Eviction may shut down Mike's Diner Bar after 29 years in Palo Alto

PALO ALTO, Calif. - Mike’s Diner Bar in Palo Alto says it’s being evicted after being one day late paying rent. The Diner has been there for nearly 30 years and now the owner of the property is speaking out about why they decided to move forward with an eviction.    

Longtime customers like Paul Jackson Jr. say they’re saddened that Mike’s Diner Bar may be closing. 

"It’s like cheers. You can come here; you can be yourself and just enjoy the environment," Jackson Jr. said.    

Mike Wallau, who owns Mike’s Diner Bar, says he remodeled the diner in 2019, spending about $2 million. He says his rent of just over $22,000 was due July 17, but a family emergency kept him from dropping off the check on time.  

"So, I made it on Tuesday the 18th, and I was informed that afternoon we received your check, we’re sending it back, and you’re being evicted. So I was pretty surprised by all of that," Wallau said.   

Wallau admits he’s had some financial difficulties in the past and worked out an agreement with Scher Holdings, who owns the building. After decades of serving the community, Midtown Residents Association and Fairmeadows Neighborhood Association partnered to show support for Mike’s Diner Bar. They’ve started a petition and plan to ask city council for support.  

"This is a transaction between two private parties, so it’s really hard for the City to get involved. But we are also looking to recommend mediation if the two parties are willing to do so," said Lydia Kou, Palo Alto mayor.   

"We’d like to sit down and try to mediate. We try to find some way to work this out but at this point, they don’t have a seat at the table. They’re not talking about it," said Len Filppu, with Fairmeadows Neighborhood Association.    

Scher Holdings LLC did talk to KTVU saying the eviction isn’t just about one late payment and also said in part:  

"We have been having problems with Mike continuously over the last 15 years. Mike has habitually paid rent late, bounced many checks, and not paid rent checks only to ignore calls made to him to pay. Eventually he would pay late." – Edward Scher, Scher Holdings LLC 

"The rent kept going up during the remodel, during COVID. It just kept going up and up, so I don’t think another restaurant would want to come in here to pay this much rent. It’s very difficult to survive," Wallau said.   

Wallau says he doesn’t have a plan B for Mike’s Diner Bar if he’s evicted, but he does have an attorney to fight the eviction. Scher also told me he doesn’t have plans to develop this property. He just wants a tenant who will meet the obligations of the lease.