Friday, July 16, 2010

Signs o' The Times...

Unfortunately, they tend to say "For Sale", "Going out of Business Sale", or are an advertisement for the local Real Estate Agent hoping to lease empty, or soon-to-be empty, space.

This past fortnight has seen a rash of small businesses, many of which had been staples of the local community, close their doors. That's terrible, especially when these business owners spent, in some cases, decades growing their businesses and their reputations in the community, and now it's all over for them. Or is it? I know a few of them, and we've been talking, and some of it is simply fascinating.

Two small businessmen of my acquaintance that have recently closed shop have told me that business was actually pretty good despite the bad economy (one ran a delicatessen, and the other a dry cleaners), and that what really caused them pull up stakes was their rising rents. One man told me that no sooner did the real estate market head south in 2008 than his landlord was already trying to renegotiate the lease he had just signed, so as to double his rent to $14,000 a month on a storefront where two generations of his family had worked for near on 30 years.

When he refused to renegotiate (he did have a signed contract, after all), the landlord took him to court over nuisance issues just to try to get him out of the building, but the Deli Owner ran the clock out, and when his lease finally expired this past spring, he finally left. Whether or not he re-opens in a different location is questionable, because the local commercial real estate situation is,as they both tell me, "absolutely crazy".

My dry cleaner friend is going to re-open elsewhere, but he informs me that the leasing situation makes this somewhat problematic; despite having more retail space added to Staten Island in the last five years before the recession than in the previous decade -- and with much of that new construction sitting empty -- some landlords are actually raising their rents, not lowering them. My buddy says that this tells him that the landlords probably financed all of that recent construction with high-interest/variable-rate loans, confident they could fill the space at high-enough rents to turn a profit. Now, they're stuck with empty space and a ballooning monthly mortgage payment, not to mention tax assessments that reflect the formerly-inflated values of the properties they own. They are so deep underwater as to be drowning. They can't afford to drop rents, and they're simply praying they find someone stupid and desperate enough to pay these inflated rates.

He's also under the impression that we're talking about a very few landlords who own the majority of the properties, doing business behind a variety of real-estate companies/concerns. That the guy who owns 123 Main Street as Mr. X Property Management, is probably the same guy who owns 678 Main Street, as Nosepicking Dimwits and Company, and you can tell two locations have the same landlord when the rents on both pretty much rise at the same rate, at the same time, despite the sticker in the window identifying the management company.

Mr.Dry Cleaner also expects to see a whole lot more"For Lease" signs at the end of the year, because many of these leases will expire on December 31st -- and no one is going to pay rates that are much higher than they are now. There's been some folks forced out of business by the bad economy, but maybe there are just as many being forced out of business by their over-mortgaged landlords, he reckons.

So, I took a look around because while there have been a lot of closings lately, there's also some new stuff opening around here, too. What's that all about? And then I started to take note of what had closed, and what was opening.

On the Closed side, we have perhaps the biggest Bridal shop on Staten Island. In fact, "shop" is probably the wrong term to use. This was a Wedding Emporium, something on the order of 6-8,000 square feet of nothing but wedding dresses and wedding crap, and if that wasn't impressive enough, the local paper which lamented it's closing reported that the recent renovations made to that building cost just over $2 million. That shop didn't go out of business because no one's getting married (although I'm fairly certain they were selling fewer-and-fewer $5,000 wedding gowns to brain-dead Schifoozas who want to wear the same dress they saw on their favorite episode of Real Housewives of Bensonhurst), they went out of business because they couldn't afford to pay for the renovations they made, which makes you wonder how they financed it tobegin with? A second mortgage on the first-and-second homes, now less-valuable then they were two years ago? Most likely.

Then there's the Yarn/Knitting/Fabric Store which never seemed to have any clientele at all, but somehow stayed open for 20+ years. When I say "no clientele", I mean that I never saw anyone go into or out of the place in two decades, that I can recall. You would think that in a recession, knitting supplies would be in demand as people start saving money by making/repairing more of their own clothing. Having the ability to knit a cardigan is about to become a skill on par with hunting caribou, or smelting iron from surface deposits in Post-Obama "Recovery" America. But there's the knitting store, Out-of-Business.

A small printer's shop has also closed, although the Dog Grooming and Antique businesses that flank it are apparently doing a decent trade. A few hair salons have closed (which is no great loss, considering there's at least 15 more within a 20 block radius), a large health food store went under, too. The Leather/Luggage shop, gone. So too was closed the Christian Gift Shop, which just goes to prove that it doesn't matter how much you pray, when it comes to money the Lord hardly ever giveth but doth taketh away faster than you can say "Glow-in-the-Dark-velvet-Jesus".

I've also noticed that just about all of the local banks have turned off/removed their "Courtesy Clocks" which give passers-by the time and temperature. When banks are belt-tightening...

But, on the Opened Side of the ledger, something weird is happening.

A new Bakery opened this past winter, just down the block from one of the more popular and revered bakers on this island. Business is such that it stays open until 9 pm, on most nights.

Two Discount Stores (Mostly household goods/children's clothes) have moved into the neighborhood, and so has a new Fresh Fruit/Vegetable shop. Last spring, a new comedy club opened up in the old Lane Theatre which had alternated between "flash-in-the-pan-flavor-of-the-week Guido Hangout" and "Abandoned" for years. A great deal of renovations were done on the building, and business looks decent on most weekends. Most of the more popular restaurants on the main drag do pretty well on weekends, although weekday nights are pretty slow. Three new restaurants (two pizzerias and a Japanese restaurant) opened up within the last 18 months, and are still here. We're about to get a new Yogurtberry opening up any day now, and a relocated Dance Studio moved in last summer, shares the same newly-renovated commercial building on the main artery. A recent report in the local paper says that one of the major Big Box stores is not only staying in it's current location, it's going to open a second location not a mile further up the road. The Day Spas and Korean Nail joints which litter the landscape are busy everyday, with a steady stream of gum-snapping Middle-class housewives running in and out for fish pedicures and European skin peels.

What to make of all this? What does this say about the economy, in general?

Damned if I know, but it appears as those who have cash on hand are doing well or holding their own, and those who lived and died by credit are up Shit's Creek without a paddle. And when you stop to consider that if there one thing that's harder to get than a blowjob in a convent, it's credit, then it's no wonder.

Of course, the Credit Crisis would have been much less severe if a) Banks that received TARP money had done what they were supposed to have done with that money -- get the bad loans off their books -- instead of what they actually did -- shore up their stock prices, buy up their weakened competitors, pay their Executives exorbitant bonuses, and b) if the Federal Government hadn't had sucked up $787 billion for a Stimulus Bill which is two lies for the price of one, but then again, "The Keeping Dangerous and Useless Democratic Party Allies Rolling in Someone Else's Money Bill" wouldn't have worked.

And now the same douchebags who took $1.5 trillion dollars off the credit markets between TARP and Stimulus -- just at the time where that money would have been useful to help with recovery -- are about to inflict a new round of "Financial Reforms" on the Nation which will involve making a Corporate Bailout next to a Constitutional Right. Citibank's ability to fuck up and be saved, and Planned Parenthood's ability to give a 13-year old a We-Won't-Tell-Your-Parents-Late-Term-Abortion is being paid for by the Print Shops, Knitting Barns, Health food stores, and Bridal Shops of Staten Islanders, and many others.

That's not Financial Reform, Mr. Obama. That's a reward for bad behavior that will guarantee a repeat performance.

No comments: