Saturday, October 27, 2007

I have for some time now been carrying around the notion that the commercial surge I see downtown, the new stores and restaurants and hotels, will carry so far into the housing downturn, that it will simply overlap past the ensuing plateau and deliver us safely to the other side. Stores will come and go, but there is so much activity that I don't believe we'll have any dead zones for years to come.

If the housing downturn is a 5 or 6 year process, of which the first year it nearly complete, and the bottom is around year 3 or 4, then we really needed to see business growth for at least the next two years or so.

I never thought it very likely that we'd empty out. I thought there would be a 3 steps forward, 2 steps back progression. But I need only look around.

The new buildings coming on the market, and the 8 new restaurants, the new motel next to the parking garage, and all the other developments almost guarantee it.

See, from my perspective, I need to concern myself with my own store, whether or not I can sustain my business, and the vitality of the surrounding commercial district. All these new developments are going to create vitality for the near future.

Notice, all you bubble busters, I'm not saying these new businesses are going to do well, or even turn a profit. I'm not sanguine about their longterm prospects, and I'm even less hopeful that some of the existing restaurants are going to do well.

But as I've said before, I think any business which is well enough capitalized to even open downtown these days is probably strong enough to last a couple years or more. They may be bleeding red ink all along, but they won't show it from the outside.

And from a bottom line perspective, I don't care if they're losing money in the short run. Some will make mid-course corrections, others will quit, others will sell out. But all that is several years down the road.

So there are going to be all these new shiny businesses opening over the next couple of years, and then at least another couple of years as they mature.

This is mostly good news for my store. Normally, I have to pay a lot of money to connect to that kind of hustle and bustle. But it has suddenly emerged in the surrounding blocks over the last 3 years, and looks to get even more busy over the next 3 years, and here I am in the middle of it.

I'm no longer in the hinterlands, no longer a half block past the foot traffic.

I'll need to continue the process of becoming more mainstream, more new books and games and toys, while trying not to lose my niche credentials.

I used to worry a lot more about the parking, but I've found that most regulars manage to make it, and strangely, the more parking spots are filled, the busier downtown is. I figure that two of the new restaurants are taking the place of existing locations, and that we've lost at least 4 other restaurants recently, so the trade off may not be as bad as I initially thought.

The only bad news is that it makes it less likely that my own landlord will moderate my rent, or at least moderate my rent increase. I can hope he'll be happy to have a tenant that is approaching 30 years in downtown. I can hope he'll want us to stay, and understand that just because downtown is full doesn't mean everyone is doing well.

But, I have a couple of years of heavy traffic I think I can count on, and it's my job to tap into that market as much as I can.

9 comments:

Duncan McGeary said...

I've always thought there was a small chance we'd blithely blow past the downturn.

I thought it unlikely that all these new buildings would fill up, and I worried that we'd have three or four other Franklin Crossing, sitting mostly empty.

These new announcements are showing that won't happen.

I was wrong. I think they're all crazy, but hey, I'll ride the crazy coattails for awhile.

Duncan McGeary said...

To be clear, I do think there is a massive economic downturn coming. I think these new businesses are coming in at the worst possible time, and will do nowhere near as well as they think, or would've a year ago.

IT DOESN'T MATTER!

From a purely cold blooded point of view, half these businesses could be disasters for the owner, and it won't matter to me.

It is very important to keep your eye on the bottom line; but I don't underestimate the importance of perception, either.

I think downtown is going to look like a happening place for the next couple of years, whether the new stores are a good idea or not.

As someone who has already paid off all his start up costs and inventory, and has a moderate overhead, this is mana from heaven.

Go, Go, Godzilla!

Duncan McGeary said...

In other words, while I think the bubble busters were prescient about the housing bubble, and are quite right to ridicule the naive assumptions of real estate agents, and to mock the excuses of, "everyone wants to live here," or "real estate prices never go down," etc., the downtown, which is what I'm most concerned about, may escape the worse SIMPLY BY AN ACCIDENT IN TIMING!

That is, commercial planning is so lagging, that it will actually come online at the worst time. And probably survive through the worst time.

Because, again, strictly from my perspective, having new businesses open and busy streets can't but help.

I almost did it myself, opening a second store. And I'm quick in opening. Many of these guys have probably been planning for years, others simply haven't quite gotten the word, others may simply see this as an opportunity to establish themselves in downtown Bend, knowing full well that there is going to be an economic downturn.



I hate to say it, but I don't care if those businesses make any real sense.

Duncan McGeary said...

I mean, this may just end up be a self fulfilling prophecy.

If you have two or three guys planning to charge the frontlines, that looks crazy.

But if a whole bunch of other guys pop up to join you, suddenly it doesn't look so crazy.

Sometimes perception does become reality.

Let me tell you, having been in a dying mall, and having watched downtown crawl back from the abyss, and visiting other downs that are striving just to get on their feet (Redmond, anyone?), it's pretty amazing to see such a charge.

Duncan McGeary said...

In my experience, real guaranteed foot traffic is RARE, really, really RARE. And where you can find it, extremely expensive.

I'm talking about shoppers, people wandering around with intent to buy.

Just doesn't happen all that often.

Sometimes you can't even buy it. All through Bend in the 80's and most of the 90's you couldn't buy it.

