Editor's Note: With this story, we kick off a series on the state of the downtown business district. In this installment, we identify some of the reasons stores have closed or moved away, and learn what successful businesses have in common.-á
Next week we will explore what strategies could help the downtown, including what government can and can't do, what the potential role of the business community is, and what significant barriers to success exist. Lastly, we'll look at what plans are underway right now that could turn the downtown back around.-á
For lease. To rent. For sale. Closed.
A walk down Main Street in Monroe is a walk through a commercial real estate bazaar. In just three blocks, there were fourteen empty spaces on the street level last week, most seeking new owners or tenants. Many of them, including long-time occupants Cinderella's Closet, Mills Music and Spokemotion, closed in the last year.
There are nearly as many reasons for the closures as there are empty buildings, but among the factors cited most frequently are high rents, low business traffic, parking issues and in some cases, simply bad business practices.
On one thing all agreed; the downtown needs something to change, or it will never again thrive as a business district.
Closing shop
Julie Koppenberg pays twice the rent now than she did a year ago. But she gets a lot more than twice the business now that she moved her ornament and decor shop Glitter and Ivy from Main Street in Monroe to Riverside in Snohomish last March.
She was sorry to have to make the move; she said she loves Monroe, and it is where she lives.
But in the end it was move or go out of business.
"I knew the traffic was better in Snohomish," she said on Wednesday. "It's a numbers game. I have had 10 people in my door in the first hour this morning and I could wait all day in Monroe and not get that. And since I got here I have not had one no-sale day."
Koppenberg isn't the only one to find business difficult on Main Street. Current and former business owners cite a long list of reasons that stores have abandoned the street.
Jayne Morse has owned several businesses on Main Street, most recently the antique and decor shop The Golden Mean.
She closed that store this month in order to move into the old church building at Madison and Hill, which she occupies with three other antique stores as Abbey Antiques.
Business traffic on Main Street could be better, she said. But her biggest problem was rising rents.
"My landlords live in Hawaii," she said. "My rent went up $200, and if I were to stay, the rent would be like, $1,600, and that's a lot when there are this many vacancies."
Rent costs were a factor in the closure of the Monroe Chamber of Commerce and Visitor Center, which moved into a smaller and less expensive space on the second floor of a building on the other side of the street.
Another business owner said that informal lease agreements can be problematic; one business came and went in the space of months because of a verbal lease agreement that fell apart.
Many property owners said that the current Main Street parking limit of two hours discourages business.
"People are getting tickets," said Morse. "We are saying, 'Come shop Monroe but don't stay for two hours.' They gave a ticket to the one customer we had in January one day."
Koppenberg agreed, adding that heavy afternoon traffic related to schools on Main Street getting out also put a damper on trade.
"A 3 p.m. you might as well close because of the school traffic," she said. "That's a big one."
And it's hard to draw customers to a shabby-looking downtown, said several people, citing broken planters and unenforced sign codes that have allowed plastic banners and windows crowded with signage to make the downtown look tacky.
Another thing that makes it hard to draw shoppers downtown is that there isn't a consistent business mix, some said.
"One of the major problems is there's too many service-oriented things on Main Street," said Koppenberg. "If people want to come shop, there's nothing there. There's doctors, dentists, mortgage companies. The hard part is, you can't say people can't be in certain places, but that's why Snohomish works."
But there's only so much you can blame on the district, said Paula Fortier, owner of the Main Clothing Company.
"You have to be in your store and you have to be open the hours you say you are going to be open," she said, noting that she's seen businesses fail due to inconsistency or other unsound business practices.
Some closures are related to the stresses of balancing a business with personal life, said Lynn Gose, who took over Christy's Vintage Vault when the four partners who had previously owned it dwindled to one, who couldn't manage it alone.
Then Gose had health problems and family issues, and the business also became too much for her, she said.
Some business owners retire, as in the case of Spokemotion, or get burned out, as in the case of Cinderella's Closet, said Gose.
And the lingering recession is keeping shoppers out of stores, said Lana Stevens, who owns several buildings in the downtown, including the ones housing Main Street Books and My L.A. Fashion.
For rent
The recession has had another, less obvious impact on store occupancies, Stevens added.
"I have pretty much filled my buildings, and I have apartments, retail and offices, and I did that by making rent concessions," she said. "A lot of businesses owned by banks can't do that, because it's part of the mortgage agreement. The banks control what the rents will be."
The value of a building is based on what its rents are, she said, and banks are often unwilling to concede value, so they force mortgage holders to keep rents above a certain level, even if that means the buildings are hard to fill.
That means that people who bought buildings during the pre-2008 real estate boom are holding over-valued properties and are competing with other property owners such as Stevens, who has control over her rents.
That puts bank-owned properties at another disadvantage; they can't offer informal arrangements.
One property manager said that he has a hard time finding tenants when he has to get a formal lease agreement signed when some landlords are content with a handshake.
But even owners who can control their rents are often unable, due to rising costs, Stevens went on.
"My water, sewer and garbage went from $12,000 to $17,656 in a five-year period," she said. "My taxes on one building in a five-year period, this is with no capital improvement, went from $3,212 to $8,404. And the value of my property has gone down 15-20 percent. The landlord is getting squeezed."
Furthermore, she said, banks are still not granting start-up to small businesses that might otherwise move into the downtown.
Staying open
The businesses that endure have one thing nearly universally in common: a loyal customer base. Fortier has won customer service awards for attentiveness to customers. The three Mexican groceries that have not only stayed, but in some cases expanded, provide a place in which Spanish-speaking people can feel comfortable, and in which they can find products specific to their native countries that they can't find in other stores.
And the Monroe Barber Shop, which recently bought the other half of its building which until then housed The Chopping Block Tavern, has been in the same family for three generations and has served some customers all their lives.
Restaurants like Tijuana and Jeno's make it on repeat business.
Thyme for Health has endured because it, too, offers products not available elsewhere, as well as a place welcoming to a culture of health-conscious people.
Having decent parking helps, said Fortier.
And owning your own building, as in the case of Lovers Naughty or Nice, or having a landlord who can adjust rents during a downturn, also helps.
But for many business owners, those assets haven't been enough.
For Jayne Morse, the move off Main Street was simply a matter of survival.
"We're just trying to stay open and in business," she said.
Note: Next week, we look at some of the possible strategies for improving the business economy downtown, and what stands in the way.
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