A renovated, century-old building that has contributed to the Highland Park neighborhood’s revitalization is losing tenants over a landlord-tenant dispute publicized by one of the building’s small businesses.
Nicole Nayima, owner of the Black Sheep Craft Shop at 3523 Sixth Ave., said in a video posted to the shop’s Instagram account Friday, June 26, that her business’s recent closing is the result of property tax increases passed on to tenants in the form of a large and unexpected rent hike. Already closed is a plant shop, Art Terrarium.
Nayima’s sister, Jamie Nicolino, owner of sustainable living shop The Collective, says she will leave when her lease expires next year. Bethany Fast of The Little Book bookstore, the building’s other commercial tenant, declined to share her plans.
Nayima alleges her landlord, Joe Cordaro, breached her lease. He is suing her for failure to pay rent.
In an interview with the Des Moines Register, Nayima said her total rent went from $1,600 per month to almost $2,000 in March.
Cordaro, a local developer, owns the property through 3523 6th Avenue LLC. He said tenants should have expected the tax increases because of an increase in the assessed value of the property, which underwent significant renovations in 2021. At the time, Cordaro’s company called the building, originally a bank, an “anchor for a historic district” and warned it could soon fall into disrepair if not renovated.
“The tax bill changed and that’s really all there is to it,” Cordaro said, speaking from Paris, where he serves as a U.S. diplomat. “There’s no profit motive for me in the tax adjustment. There’s no markup, I’m simply a pass-through. The bill payable in 2025 is higher than the bill payable in 2024, and that’s driving the adjustment.”
Cordaro said the lease Nayima signed, a template he uses with minor adjustments for all his commercial tenants, explains the tax hike clearly.
Nayima’s lease, obtained by the Register, commenced March 1, 2025, and is supposed to run to 2028. The second page explains that an “additional rent” comprised of Nayima’s share of building operating expenses, insurance and real estate taxes began at $6 per square foot before adjusting annually. Nayima’s bill for that share of the rent rose this year to double that, Cordaro confirmed.
“It does say it’s going to be adjusted annually,” Nayima said. “It doesn’t say that the $6 per square foot listed is based on an old and no longer applicable property value.”
Tenants say increase came without warning
The assessed value of the historic building at Sixth and Euclid avenues, which determines property taxes, spiked in 2023 to $940,500 compared to $56,600 two years prior. The increase in value reflected million-dollar renovations toward which the city agreed to provide $534,012 in tax-increment financing.
By 2025, the building had gone from being the vacated former home of the Highland Park Country Club bar to the site of four women-owned small businesses in the heart of one of the city’s hottest emerging business districts.
With the change in value came a change in property taxes. According to tax records, the building’s bill rose from $4,014 in 2022 to nearly $42,000 in 2023. That change could be expected as a result of any renovation in the city, Cordaro pointed out. But tenants said they didn’t see it on their balance sheets until this March.
“This year, we have these huge increases,” said Nicolino, of The Collective. “But according to the public record, it would seem that maybe those should have come sooner. That’s a question that we’re all asking.”
Cordaro said the building’s billing cycle answers the question.
Tenants reimburse his company for the previous year’s building expenses, he said. Since the 2023 tax bill was paid in two installments spread between 2024 and 2025, the initial hike in taxes could be “absorbed through management” until the tenants began paying 2025 building expenses this year, he said.
The sisters, Nicolino and Nayima, said they pressed Cordaro for answers on the accounting behind the jump and were dissatisfied with his responses. Nayima said the additional rent was “misrepresented.”
Cordaro acknowledged he didn’t explicitly warn them of the coming increase, but pointed to the lease provision concerning annual adjustments for operating expenses.
“Did I call them and say, like, ‘Heads up’?” he said. “I didn’t. But I assumed Nicole had done her due diligence. It’s not my job to run your business.
“They’ve made up their minds about things and then been very public about it,” he said. “I believe that legally our lease is pretty well-crafted and fully discloses who pays what, and so I don’t think the other alternative — being a dispute through the courts — was the right way to go. I think it’s silly.”
Tenants, landlord dispute building conditions
As the calendar flipped toward summer, tenants at 3523 Sixth Ave. made ominous announcements one by one.
First, Art Terrarium announced in an Instagram story post it would close indefinitely May 1 “for the safety of our staff.” A former staff member, Kayli Nartatez, shared photos with the Register that appeared to show mold growing above the baseboards of the store May 5.
