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Update, July 25:
Khepra Anu will be able to continue operating Hempburger Cafe & Juice Bar at 408 H Street NE if he abides by a settlement reached through mediation with his landlord, John C. Formant, today in court. Anu must also make his rent payments in full and on time going forward. Both Formant and Anu’s attorney confirm this. “I’m breathing easy, but this was a trip,” Anu says. “It was a crazy rollercoaster.” Anu says that he was able to pay off $23,000 of his debt today and will have an additional $13,000 to pay off by Sept. 1.
Chef Khepra Anu, a raw food and juice cleanse enthusiast, has been providing neighbors on H Street NE with affordable, healthy food since 2011. He started out with Khepra’s Raw Food Juice Bar, serving vegan entrées such as coconut “crabcakes” and avocado quinoa chili for as little as $11 each alongside juices and smoothies. Then Anu rebranded as Hempburger Cafe & Juice Bar at the end of 2018. Now, the small local business is in danger of closing.
Building owner John C. Formant seeks to evict Anu from 408 H St. NE over three months of missed rent, according to a complaint filed in D.C. Superior Court on May 22. It alleges that Anu failed to pay a total of $21,833.91 from February through May 2019. A hearing is scheduled in D.C. Superior Court on Thursday morning.
The plaintiff is listed as Somerset Investments, LLC on the complaint. Both D.C. property records and Department of Consumer and Regulatory Affairs business filings confirm that Formant is behind the LLC. Formant did not respond to any of City Paper’s specific questions about the case. He only offered: “We have no comment. The matter is the hands (sic) of our lawyer and Kephras lawyer and DC Court.”
“We would be heartbroken if Khepra’s landlord kicks him out,” says Lara Atella, who owns Hot Yoga Capitol Hill next door to the restaurant. “His cafe has been a cornerstone of the community and a favorite post-yoga gathering place since he opened. Khepra has been a wonderful neighbor to us at the studio for years. He’s often catered our gatherings and even allowed us to use his space for teacher training. Khepra’s cuisine is world-class, healthy, and delicious. It would be a shame to lose another small, locally owned business on H Street.”
Anu’s business wasn’t always located at 408 H St. NE. He first operated out of Dynamic Wellness located a few doors down on the same block, and stayed there until 2017. In October of that year Anu inked a lease for 408 H St. NE, but it was a false start because he couldn’t get proper financing to move forward and says he voided the lease, walking away from the project.
Anu didn’t give up. “Me and my wife had a condo in Columbia Heights with a significant amount of equity,” he explains. They put their condo on the market and it sold, giving Anu enough money to go back to Formant and his team. “I let them know I’m still interested in 408 if they’ll have me. A week or so later they contacted me and said, ‘We’d like to have you in the space.’”
Anu then went about refurbishing the shop. Construction lasted from August 2018 through November 2018 and the cafe opened in December. Anu says he poured $200,000 from his condo sale into the build-out. “That was our entire nest egg,” he says. “We sold that and all of that money went into the building.” If evicted, he fears he’ll never see that money again. “Probably 80 percent I can’t walk out of here with—I can’t take the paint off the walls, then there’s carpentry, plumbing, and electricity.”
Anu says that Formant was patient with him when he first signed the lease, but wishes he could have a full calendar year to settle into his business and catch up on payments, especially because he says summer and fall are his busiest seasons jammed with events that generate revenue.
“Yes, I understand you want your money yesterday,” Anu says. “But it would be better business to stick it out with me than evict me and potentially not get your money that’s owed to you.” A new tenant wouldn’t have to put in a bathroom, kitchen, or even paint the walls, according to Anu. “We improved this space with our own money.”
By February 2019, Anu says, he knew he was in trouble. “January was the last time I had paid my rent,” he says. “I told my landlord, ‘If you give me a couple of months I will be caught up by the end of summer.’ We’re not at the end of summer yet.”
Anu’s attorney, Karen Selby, wouldn’t comment for this story, but City Paper spoke with a lawyer who has been practicing landlord and tenant law for 15 years. Emilie Fairbanks, PLLC, has owned her own practice for eight of those 15 years. She explained some of the legal language in the complaint.
Per the complaint, Formant has requested a non-redeemable judgement. “It means that even though a case might be about rent, even if [the tenant] wins the lottery and offers their landlord eight times the rent, they don’t have to take it,” she says. “They can still evict you.” Compare that to a redeemable judgement, “which means if you show up with all of the rent, the eviction stops.”
