Korean-American merchants face hurdles in rebuilding after Baltimore riot


June 13, 2015

The charred remains of Grace Lyo's store in Sandtown attract plenty of attention these days. Neighbors stop to offer hugs and sympathy. Someone driving by asks if it happened during the riots -- it did -- and says he's sorry.

And a passer-by on a recent morning tells her not to bother rebuilding: It will just burn again if the police officers charged in the death of Freddie Gray are not convicted.

"Where are you from?" she angrily asks the man, who refuses to tell her.

Lyo emigrated from Seoul, South Korea, and lives in Howard County, but she takes a proprietary interest in Sandtown, where three of her four stores are located and where she is known as "Mama" and "Miss Grace." Lyo vows to rebuild her burned-out store at Mount and Baker streets, and even wants to expand it by buying the house next door.

"I am Sandtown neighbor," Lyo says proudly. "We are just like family."

These days, that family is going through tough times. Of the 380 businesses looted or damaged in the April rioting after the funeral of Gray, 25, who was arrested about a block from Lyo's store and suffered a severe spinal cord injury while in police custody, about 100 are owned by Korean-Americans.


Grace C. Lyo, Ellicott City, owner of Hae Tteuneum Market, gets a hug outside of her store from Loretta Fulton, a Sandtown resident. The store, whose name is "Sun Rising," was burned in the rioting after Freddie Gray's funeral. Gray was a customer of the store. Lyo plans to reopen and hopes to expand. (Kim Hairston, Baltimore Sun)

Many have reopened and most owners want to rebuild despite having sustained as much as $500,000 damage, according to the Korean Society of Maryland, which has been trying to help. But some owners are struggling to come up with the money to restock shelves; others are considering whether to simply close their doors.

For 23 liquor stores, rebuilding comes with added hurdles. Although the state has adjusted its policy to provide interest-free loans to those businesses, city officials have taken a harder line. The city is withholding such loans from liquor stores that have been targeted for closure because they do not comply with current zoning rules -- a move that has angered owners.

Those stores, which are located in residential neighborhoods, will be asked to sell something else or relocate to an area zoned for alcohol sales, mayoral spokesman Howard Libit said. "We want to help them rebuild in a way that conforms to the neighborhood they're in."

Some businesses run by Korean-Americans have filed notices that they intend to pursue legal claims against the city for damage sustained in the rioting. The merchants say the city did not do enough to protect their businesses.

City Solicitor George Nilson said he did not know how many notices have been filed -- claimants have to make their intention known within 180 days of an incident -- but businesses would have "a steep burden" in proving the city was responsible for the damage.

"They would have to show their injury was caused by the city failing to take some action or exercise some authority it had but that it didn't take, and that failure caused their injury," Nilson said.

The Baltimore Development Corp., the quasi-governmental agency that is coordinating the city's business recovery program, said it is still raising money for the interest-free loan program. The BDC also offers grants of up to $5,000 to repair damage to storefronts, said spokeswoman Susan Yum, and seven merchants have received those awards. Recipients must waive any future claims against the city for riot-related damage, she said.

Lyo's burned store was among those that were uninsured; other merchants say their policies do not cover all of the damage. City, state and federal agencies have offered recovery assistance, but the money, mostly in the form of no-interest loans up to $35,000, must be repaid.

Meanwhile, merchants such as Lyo find it hard to face the prospect that some of those involved in the destruction might have been customers. She will say only that she does not know who would do this to her and that they must have been "misthinking."

She prefers to focus on reopening.

Unfair blame?

For the Korean-American Grocers & Licensed Beverage Association of Maryland, the city's hard line against some of the damaged liquor stores is particularly galling. David Kim, chairman of the group known as KAGRO, decried the mayor's decision, saying the city unfairly blames them for crime and other ills.

"It doesn't matter how many liquor stores you get rid of, it's not going to change anything," Kim said.

He faults city leaders for not better controlling crime in neighborhoods. "Everyone knows what the problem in Baltimore City is: It's the drugs. But no city leaders are saying [to the dealers], 'Hey, you need to get off the streets.'"