Oh, you could rent locations that guaranteed 'better' foot traffic. Both malls had better foot traffic than downtown, and charged more. Most of the current malls would like you to believe they are giving you worthwhile foot traffic, and at Christmas and summer, they may even deliver.

But a shopping area where the mix of stores and ambiance is enough to create shoppers, I think in Bend that has been all but unheard of. I'm not convinced, for instance, that the Forum or the Old Mill have it, despite their rents.

You see it in Sisters on Weekends in the summer.

I think we have a chance of seeing it in downtown Bend, most of the year. Because of small stores, a lack of chain stores, because it's maintained a small amount of funky, and because it's becoming really high end all around so that it's almost like a yuppie theme park. An Amazing congruence.

I don't think you leave such an area if you can help it. I understand that a store on the block is leaving for a bigger space in another part of town.

Shakes head.

That owner just doesn't understand what he's giving up. This is rare.

Oh, the rents could get so high that I could see having to leave, because you can create a bigger space, with visibility and higher advertising and so on. But if you're already established, you'd be crazy to give it up.

Don't tell my landlord I said so.

Anonymous said...

I think its all a crock of shit. Yeh, the bull says a dozen new high places are opening. Then we have Hans, & Guiseppes gone, ... We have Merenda empty, and Stocatto so-so. Let's wait until January, and see what actually opens. What we do know about the BULL is that its consistently full of shit.

Visitors are down, lift tickets are down, everything is down, theres a ton of new big-box retail opening up downtown, much of it without a lease. What terms are they offering? All of commercial Bend is REIT, and REIT is now a pariah on Wall Street. Yeh, real quick do what you can to get all this downtown space occupied, but the fact is they'll not get the big long term high income leases.

What about the 7-11 up at NWXC haven't heard about that for awhile, its like everytime their is a 'rumor' the BULL prints it as fact, and then months later nothing is ever said.

Yeh, good for you, the 5-9pm traffic increases at all the diners for folks here on vacation +5mi out of town, you don't even have your shop open after 5pm, something stinks here.

Duncan McGeary said...

It looks to me like these places are probably going to open. They seem like they're too far along. Inside they might be thinking, oh, oh.

Like I said, if they weren't opening, then downtown was in danger off starting to look emptier. Too many new buildings, that if they don't have the bottom floor filled would make downtown look bad.

I think it a lot of foolishness -- except, maybe that's what it takes.

And it's an accident. A timing accident. I don't care how they do, just that they'll be opening.

If they fold, they leave a beautiful corpse, not a run down piece of crap. The next guy may not be so high-falutin, but will get the benefit of a nice space.

I'm open till 6:00, but yeah, you're right. Parking will simply disappear after 5:00. Still, a town full of people is what we want, and I think we'll get that. Many of them will be passing by my window, plus whatever lunch and weekend crowd.

Like I said, if you're retail you want foot traffic.

Sorry about the optimism. It comes over me once in a while.

Mrs Sally Heatherton Esq said...

Bend fixit man, WHO is Ron Garzini.

***

Bend, Oregon; Model test laboratory for the crime-free, prison-industrial city-state of tomorrow. Ron Garzini, expert witness.

Managing a surplus population in a retirement community.

......

This essay examines what we are calling the ‘crime control industry’ and how the growth of such an industry relates to growing inequality and the need to ‘manage’ or ‘contain’ the ‘surplus population.’ Profits are a major moving force in this process, rather than the goal of reducing crime and suffering. An important component of this industry is the ‘prison industrial complex,’ one of the fastest growing industries in the U.S. Also included is a rapidly growing private security industry that includes private police and security guards, along with a growing supply of technology to aid in the ‘war on crime.’ Other components include drug testing companies, gated communities, and a booming gun industry. We conclude by outlining possible explanations for the growth of this industry.

October 28, 2007 8:35 AM
Anonymous said...

[2] Ron Garzini, US private prison booster, quoted in Christian Parenti 'Lockdown America: Police and Prisons in the Age of Crisis

*

Ok, here's the deal; answering the rhetorical question. How does Garzini fit into BEND, gated communitys,... Brooks Security Services, ... Bend Stewards.

Garzini is a NUMBER-ONE spokesman in America for the issue of 'managing an un-needed population', solution prison privitization.

Garzini is the critical link to 'cleaning up' central oregon. Note the new prison up in Madras is part of the over-all picture.

Garzini is the critical link at the federal level for the Oregon Laboratory. I don't even want to get into that, Oregon was designated back in the 1950's post WWII to be a sociological laboratory to study population policy management.

The reason that Garzini is a 'fix-it' man, is that behind the scenes he has powers at the Federal Level. He also has the second most powerful lobby in America behind him, #1 military-industrial-complex, #2 prison-industrial-complex.

Ron Garzini is a leader of #2.

Welcome to Bend, Oregon.

Mrs Sally Heatherton Esq said...

Optimism no problem, its permissable, I just think that the forecast is all BULLshit.

What about that 7-11 @ NWXC a month ago it was all the talk, ...

It seems like folks are signing leases, but like we have said, the window is only xmas-to-newyear, then its quiet until july/august, I hope these dozen eaterys for fools with money get there ass in gear, and where in the hell are they going to get all the staff? That can't afford to live here anymore?

This biggest complaint I hear at the Silver Moon is that there is no bus between Remdond and Bend, or folks that don't have a car, that have to work in Bend, and then hang out at the silver-moon for a cheap beer waiting for a ride.