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Carving Up a Slice of Laguna

Zpizza owner Sid Fanarof hasn’t lost his touch, though he may lose his original restaurant location.

Sid Fanarof believes Zpizza’s franchise success was baked into its origin in Laguna Beach, catering for 26 years to a clientele of artists, leftover hippies and locals who appreciate the take-out joint’s gourmet entrees, natural ingredients and attention to gluten-free and vegan appetites.

On the first Sunday of the month over the past two years, the restaurant’s managers bake enough pizzas to feed 60 people and drive them to Laguna’s homeless shelter. Included is one special order, a small Berkeley topped with vegetables for a vegan who lacks an address. They get a standing ovation.

“We built this brand around Laguna Beach,” said Fanarof, a resident, who owns eight of 100 franchises in 17 states, Mexico, Saudi Arabia and Vietnam.

Next month may see the last Zpizza boxed in the Aliso Shopping Center, which is owned by a pension fund. The property manager’s lawyer earlier this month sent Fanarof an eviction notice, terminating his lease effective April 16. Within days, scores of customers such as Mike Brennan and Betsy Jenkins signed a protest petition.

Chase Bank is considering the 1,400 square foot pizza shop location as well as the adjacent similar-sized storefront being vacated by Walsh Flooring for a branch, multiple people suggest.

“We’re being kicked out of our home,” said Fanarof of his original location, where 12 employees daily toss arugula salads with candied walnuts and baste eggplant and feta pizzas with basil pesto.

Fanarof characterizes the situation as a stand-off with an out-of-town property manager that has made little effort to communicate with the center’s oldest tenant.

“He would like to unwrap the circumstances,” rebutted Steve Robertson, a principal of Mill Valley’s Shelter Bay Retail Group, hired to manage the Aliso center beginning in 2008. “It’s not the landlord’s fault he doesn’t have a lease. He didn’t reply to written communication,” Robertson said. “By the time Sid came back, it was too late.”

Chase Bank is looking for locations in Laguna Beach, apparently considering spaces in the Aliso Shopping Center and in downtown.

Though it’s his practice to sign and negotiate leases, Fanarof was unaware of a five-year renewal option in the current lease, which he was required to exercise in March 2010, 15 months prior to the lease’s expiration. “Nobody notified me. Normally the landlord sends a certified letter,” said Fanarof, who instead received a letter of intent for renewal by email last July 11. He said follow-up emails and phone calls last fall went mostly unreturned and terms were never solidified. On Nov. 29 he learned his lease may not be renewed.

“The property manager is not at all cooperative,” echoed Russell Sarkin, who owns Walsh Flooring with his wife Elaine. “I’m packing up. I’m very happy to get out of here,” said Sarkin, who will pay a third less for rent in new digs at Thalia and Glenneyre Street beginning April 2.

While a national bank tenant may burnish the financial statement of an asset manager, Chase’s principal California competitors, Wells Fargo and Bank of America, are in downtown Laguna.

“We’re looking at multiple locations in the Laguna Beach area,” said bank spokesman Gary Kishner in Chatsworth, who declined to describe the progress of negotiations. “Our goal isn’t to come in and displace a business. We’re just told there is a space available.” Prime locations have high visibility and foot traffic, he said.

Chase plans to open 80 new branches in the state this year, including 10 in Orange County, Kishner said.

Enter Heidi Miller, owner of Tight Assets boutique and the Newsstand, both in Laguna’s downtown. In recent months, Miller learned of Chase’s prospecting for locations. She said she met several times with their representatives, trying to dissuade bank officials from considering the shopping center in favor of a larger, vacant Ocean Avenue storefront most recently occupied by Sirous & Sons Rug Gallery. It was the former home of Laguna Federal Savings.

“I told them if they went into the center, they wouldn’t be starting out on the right foot; when they go to get approval, all hell will break loose,” predicted Miller, who conceded she is also motivated to help a friend and lure a high profile tenant near her own businesses. “We would be losing not only the best pizza in town, but a good solid citizen,” Miller said of Fanarof’s plight.

Though Robertson would like to retain Zpizza as a tenant, he said there are no current vacancies in the center. Relocating anywhere in Laguna would exact a steep price in building to code and intensified parking requirements, Fanarof said. “We’re open to a solution,” he said.

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