After a lengthy landlord dispute, Retro Row’s iconic Portfolio Coffeehouse is moving

Thirty-two years ago, Long Beach’s Retro Row wasn’t what it is today—chock full of vintage clothing shops, restaurants and record stores—but Kerstin Kansteiner had a vision for the southeast corner of Fourth and Junipero.

What began in 1990 as an art gallery that served coffee turned into a coffeehouse that exhibited local art, then an internet cafe, and, eventually, Portfolio Coffeehouse became the center of community in the up-and-coming neighborhood. But now, the longtime anchor of Retro Row is moving.

“As I write this, I reflect on all those years, and all those memories,” Kansteiner wrote last week on Facebook in a farewell message to her loyal customers. The beloved neighborhood institution will be reluctantly closing its doors on July 24 and reopening this fall in a new location a couple of blocks away.

“It was not our wish or desire but the landlord has other plans for us,” Kansteiner wrote.

On July 31, Kansteiner’s lease will end following a four-year legal dispute with her landlord over what she argued were unfair rent increases that ultimately ended up costing both sides more than $200,000 combined in legal fees.

Things hadn’t started out this way. Kansteiner and her landlord, Michael Salemi, got along well for quite a while.

“The relationship was great,” said Salemi, “I would pretty much do anything for Kerstin.”

But things began to deteriorate back in 2011. According to court documents, one of the first disagreements occurred while Salemi was going through a divorce and Portfolio would not sign a certificate he sought to help ensure he kept possession of the building. Additionally, Salemi claimed Portfolio’s kitchen and electrical work were not up to code following a major renovation in 2013 and it had become a hazard to the building. Kansteiner felt like she had been taken advantage of after pouring work and resources into the renovation that included installing new flooring and kitchen equipment on top of ADA-compliant bathrooms and doors.

This all came to a head in 2017 when Portfolio was seeking to extend its lease another five years, which would’ve locked in its current rent structure. Kansteiner said she left a signed notice extending the lease in the mailbox outside of JMS Development’s office behind Portfolio on the day the contract was set to expire. She said she’d used this method to extend her lease several times in the past, but this time, she started noticing unexpected rent increases.

In court, Salemi’s company, JMS Development, said language in the most recent lease agreement was different from the others and this time, they specifically required a timely “personal receipt” on any lease extension.

According to legal documents, Kansteiner left the signed notice to extend Portfolio’s lease between 6:15 and 6:30 p.m. on July 31, 2017, but since there was no one at the office after 5 p.m. that day, Salemi claimed that the note was not “personally received” until the following day, meaning that they had missed their deadline and the resulting rent increase of 5% was lawful.

Kansteiner and Salemi attempted to resolve their differences over email and through informal conversation but “when push comes to shove, you have to go back to the signed contract,” said Salemi.

Despite both parties saying they never had any intention of Portfolio leaving, the arguments, a cease and desist letter, the disputed notice and ensuing rent increase ushered them down the long—and expensive—path toward division.

Throughout the pandemic, Salemi says he raised the rent twice in order to offset some of his legal fees and Kansteiner says she continued to pay in order to ensure that her staff could continue working. The legal battle ended last June and cost Kansteiner and Salemi over $240,000 combined.

In the end, they reached a settlement that ensured Portfolio’s lease would be extended until July 2022 and their rent would be covered for the next 12 months, helping Portfolio recuperate some of the money lost during the lawsuit.

Portfolio’s absence will leave big shoes to fill on the historic corner, but Salemi has big plans for a $100,000 renovation and is already sorting through popular restaurant groups that are pursuing the space, he said.

Kansteiner, meanwhile, has big plans of her own. The change is something the community should be excited about, she said. “That’s the kind of story of Portfolio.”

Coming this fall, the new and improved Portfolio will be reopening on Cherry Avenue just south of Fourth Street in a move that will merge the coffeehouse with Kansteiner’s second business, Berlin Bistro, which will relocate from its current location near Downtown.

“This will be Portfolio and then some,” said Kansteiner. “The same great baristas, the same service plus an amazing kitchen and a lot more outdoor seating.”

The new place is larger in square footage than both Portfolio and Berlin Bistro combined. It will be open in the morning and early afternoon, as usual, before transitioning into dinner service in the evening with a fresh and innovative menu brought by Chef Rob Fry.

For Kansteiner, one of her biggest priorities during the shift was ensuring that her staff would be well taken care of.

“We have employees that have families and have literally been with us for 20 years. We couldn’t imagine giving them a pink slip and letting them go, especially during the pandemic where nobody knew what was happening,” she said.

As for Berlin Bistro, which she opened in 2011 with friend and business partner Rand Foster, who owns the neighboring record store Fingerprints, it will stay open until the new Portfolio concept opens its doors this fall. Its vacancy will quickly be filled by another restaurant business that Kansteiner is working to solidify.

“It’s a sad goodbye … but we’ve weathered all the changes,” said Kansteiner, saying farewell to the place the community has called home for over three decades.

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Laura Anaya-Morga is a general assignment reporter for the Long Beach Post.
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