Fairbanks explains why a commercial landlord might ask for a non-redeemable judgement: “Let’s say they owe $50,000 and they say, ‘We’ll make a payment of $20,000 and we’ll work off this debt,’” she says. “The problem is that they’re in a hole they can really never get out of … The landlord, they can see that. They can see that it will continue to get worse.”
Even if you pay off one month, the next month looms. “If there’s a structural deficit to the business and they’re not ever going to make that up, it’s hard for a landlord to enter into an agreement where they’re going to continue to pay legal fees taking the tenant to court,” Fairbanks continues, commenting broadly on eviction lawsuits, not on the specific situation at 408 H St. NE.
Anu has been applying for various grants and loans to save his business. At the end of May, for example, Anu applied for a loan from Washington Area Community Investment Fund (Wacif). The nonprofit established in 1987 says its mission is to increase equity and economic opportunity in underserved communities in the D.C.-area by investing in low- and moderate-income entrepreneurs.
Wacif’s director of development and communications, Brendon Miller, says there are no real limitations in terms of the types of businesses they support. “We are industry agnostic,” he says. “We’re more interested in the health of the business, but also the strength of the business idea they have.”
The nonprofit also isn’t bound to specific commercial corridors. They grant loans to entrepreneurs across the city, as far south as Ashburn and as far north as Baltimore. In 2018, Wacif did about $1.2 million in lending, up 60 percent from 2017, according to Miller.
Within a matter of days of applying, Anu’s application for a loan was denied. When asked why Anu’s business wasn’t a fit for a loan, Miller provided the following statement:
“Stewardship is a core Wacif value. It informs our approach to lending and advisory services, maximizes the resources available to support underserved entrepreneurs, and helps us protect entrepreneurs from becoming over-leveraged financially. Each of those considerations informed our decision and our commitment to communicate a loan decision to Khepra within 24 hours of receiving all necessary documentation.”
“I’m disappointed by Wacif,” Anu says. “The mission of Wacif, I would be a perfect candidate. Their mission is to help businesses like mine. They should be the equalizer. They’ve helped out people I’ve known for years.”
When Wacif loan officer Amanda Gant declined to give Anu a loan in an email obtained by City Paper, she recommended applying for a Robust Retail Grant—a highly competitive, citywide program through the city’s Department of Small and Local Business Development (DSLBD). Anu says he tried for the grant in 2019, but was not awarded one.
The only monetary support Anu says he received from the city was back in 2018, when he was awarded a Small Business Capital Improvement Grant through the Office of the Deputy Mayor for Planning and Economic Development’s Great Streets Program.
Without additional help from the city or nonprofits, Anu did what stretched small business owners sometimes do. He turned to merchant cash advance (MCA) companies OnDeck, Kabbage, and four others. “The terms are very aggressive,” Anu says. “This is the trap that I fell into—the money that’s going out was greater than money coming in.”
At one point, Anu says, he was paying these companies up to $7,000 per week. According to NerdWallet, MCA loans are quick and easy to get approved but boast high interest rates and repayment schedules that “are often unsustainable.”
A representative from Kabbage tells City Paper, “Small businesses are able to apply, qualify and access lines of credit through Kabbage in 10 minutes or less. Once approved for a line of credit, they can access a 6-, 12-, or 18-month loan for the exact amount they need, when they need it.”
H Street Main Street founder Anwar Saleem has been mentoring Anu and is holding out hope that he and the neighborhood can rally behind him to keep Hempburger Cafe & Juice Bar open. The 400 block of H Street NE has a long tradition of offering healthy food and wellness dating back to the late Brother Kibwe Bey’s business Da Place: Institute of Healing and Happiness.
“It’s important for us to keep small businesses down here,” Saleem says. “There are so many processed food venues. Then you have strong healthy eating places. I think that’s something the city needs. A lot of African Americans who suffered from eating processed food now have a place to reclaim their health. It would be sad to see something like that go. People need to better understand its value.”
While no one knows what Formant wants to replace Anu’s business with should he succeed in court, dramas of neighborhoods losing their character to chain stores and big corporations are playing out throughout the city, often after small business owners invest in the spaces they occupy for a short time. Saleem says, “John [Formant]’s a good guy, but when you own a large corporation like that, sometimes you need to look a little deeper and support something needed in the neighborhood.”