. Esperanza made, according to Medina, “cosmetic changes” to the space, including hanging ceiling panels, putting up a partition wall, and hanging mirrors and artwork. Medina also explained that the new tenant that is going to pick up the lease is under the impression that they will be able to use the space in the back, and will attempt to work out an agreement in which they will be able to use it.

Esperanza’s use of the space began in early 2022. Peterson, in her statement to the Quest, explains that her history with the building goes back much further, explaining that her family “has been in this community for 70-years. My father started his bicycle business here in 1959 and purchased the building in 1969. We are deeply connected to everything that’s happening here and remain committed to our friends and neighbors in the Woodstock area in every way.” In 2020, the space was leased to Youklis, who opened Loma Coffee Company, until 2022 when the space began to be used by Esperanza.

In transforming the space from Loma to Esperanza, Medina says changes were made “very much with the idea that this was going to be a community space. Most people when they open coffee shops, they don't necessarily set up an entire room for students to just sit down and study.” Esperanza’s study spaces are one of the prime features of the shop and regularly attract Reed students. The shop even advertises on their Instagram page that Esperanza is “like your home office, but the coffee’s better.” With study desks and tables in rooms of varying atmospheres, the shop felt, as Medina described it, “like no other coffee shop in Portland.” 

A key part of Esperanza’s identity is as a Mexican-American-owned business, which is shown in their menu, culture, and relationship with the community. Medina describes Esperanza as doing many things with intentionality, including their drink menu. “There's not a lot of lattes or things like that,” he says. Instead, the shop served the Con Choco and Mexican Cortaditos.

“Everything that we built to this point has come with intentionality and intentionality has been focused on doing the thing that's very much ours, that if in the right place, and with the right message, people will understand it and understand our culture a lot more because of it,” says Medina. “Usually, it's not easy to make a space feel safe for marginalized communities,” says Peraza-Aguillón, “especially with the emphasis of black and brown people in our community.” 

This emphasis was felt by members of the community, who expressed their reaction to the closing in the comments below Esperanza’s closing announcement post. User @aylin_michelle on Instagram explains how “This was a safe space for the few people around like myself and for others to enjoy and appreciate. I finally felt relief upon discovering this hidden gem in such a white part of town, where I could sip on my cafecito con pan, while I chipped away at my education. This place was made for first Gen students.”

Focusing on culture and community was an important value to the Esperanza team. Medina explains that, to him, the business was more than making a profit, saying that “if somehow the price of coffee shot up by $3 a pound tomorrow, I'd rather just be out of the coffee business than to feel like I have to charge somebody $8 for a latte. That's Brooklyn money. That's San Francisco money. I'm not going to do that.” Medina stresses that Esperanza was “not a struggling shop” and that the closure “has to do with just unrealistic expectations for what one should pay on a down economy when it comes to real estate.”

While the Esperanza name will not be selling coffee anytime soon, “don’t be surprised if you hear something,” says Medina, who is helping the staff actively search for another space. The store is “not having a big ‘buy all the furniture’ sale because they will need that stuff again,” says Medina. “If I can’t do anything with it, they will.” 

According to Peraza-Aguillón, staff were interested in moving Esperanza to the Portland Mercado once the lease was up, but because of a fire at the Portland Mercado in early January, the space wouldn’t be usable anytime soon. Currently, most of the Esperanza-owned furniture and equipment is in storage. If the shop was going to open again, they would “want to stay in Southeast in the general Woodstock area, just because of how much of a tight-knit community we felt,” says Peraza-Aguillón. 

Considering that the espresso machines at 4229 SE Woodstock are owned by Youkilis, not Esperanza, the next question, Peraza-Aguillón says, is “What would it look like if we found a space for lease, but it didn't have the equipment and would need to have the equipment?” Former staff at Esperanza are now brainstorming ways to potentially fund an espresso machine if they were to reopen in another location.Community member Rachael Amaro has begun fundraising on GoFundMe to help the staff through the transition between jobs, and is, “hoping to raise enough to help them with general expenses to hold them over to their next job/paycheck.”