On May 29, Black Sheep announced its planned closure. And on June 6, the annual Northside Market, a one-day arts and crafts event in Highland Park with dozens of vendors signed up, was canceled. Nicolino was organizing it with Fast of The Little Book. Nicolino said she and Fast simply did not have time to organize the market once their dispute with Cordaro began in the spring.
“You can’t very well plan a neighborhood event if the future of your business is at stake,” Nicolino said.
Nayima said she, too, had issues with the building’s condition. The street side of her space would flood periodically after heavy rains, she said, and recently she felt a drop of water from the ceiling on her shoulder during a nighttime rainstorm.
Cordaro said some issues can be expected given that the building is 109 years old.
“Do things pop up? Of course,” Cordaro said. “But we maintain them. If it was unaddressed, there would have been a code violation.”
According to emails Cordaro shared with the Register, no such violation was found when three city inspectors visited Art Terrarium May 13.
“There do not appear to be any violations on site that we would take enforcement against,” neighborhood inspections administrator Dalton Jacobus wrote in a May 14 email to Art Terrarium that he later copied to Cordaro.
‘They’ve decided that I’m the bad guy, and it’s frustrating’
In the course of disagreements about the Highland Park building’s accounting and upkeep, the tenants said, they have lost faith that their relationship with their landlord can be repaired.
“The increase in taxes made it less feasible to run my business,” Nayima said. “I can’t hire employees, I can’t expand hours. And Joe has shown me that this is not feasible to continue with this business partner. This is really more about Joe than anything else.”
Nicolino said she will not extend her lease at the building. It expires in April 2027.
“The (Northside Market) was very successful,” Nicolino said. “Our businesses are doing well. We were not the issue. Art Terrarium was trying to extend their lease. I was hoping to extend mine, but I’m not going to stay in a building with this happening.”
Fast, of The Little Book, said she couldn’t share specifics of her lease or her interactions with Cordaro. Nayima’s lease prohibits publicizing of its terms without Cordaro’s written consent.
Cordaro said he’s being smeared publicly for upholding the terms of the lease.
“We’ve always had a good relationship,” he said. “And now, because of the property tax bill, they’ve decided that I’m the bad guy, and it’s frustrating. They’re characterizing this, as you know, some big corporation versus these small landlords, and it’s not a correct categorization. I’m a small business owner myself. I grew up in Highland Park, that’s my neighborhood. I redeveloped this property because I used to walk by this property on my way to school when I was a kid.”
Cordaro, also the principal at the West Des Moines-based Benchmark Real Estate Group, said he has heard vocal, negative responses from community members on social media and by phone since Nayima’s Instagram post.
Cordaro shared a voicemail left at the realty office in which a caller, who said she is a local activist, accused him of doing “illegal work,” then cursed at him.
He confirmed he intends to sell the building, listed since April 13 for $1.8 million. He bought it before the renovations for $372,840 in 2021, property records show.
Nayima, who works full-time as an attorney, said she’s privileged not to have to rely on her business as her livelihood. She doesn’t believe she’ll open again at another location.
“I’ll continue to sell online as long as my inventory lasts,” she said. “This has been a passion project for me. The space next to my sister was a lightning-in-bottle moment; it was part of the magic.”
Neighborhood representatives mourned the downward spiral of a distinctive retail cluster — women- and queer-owned — that brought life to a formerly vacant neighborhood landmark.
Max Garcia, president of the neighborhood association representing Highland Park and Oak Park, said in a Facebook comment on the situation Friday that the community of businesses is a “cornerstone of our neighborhood.”
“We are aware of this and are keeping tabs,” Garcia wrote. “This is a huge concern for us. I’ve been in conversations with Bethany (Fast) and we’re waiting for instruction on how we can throw our support behind these businesses in an effective way. Our small businesses are essential to our thriving neighborhood.”
Des Moines City Council member Linda Westergaard, who represents the neighborhood, agreed in a statement that the small businesses at 3523 Sixth Ave. have been key to the area’s renewal. But she said the city’s hands are tied in the circumstance of a private property dispute around a commercial lease. She told Cordaro privately in an email he provided that the “accusations being made on social media are absolutely ridiculous.”
The first hearing in the lawsuit between Cordaro and Nayima is scheduled for Tuesday, June 30.
Staff writer Kate Kealey contributed to this article.
Israel Schuman covers retailing and jobs for the Des Moines Register. Reach him at ieschuman@registermedia.com.
This article originally appeared on Des Moines Register: Landlord-tenant spat at center of Highland Park’s retail losses
Reporting by Israel Schuman, Des Moines Register / Des Moines Register
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By Israel Schuman, Des Moines Register | USA TODAY Network
