After weeks of confusion, shifting explanations and emotional farewell crowds, new allegations from a neighboring business owner are now speaking up on what may have fueled the turmoil surrounding the temporary closure and planned reopening of the historic Saugus Cafe.

Teresa Reyna, who has operated the neighboring Saugus Superette for more than 25 years, leases her business from the Arklin family, which owns both the land and buildings where the Saugus Superette and the Saugus Cafe are located. 

Former Assemblyman and philanthropist Hank Arklin purchased the cafe in 1996. Arklin died Aug. 1, 2025, at the age of 97. Alfredo Mercado, a longtime bartender who had worked at the restaurant for more than 15 years, took over day-to-day operations in 1998. The Mercado family never purchased the land or building from the Arklins.

Photo: Stephanie Reyna

Stephanie Reyna, Teresa’s granddaughter who works out of the Saugus Superette said the recent upheaval stemmed from misinformation shared by Alfredo Mercado and his family before the Mercados’ end of operations on Jan. 4, 2026.

The Mercados had been telling employees, patrons and members of the community that the restaurant was closing permanently because the landlord had allegedly tripled the rent and declined to renew the lease. 

Reyna said those claims were not accurate.

“This whole time he knew it was going to be renovated and put under new management,” Reyna said, adding that Mercado had recently met with the incoming ownership group prior to the closure.

Previously Bob Kellar, a former Santa Clarita Mayor, spoke on behalf of the Arklin Family and told KHTS the business was not permanently closing, but just changing management.

Reyna also alleged Mercado failed to fully inform his employees about the planned transition, which she said contributed to widespread confusion online and throughout the Santa Clarita Valley. During that period, Mercado’s daughter publicly commented on social media stating the cafe would not be renovating or reopening under new management, further fueling speculation that the closure was permanent.

Reyna said Mercado later claimed the landlord did not want to renew the lease, but she said that assertion was also misleading.

“There was never a lease to renew,” said Teresa Reyna, Stephanie Reyna’s grandmother and the longtime owner and manager of the Saugus Superette, echoing that claim, saying businesses renting from the Arklin family have historically operated under verbal agreements rather than written leases.

Teresa Reyna said she has managed the Saugus Superette for approximately 25 years and has never had a formal written lease with the Arklin family. She added that the Arklin family owns the land and buildings where both the Saugus Superette and the Saugus Cafe are located, and that word-of-mouth rental agreements have long been standard practice at the property.

“It’s always been a word-of-mouth agreement,” she said.

She also stated that Mercado did not have a written lease for the Saugus Cafe and that the rights to the “Saugus Cafe” name belong to the Arklin family, a point that was later confirmed by incoming management in previous statements to KHTS.

KHTS previously reported that the Saugus Cafe is expected to reopen in the coming weeks under new management following renovations, while remaining under the same property ownership and continuing to operate under its historic name. 

Incoming managing owners told KHTS they plan to preserve the cafe’s legacy while making operational improvements, including deep-cleaning and reorganizing the kitchen, updating the dining area and renovating the adjoining bar.

The Mercado family’s management of the Saugus Cafe officially ended on Jan. 4, 2026. During the final week of operations under Mercado’s leadership, long lines stretched down the sidewalk as rumors spread across Southern California that the historic eatery was closing permanently.

When KHTS posted about the Saugus Cafe’s new management announcing it is renovating and reopening on Monday, the Mercado family responded publicly on our social media page.

 

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“I’m the business owner’s wife, and this news station isn’t being truthful,” Elvira Salas Mercado wrote in a comment on KHTS’ Instagram page after the station reported that the Saugus Cafe is expected to reopen. “When my husband first announced he was selling, we received many generous offers. However, the property owners stated they would not lease the property of Saugus Cafe to anyone if we sold it, forcing my husband to close down without selling. Now, among other issues with the property owners, they are trying to reopen Saugus Cafe without paying my husband for the business rights. After forcing my husband, the business owner, not to sell, my husband is still the legal owner of the name, and the property owners have no legal rights to the name.”

When KHTS searched publicrecords.copyright.gov “The Saugus Cafe” “The Original Saugus Cafe” “Saugus Cafe” – no copyright records showed for the Mercado family. 

Incoming management and property owners have reiterated that the restaurant’s current closure is part of a transition – not an end and that plans remain in place to reopen the Saugus Cafe once renovations and permitting are complete.

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