SF mayor sets 60 days for Castro coffee, nail salon negotiations

San Francisco Mayor Daniel Lurie set a 60-day timetable for good faith negotiations between the two businesses flanking the Castro Theatre and the building’s owners and managers, according to one of the business owners and the neighborhood’s supervisor. The news comes as electrical work on the renovation project at the theater begins on Castro Street, and the venue begins booking events for 2026.

Ken Khoury, the proprietor of the Castro Coffee Co. at 427 Castro Street, stated to the Bay Area Reporter on July 8 that Lurie “suggested a 60-day negotiating period in good faith.” Ken’s brother, Riyad Khoury, owns the Castro Nail Salon at 431 Castro Street, on the other side of the theater. The historic movie palace is owned by the Nasser Family and, since 2022, is managed by Another Planet Entertainment.

As the B.A.R. first reported, the Khoury brothers, both straight allies, said they had till June 30 to vacate their spaces because their leases were not renewed by the Nassers. As of July 1, APE began subleasing the three-unit building that includes the theater and the two storefronts, the brothers say.

Yet, as of that date, both businesses were still open, and neither had been served with an eviction notice, Ken Khoury told the B.A.R. He added he’d already paid his rent for July, and that Lurie and gay Board of Supervisors President Rafael Mandelman were involved in the negotiations.

Reached for comment, a Lurie spokesperson referred the B.A.R. to Michelle Lynch Reynolds, programs and communication manager for the Office of Small Business. Reynolds didn’t return a request for comment. 

Mandelman stated the request came directly from the mayor, who marked six months in office July 8. 

“The mayor asked for it, and the parties agreed, and I am grateful for his engagement,” Mandelman stated. 

Despite a report to the contrary in the San Francisco Chronicle, neither the coffee shop nor the nail salon had been served with an eviction notice as of July 8, according to both Ken Khoury and APE spokesperson David Perry, a gay man. The daily paper had reported July 7 that outside programmers, such as the LGBTQ international film festival Frameline held each June, have been contacted by APE about returning to the Castro Theatre next year.

The Nassers didn’t return a request for comment. 

APE has insisted it will not be a landlord to the Khourys' businesses. The events and concert promoter also initially disavowed involvement in the lease situation, saying that it had no plans for the space and the matter was between the brothers and the Nassers. Later, however, the company changed tact, telling the Chronicle that it wants to use the spaces for an expanded box office. The theater is slated to reopen by March. 

The B.A.R. also first reported that, according to city officials, because it is a legacy business, the city will have to approve any expansion of the theater into the nail salon’s space. The coffee company was not eligible to be a legacy business.

Electrical work started
The theater’s 2026 reopening will come at the end of a multimillion-dollar renovation and restoration project by APE, which is converting the theater into a multi-use space. Currently, electrical upgrades are taking place Sundays through Wednesdays until mid-August, Perry stated to the B.A.R. The work started July 6.

“Circumstances could change that alter that schedule,” he added. “Electrical upgrades are taking place to accommodate the new state-of-the-art ventilation system that had not previously been installed in the theater as well as additional power for the projector booth, film equipment, and theatrical lighting, as well as additional power for ADA equipment and new green room.”

The work will be between the 7 p.m. and 4 a.m., and there will be no work Thursdays, Fridays, or Saturdays to avoid impacts to nightlife, according to Castro Merchants Association President Nate Bourg, a gay man. Street closures are not expected, but the work does involve trenching across Castro Street to an underground vault at the bus stop next to the SoulCycle building adjacent to Harvey Milk Plaza.