Cat Cafe Faces Pandemic Legal Battle

Kittea, one of the first of its kind in the Bay Area, battles COVID-19 and its landlord.

Kittea is something of a sanctuary — for cats and humans alike. One of the first of its kind in the United States, the cat cafe fosters rescue felines from local shelters, and invites people to its lounge to play with kittens, sip tea, and even adopt a new furry friend. 

Like most small businesses in the COVID-19 era, Kittea has faced its fair share of hurdles: dives in revenue, struggles to secure grants and loans, and a monthly rent just shy of $10,000. On top of it all, Kittea needs to care for about 18 resident cats, feeding them, grooming them, and making sure that they’re happy in the apocalypse.

But the cats have been the least of Kittea’s problems. Recently, the cat cafe finds itself embroiled in a legal battle with its landlord, Wilfred Hsu, who believes Kittea is entitled to pay through an optional five-year lease extension — about $500,000. According to a letter shared by Hatt, Hsu has indicated through his lawyer that he would accept the surrender and transfer of the business as a form of payment.

Kittea on 55 Page St. Photo courtesy of Google Maps

“It’s typical 2020,” Courtney Hatt, the founder of Kittea, says. “Just one bad thing after the other.” 

The dispute rose when Hatt tried moving Kittea out of Hsu’s space to a cheaper location on Valencia Street. She originally signed a five-year lease in 2014 that ended in December 2019. The contract had a five-year optional extension, but Hatt says that when she sent a letter of interest, she was told that actually renewing the lease would require more steps. Hatt thought that meant the optional five-year extension was not executed, and Kittea was on a month-to-month lease instead.

But after turning in her 30-day notice, Hsu’s lawyer says that Kittea has a legal and financial obligation to pay the remainder of rent for the extended lease term. 

“We’re already vulnerable,” Hatt says. “We can’t stay in his space because it’s too expensive. He never offered to negotiate with us.” She took to Facebook to find a pro-bono lawyer.

Hatt has chosen not to lay off or furlough her employees for as long as she can. As a result, she hasn’t paid herself in three months. Raising dozens of cats can be very expensive, and loans and grants haven’t been too useful. Hatt says she wasn’t able to secure any from the city, which was a particularly disappointing realization to her. “You can’t depend on the city to help you,” Hatt says. “What’s sad is that we were a really sustainable, positive business that did good. It’s a shame that we had felt neglected.”

The PPP loan Kittea received lasted less than three months, and it was a hassle to obtain in the first place. When Hatt tried reopening Kittea in June for limited numbers of customers, hoping to get about eight paying customers per hour, only two to four came a day, falling quite short of their goal.

Photo courtesy of Kittea

What has been helpful however, is the community response Kittea received on Facebook. Back in March, Hatt created a GoFundMe for Kittea, which has since exceeded its $40,000 goal. The money raised has also helped Kittea rescue about 50 cats from shelters to prevent overcrowding. In the Central Valley, spay and neuter services were temporarily paused because of the pandemic, leading to many “oops’ litters” of kittens and puppies.

It’s been surprisingly easy for Kittea to find homes for the cats they’ve taken in, both thanks to the online community the cat cafe has nurtured and the massive demand for pets that’s grown since the pandemic started. More and more people are fostering or adopting animals, presumably to stave off the quarantine isolation (though the trend hasn’t been without its own set of troubles). That’s at least one silver lining to 2020, Hatt says. They’ve been having even greater success finding foster or permanent homes for cats now compared to pre-COVID times.

But adoptions alone won’t help Kittea survive the pandemic, especially as it tries to feed and shelter its permanent resident cats who call the cat cafe home. 

Perhaps if Kittea were just a regular, non-cat cafe, Hatt would consider parting ways. 

“But because we have cats, and I really believe in this — it’s not an easy thing to walk away from,” Hatt says. “I still have hope.”

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