Landlord, longtime restaurant operators at odds over who ‘owns’ the name
The owners of the property at 25861 Railroad Ave., which has been home to The Original Saugus Cafe since 1952, announced Tuesday that new management would be restarting operations at 5 a.m. Jan. 16.
But will it “be” the Saugus Cafe? That is the crux of a dispute between the longtime operators of the business and their landlords, owners of the building the cafe has occupied for the past half-century.
The family that has been operating The Original Saugus Cafe didn’t have a problem with new management restarting cafe operations in the same space, but they said that, as owners of the Saugus Cafe business and name, they should be compensated for their part of the business and its legacy, which stretches back nearly 140 years.
Now a dispute over the Saugus Cafe name is prompting the Mercado family to send a cease-and-desist letter through their attorney Steffanie Stelnick on Tuesday, letting the landlords know they are not planning to close the business.
News of the pending closure from L.A. County’s longest continually operated restaurant has sparked rumors about the situation for months and created lines around the block for several days prior to Sunday’s “closure.”
Neither side agrees exactly on how everything went down, which could pit the family of the man who worked his way up from bar keep to restaurateur against the heirs of a powerful former assemblyman who had significant holdings throughout the region when he died Aug. 1 at age 97.
Larry Goodman said he manages multiple properties for the Arklin family and he tries to keep his tenants in there for as long as he can, with a client list that includes major corporations like Burrtec Waste Industries, as well as property owners who’ve been with him “for decades.”
Jesse Mercado, daughter of Alfredo Mercado, who has run the restaurant for decades, said Tuesday the family got the short shrift before their lease ended, and now they’re not being compensated for the business name, which is why there was so much “confusion” about what was happening in recent weeks.
Mercado said the situation for the family changed after the death of Hank Arklin Sr., a former assemblyman who had significant land holdings.
Previously, Jesse’s father, Alfredo Mercado, and Hank were on great terms, she said in a phone interview, describing their lease situation as more of a verbal agreement between “great friends,” adding they were “always on great terms.”
When Arklin died Aug. 1, the Mercado family was presented with a new month-to-month lease in September that “didn’t seem fair on our end,” Mercado said, mentioning costs “like cleaning our furniture, utensils, things like that, and they wanted a percentage of our movie (filming) sales when it was never like that before in the past.”
She added that the new lease also included hostile terms that stipulated physical property — things like dishes, utensils and cooking equipment — would thereafter be the property of the landlord, not the Mercados.
Mercado said the family was told that, if they didn’t like it, “you can pack up your things and go.”
She said the family was having a difficult time making the monthly rent as it was, and when presented with a rate increase with the new contract, there were some difficult decisions that had to be made.
“We said we wanted to sell the business,” Jesse Mercado said, recalling the events. “At first, (Goodman) was on board with it. He supposedly found somebody that was interested in buying.”
Mercado said they began to tell the community that her father was retiring, and rumors began to circulate in the community around that time that “The Original Saugus Cafe” would be no more.
Jesse Mercado said that, at this point, Goodman changed his tune toward them and became upset at them because “the media got involved,” recalling her conversations about it. She said Tuesday she still didn’t understand why that was an issue.
Goodman said he was the one who had “to make all the hard decisions,” after having several conversations with the Mercados. He would have been fine with them staying there, he said. He tries to keep his tenants in and had no animosity toward the family, he said Tuesday.
According to Goodman, Alfredo Mercado told his landlord initially that his family didn’t want to keep the restaurant, then changed his mind approximately three weeks ago and wanted to keep it and then changed his mind again.
“I said, ‘Fine,’ then I got out and got someone to take it over,” Goodman said.
Goodman said he ended up contacting Eduardo Reyna, the current operator of Dario’s on Camp Plenty Road in Canyon Country, with whom he had developed a friendship over the years.
Goodman and Reyna confirmed plans to meet Wednesday when the new keys would be handed over, but Reyna also said he had yet to complete the preparations for his new kitchen.
Goodman disputed any claims that the Arklin family didn’t own the name, when asked about the Mercado family’s claim of their intent to sell the business.
“They don’t have nothing to sell. I own everything,” Goodman said with a chuckle. “We own the cafe. We own the building. The stove. The dishes. The forks. We own everything in there — the Arklin family, which is North Valley Construction.”
While property records indicate the physical property has been with the Arklin family for decades, there may still be a question about the restaurant’s intellectual property.
Jesse Mercado said Tuesday that, when her father purchased the restaurant, it had a slightly different name, The Olde Saugus Cafe, according to records online, and it was facing significant debt. The articles of incorporation for that name were suspended by the state in 2001.
The old owner signed off on the name change to The Original Saugus Cafe, she said, which the previous owner had to approve because it was so similar. That was how her father became involved in ownership of The Original Saugus Cafe name.
Business records available online indicate The Original Saugus Cafe was formed under the name of Gaye Libby — described in a 1998 media report as a longtime waitress who bought The Original Saugus Cafe with a “longer-time former bartender,” who was the elder Mercado. That filing was listed as possibly suspended in 2013, suspended in 2014 and then listed for a legacy amendment. (There are no records available online for the first filing of “Saugus Cafe” as Saugus Cafe Inc., which happened in 1964.)
Mercado refiled the name as a single-member LLC in October 2020. The filing was listed as suspended in 2021, and then a statement of information under the same name and number was filed by Alfredo Mercado — dated Monday.
Goodman said Tuesday he has a filing scheduled for the name with the state of California.
When asked if the restaurant would open under a new name Jan. 16, Goodman said:
“No. It’s going to be the Saugus Cafe. It’ll be ‘The Original Saugus Cafe’ … or the old, I don’t know, ‘The Old Saugus Cafe’ — I don’t know, but it’ll have Saugus Cafe on there.”