He added, "In Ellicott City where I live, there are eight mega-liquor stores and there's no crime. I don't know why the city always picks on liquor stores."

The 23 targeted liquor stores -- of the 40 damaged in the riot -- were grandfathered in as existing businesses when the city barred the sale of liquor in residential areas in the 1970s. Officials have said about 100 liquor stores do not conform with current zoning rules, and in seeking their closure the city Health Department has pointed to research showing that such stores are linked to higher rates of violent crime.

But not everyone believes that now is the time -- with businesses devastated by the rioting -- to crack down.

The state in particular will not deny assistance to the nonconforming liquor stores.

No-interest loans available through the Maryland Business Recovery Loan program originally were off limits to retailers of products and services such as adult videos, guns, tattoos and liquor. But because so many liquor stores were looted and damaged, the restriction was waived for them, said Tiffany P. Robinson, assistant state secretary of housing and community development.

The recovery program's goal is to help all businesses to reopen, she said. "We ultimately decided land-use planning shouldn't be done by looters."

Jung Kim, owner of Fox Liquors in Sandtown, was insured and was uncertain whether he would apply for the loans. But he said it would be unfair to deny him a loan when he has been operating his store lawfully since buying it 11 years ago.

"I pay taxes; whatever they charge me, I pay," he said, adding that he did not know his store was considered nonconforming. "The city, they have to take care of all of the city."

He had closed the store early as trouble began brewing April 27, but received a call from his alarm company about 9 p.m. He raced to the store and saw looters who had broken in through the back door carrying out bottles of liquor.

"Many people," he said, shaking his head. "I'm scared; I stayed across the street and I just looked. I can't do anything."

His store was closed for about 10 days, and he is restocking "little by little" as he can afford it.

'Why do you do this?'

Korean-Americans began moving into the grocery business in Baltimore in the 1950s and 1960s, as Jewish families who had dominated the market relocated to the suburbs, said retail consultant Jeremy Diamond. Since then, stores typically have been kept in a family even as the original owners prospered and moved from the city.

The presence of such businesses in poor and predominantly black neighborhoods has caused tension in the past. A 2004 report by the Maryland Advisory Committee to the U.S. Commission on Civil Rights found that many residents saw Korean-American grocers as "profit-seeking, exploitative outsiders."

Looking back at the April unrest, several Korean-American merchants said they do not believe the rioters singled them out for racial or ethnic reasons. Rather, it is simply that in the areas of the worst looting, Koreans own many of the stores, especially those carrying attractive items such as liquor, cigarettes, beauty supplies and lottery tickets.

"They were targeted because they sold what people wanted," said Eunhae Gohng, a Columbia-based lawyer and member of the Korean Society of Maryland.

Even in calmer times, the inner-city merchant-customer relationship could be challenging, transacted as it is through barriers of language and plexiglass, the largely immigrant business owners on one side, their mostly black customers on the other.

Still, there is familiarity and even warmth that comes from daily interactions at the mostly small stores, located in neighborhoods largely bypassed by the big national chains.

Moon Park says he has become friends with some among the stream of customers who drop into his liquor store, Jerry's Bar on Poplar Grove Street. He knows just about everyone by name, face or, at the very least, what they tend to buy.

While he stocks pricey bottles of Ciroc vodka and Patron tequila, most customers come by for single cans or bottles of beer, malt liquor and wine coolers, as well as miniatures or pints of the harder stuff.

Park was called by police in the early hours of April 28 and told that his store had been looted. He arrived that morning to find broken glass everywhere, his shelves and storage area largely emptied, two cash registers and a lottery machine bashed in, and an entire ATM gone.

"They need the money, take it. Why break everything?" said Park, 50. Two men were arrested, and Park went to Baltimore District Court for a recent trial date, but it was postponed until the end of the month.

Park, who previously owned a gas station in Virginia, bought Jerry's about eight years ago. From behind his cash register, purveying liquor, cigarettes and lottery tickets seven days a week, he's developed a jaded outlook.

