In this first of two parts, two longtime Wallingford business owners who recently closed their shops, discuss why they think their shops closed
The health of a long-loved neighborhood business often serves as a good, yet crude, measure of the surrounding business district's vitality. Wallingford's main drag along North 45th Street has, in the last few months, however, revealed the business district to be on the downswing, as two popular shops closed: Vandewater Books and, kitty-corner across the street in the Wallingford Center, The Garden Spot.
With the fall of these two favorites, rumors quickly began circulating among neighboring business owners and street-savvy regulars about the reasons behind the closures. The two most commonly heard speculations pegged high rent and chain-store corporate muscle as the main fatal blows to the beloved, independent shops.
The shuttering of a business is rarely a black-and-white matter. So to understand whether there is a systemic, caustic problem with the Wallingford business district, it's crucial to visit the sources of such persistent neighborhood rumors.
Tattered books
With their shop now just a vacant shell, Marla Vandewater, along with her partner, Michael Zuberbier, closed their used bookstore on Aug. 16, their 10th anniversary. It also was the end of a nearly 30-year run for a used bookstore in that location.
The beat poet Ray Mungo along with Peter Miller, who currently owns the Architectural Bookstore downtown, founded the store in 1973 under the name Montana books.
The bookstore changed owners four times and went from its founding name to 45th Street Books and then Open Books, before Vandewater and Zuberbier got their hands on the shop.
Vandewater tagged the rent increase as the final straw for their shop, but clarified there were other, longstanding elements that were just as damaging.
"I think that there are a number of factors going on," Vandewater said. "The push out the door was the $600-per-month rent increase."
Vandewater and Zuberbier paid $1,930 per month before the increase levied on the store. This figure included triple net, which is a term for the insurance, taxes and maintenance costs the landlord passed on to the bookstore via their contract.
"We've never had that large of an increase before, and [the landlord] said he felt our space was under market," Vandewater noted.
Of the eight businesses sharing the building owned and managed by Burien resident Frank Walters, the used bookstore's space, along with two others, have had their rents remain the same for the last three years.
For Vandewater, that meant seeing her price-per-square-foot go from $1.23 to $1.45. Walters points to rising tax and insurance costs as the main reason for the increase.
"I kept [Vandewater's] low on purpose for years because she wasn't doing that good," Walters said. "[My tenants] are aware that they have good rent. I'm the lowest in the whole area. I couldn't keep them low anymore. I hate to do it. I don't raise their rents unless I have to."
Walters states that all of his commercial tenants now have their rents leveled out so they match one another, but price-per-square-foot aside, Vandewater points to a recent consumer trend as a major factor in her and Zuberbier's decision to close.
"The thing about our particular situation is the whole way that books are bought, new and used, has been changing. A big factor is the Internet," Vandewater asserted, observing that it used to be only a resource for out-of-print and hard-to-find books. "People are busy trying to get by. They don't have a lot of extra money. They don't have a lot of time. So it's really easy to just buy on-line. We [sold] on-line, and most [used-books stores] do, but we sell out-of-print stuff on-line. It's not worth the time to put other stuff on-line."
For Vandewater and Zuberbier, the net result has been a steady decline in sales, which was exacerbated by the economic doldrums of the last three years. Because of this, Vandewater blames the economy just as much, if not more, than a rent increase and a shift in consumer buying patterns.
"[The business] had been declining for a few months, and then it was picking up. After Sept. 11, it just fell like a lead balloon, and it's been going down ever since," she said.
Bad harvest
Just down the street, the Wallingford Center's Garden Spot was pulling in around $350,000 per year since Marianne Jarosz and her husband took over the 10-year-old business in 1998. While such a gross sounds great, according to Jarosz, it still wasn't enough to make minimum wage after a recent rent increase.
When she closed her doors on July 31, Jarosz was paying $5,150-per-month for the ground-level, northwestern-corner space. This included a 10-percent increase in the cost of building and common-area maintenance.
"Certain businesses need a lot of square footage to sell their product, and when you have strict pricing-per-square-foot, businesses like a plant store have a difficult time meeting the rent and creating enough profit," said Jarosz, who felt her average profit margins of 40 percent were too slim for her business in its location. "The profit is cut so tight from the high overhead that you can't move forward and change your direction, change your course."
One such attempt at change happened a few years ago, when the economic downturn was settling into Washington. Jarosz had some new ideas to help her improve business, and she approached the Wallingford Center's management company, Lorig, for a temporary rent reduction. What she received instead was a six-month reduction of $1,000-per-month that had to be paid back at 12-percent interest.
"The minute the process of the repayment began, [business] began shifting backwards again," Jarosz recalled.
While the rent increase was a significant factor in Jarosz's decision to close her doors, she also points to the Internet as a player in shifting buying trends away from the neighborhood businesses.
However, Jarosz blames her decision to close on the loss of a healthy mix of businesses in the Wallingford Center more than the other profit-squeezing factors.
"When our business died, really, is when the bagel shop [ZiPani] left in May of 2000," Jarosz asserted. "We've been hanging on ever since. The revenues used to be higher when ZiPani was around."
The bagel shop sat next door to The Garden Spot, and because of their hours, customers were in the building from 7 a.m. until 7 p.m. Losing them as a neighbor set Jarosz's operation into the inevitable crash after a popular Wallingford Center shop relocated near the Pike Place Market nexus of storefronts.
"What made me finally say 'no more, I can't proceed,' was when the children's clothing store [Boston Street, located on the second floor] left and we dropped 30 percent in sales," Jarosz said. "A lot of their customers, clearly, were picking up a few plants, buying a gift, whether it was cut flowers or a house plant with a pot. Obviously, they were a destination, and I was the while-I'm-here-I'll-also-buy-this place. They had a larger impact on my business than I realized."
Next week: Part II - The business owners and the Wallingford Chamber of Commerce cast a critical eye on themselves and the neighborhood in an attempt to revitalize the area's business community.
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