Things are heating up over frozen treats near the corner of Sunset Boulevard and Hyperion Avenue in Silver Lake. With the recent opening of Salt & Straw on Friday, April 7 — just 150 feet away from 17-year-old neighborhood staple Pazzo Gelato — a David versus Goliath narrative is emerging on Twitter and Instagram among the gelato shop’s dedicated patrons and community stakeholders, with people questioning why a large chain like Salt & Straw would open so close to a longstanding operator selling a similar product. Rumors have circulated about lease agreements, non-compete clauses, corporate bullying, and more, further raising the stakes along Sunset. Eater LA reached out to Michael Buch, the owner of Pazzo Gelato; Kim Malek, the co-founder and CEO of Salt & Straw; and the building’s landlord regarding the complex situation.
Pazzo Gelato’s lease is at the heart of the matter. After 17 years of operating at 3827 Sunset Boulevard, the business will vacate the current space when its lease ends in 2025, Buch tells Eater. In spite of numerous requests to the building management company (Specialized Realty) to extend the lease, and even a personal letter that was written to the landlord asking for a meeting to “explain what my value is and what my ties are to the community,” Buch says that he has been denied the option to renew it.
Buch, a lifelong Angeleno and a Silver Lake resident for 23 years, learned of Salt & Straw’s impending arrival about six months ago when construction began at the former Forage address a couple of doors down. Baffled by the landlord’s unwillingness to extend his lease, Buch believes (but does not know for sure) that certain terms exist in Salt & Straw’s lease agreement that prohibit competition. “My assumption, because I don’t know why the ownership wouldn’t want me to stay otherwise, is that Salt & Straw came in and said, ‘We want an exclusivity use or non-compete,’ and that maybe the management said, ‘Well, these guys are here for two years. But we can sign something that says once they’re gone, we won’t put anyone else in,’” he says. “But I don’t have any proof of that.”
Salt & Straw, the ice cream company from Portland, Oregon founded by Malek and her cousin Tyler in 2011, opened its eighth LA store last week at 3823 Sunset Boulevard. The brand operates 30 stores in Oregon, Washington, California, and Florida. In response to the controversy over the newly opened Silver Lake location, Malek sent Eater LA the following statement: “We do not have an exclusivity that would prevent the landlord from renewing Pazzo’s lease when it expires two years from now, although we were under the impression the owner was eager to leave or at the least to sublet to another tenant after he approached us a couple years ago to take over his lease. As a family-owned small business owner myself, I am entirely supportive of shops like Pazzo and would wholly embrace their continued presence in the neighborhood. We believe in providing options to residents and giving them choices.”
Albert Karchikian, the director of sales and leasing at Specialized Realty in Glendale, confirms Salt & Straw’s assertion regarding the exclusivity clause. He sent Eater LA the following statement on behalf of the building’s owner: “We have not been in active conversations with Pazzo Gelato about renewing their lease, as they still have a few years left on their term. [Buch] has, however, been actively communicating with us for many years now about his desire to exit this location and has, along with his agent, presented multiple options for new tenants to lease his space. The issues facing Pazzo Gelato and discussions around their lease have been ongoing long before this past weekend. Contrary to the current narrative, those issues have nothing to do with Salt & Straw’s recent arrival, and they do not have exclusivity that would impact our conversations with Pazzo Gelato. We look forward to proactively working with our tenants on an ongoing basis.”
Buch confirms that he “tested the market” by soliciting potential tenants to sublease his space during the height of the pandemic. “I was just curious — ‘What is my profit? What is my business worth?’ — because I was concerned. I don’t know if I can survive another pandemic,” he says.
For now, Buch is heartened by the community’s support and is further amplifying his message on social media. The shop hosted a 17th-anniversary celebration this past weekend offering scoops for $1.70; lines snaked down Sunset Boulevard in response, and in the days that followed some on social media have called for a boycott of Salt & Straw. While it’s still unclear whether Pazzo Gelato will be able to extend its lease in 2025, Buch continues to operate the store while scouting potential spaces for relocation if needed. “I want to stay and let customers choose where they want to go,” he says. “My product is much different from theirs.”