He doesn't so much blame his customers, though, as city officials. Park says officials must curb the drug problem that underlies so much of Baltimore's crime and create a healthier economy.

"Who is going to solve the drug problem?" he said. "And they have to create jobs.

"They have to make a factory, to make food or make cars. Then [people can] spend the money here. They can spend the money in the grocery store. But they don't have any jobs to work."

Instead, Park said, the city invested in the Horseshoe Casino, which created a couple of thousand jobs in a city of more than 600,000 and cut drastically into his lottery sales. (The Maryland Lottery and Gaming Control Agency acknowledges that the expansion of casinos across the state has hurt lottery sales.)

Park still cannot bear to watch the footage from his security cameras of the looting. He doesn't let himself wonder if any of his regulars were among the looters, but says it wouldn't matter.

"Whatever my feeling is, nothing is going to change," he said of the need to find a way to recoup his losses.

Groups that represent Korean-Americans say their members, many of whom already live in the suburbs, increasingly are relocating businesses there. The rioting might spur others to leave, they say, and most do not expect or even want their children to take over their stores.

"A lot of Korean children don't want to get into the business," said KAGRO's Kim, who owns a carryout in Cherry Hill. "They're young professionals. My kids are engineers or doctors. They would come down to work in the summertime, and they would say, 'Dad, why do you do this?'"

Han Bok Chae, an accountant based in Ellicott City, said some of his clients have had enough of the city.

"I've gotten a couple of calls from clients; they want to get out of Baltimore," Chae said. "It has the highest tax rate and the highest crime rate."

Han Bok Chae's brother, John Chae, was injured when looters threw a brick at him, breaking facial bones; his business, the Fireside North lounge and liquor store, was burned.

"Financially, he lost everything," Han Bok Chae said.

'We have to love Baltimore'

As businesses restock and rebuild, the Maryland Department of Housing and Community Development, which is handling the state loan program, said it is trying to expedite the application and approval process. Gov. Larry Hogan's wife, Yumi, a native of South Korea, attended a meeting of Korean-American merchants to discuss the available assistance.

"I think it added a great deal of comfort and calm. [Business owners] got a sense of true feeling and concern for their welfare," said Kenneth C. Holt, Maryland's secretary of housing and community development. "The Hogans are going to obviously be concerned and involved in the outcome."

He added, "I know that this is a hardworking population. They provide value to their communities."

Back in Sandtown, Lyo remains as hopeful as two of her stores' names: Blooming Sun, which sits next to the Western District police station and avoided damage in the riots, and Blooming Dream in the Allendale neighborhood, which was looted. She says another store, New Sandtown Market, was protected by a neighbor from riot damage.

They are the latest in a series of stores Lyo has owned since immigrating in 1981. Lyo, who is divorced, said she expanded her business to afford "good schools" such as Gilman for her now-grown sons and feels she should give back to the community.

Lyo wants to expand her burned store, Hae-Tteuneum,which she says means "sun rising," by buying the damaged house next door.

"I want to make it a very nice and clean store," she said. "They need a grocery store here, a deli. A lot of people work around here, they need lunch."

Loretta Fulton, who owns a house down the street, walked by recently and told Lyo to get in touch if she needed anything.

"Miss Grace has a heart of gold," Fulton said. "It breaks your heart [the rioters] turned on their own community, and Miss Grace has been a very beautiful person."

Tears come to Lyo's eyes as she watches news footage that shows her store in flames. She is seen trying to get closer to it, but firefighters hold her back.

She chooses instead to think of the future, and is full of plans: She wants to ask the city -- again, she says -- to clean up the empty lots nearby. She wishes the whole neighborhood could regularly exercise together, and that there could be sports and art programs for the children.

"When I see the children, I tell them, 'You have the possibility, you can have the hope, you can be like President Obama,'" Lyo said.

She wants to write him to see if he will help Baltimore's broken neighborhoods. Until then, she hopes the city can come together.

"Why do we have to destroy Baltimore?" Lyo said. " We have to love Baltimore."

Baltimore Sun reporter Ian Duncan contributed to this article.

jean.marbella@baltsun.com