Pepe's seeking new spot
Rio moving a few doors down
Pepe's Mexican Restaurant, a popular downtown restaurant since 1992, is seeking a new location after its lease was not renewed.
Jose and Arecelia Chavez bought the building in 1990 and lived in the back while getting started, then opened a Mexican bakery in 1992 in the front. Eventually, they expanded into a full Mexican restaurant and stopped doing the bakery side of the business.
In 2005, the Chavez family sold the building to the New York City Sub Shop and relocated to Bend for two years. During that time, the Sub Shop owner sold the building to the Madras business group BLM Properties, and when Pepe's returned to Madras in 2007, the Chavezes leased the building from BLM Properties.
As the renewal of Pepe's lease was coming up at the end of September, there were discussions with property manager Donna Fisher, who handles the building for Lofting, about a rent increase and "building issues" the Chavezes wanted fixed.
"There was a rent increase because (the BLM managing partner) said his insurance and taxes went up and they were serving alcohol now," Fisher said.
They had been unable to come to an agreement, and the Chavezes were caught off guard when they learned that their lease was not going to be renewed.
"We only had 25 days of notice. Everyone has the right to say who they want to be on their property, but this doesn't give us enough time to move," said the Chavezes' daughter Gladys, who works at the restaurant with her parents and other family members.
Arecelia Chavez, who does most of the cooking, commented, "The customers here are like my family. I'm hurt, but there is nothing I can do."
Gladys Chavez said they have been searching for a place to relocate, but so far, haven't found a suitable spot.
They said a restaurant spot in the South Y Complex required modifications to the grill hood exhaust system, which made it cost-prohibitive.
They also looked at purchasing the former Ice Cream and More (a converted service station building next to Ahern's), and a space in the Papa Murphy's complex, but said both required too much money to raise on short notice.
"We're here not to get rich, but just to pay our bills. And to be happy. We enjoy seeing the customers' faces when they enjoy our food," Grace Chavez said.
In the meantime, Fisher confirmed that Rio Distinctive Mexican Cuisine will be moving into the Pepe's location.
"Rio has signed a lease to rent the new location at 221 S.E. Fifth Street," Fisher said.
Rio chef/owner Roberto Cardenas, whose restaurant is just three storefronts south of Pepe's, said the new location isn't much larger, but that's not why he's moving.
"We couldn't renew our lease here and have been looking for a place to move. We plan to be in by Oct. 1," Cardenas said, noting they expect to only be closed one day for the move.
Of the Pepe's business, Cardenas said, "I really feel for them. I don't know the particulars of why their lease was not renewed. We wish them good luck and will see if they find a better location for them."