Not the kind of news I like about my old neighborhood. From the Daily Sun:
Many Reasons for Empty Storefronts in Collegetown, Landlords say
OCTOBER 29, 2013 12:12 AM
By SARAH CUTLER
Landlords and tenants agree: commercial vacancies in Collegetown are on the rise. But there is no such consensus among parties on the reasons behind the increase.
Green Café, a former 24-hour eatery in Collegetown, has been closed since April 2010. The space, which sits on prime real estate on the corner of College Avenue and Dryden Road, is not the sole empty storefront in Collegetown.
While landlords blame national economic trends, city politics and business practices for vacancy, tenants accuse landlords of charging excessively high rent prices and having lease agreements that Chuck Cooley, owner of Classic Optical on Dryden Road, called “hostile.”
“If people are going out of business, the question is, what’s driving them out?” Cooley said. “Is it a poor business model, or are franchise fees too high, or is it the person who talked them into the lease who said there’d be more foot traffic than there is? There’s a ton of different things that go into it.”
Jason Fane, a Collegetown landlord and developer for the Ithaca Renting Company, said excessive available retail space, extensive regulations and competition with online businesses are behind vacancies in Collegetown.
He noted that much of the vacancy is in what landowners see as “development sites,” where landlords must choose between long-term rentals to “good tenants” — who “stay for a long time, pay their rent on time, honor all the provisions of the lease and don’t cause noise or other problems” — and short-term rentals, which tenants with strong businesses likely don’t pursue since they won’t have time to make up their investment during the course of the lease.
Fane also blamed some of the vacancy in Collegetown on novice businessowners.
“Many tenants in Ithaca rent a store and underestimate the cost to properly open the business, have a poor operation and go out of business quickly,” he said in an email. “Some confuse knowing how to cook with knowing how to run a restaurant business.”
In development sites in Collegetown, he said, landlords are waiting for the City to pass a form-based zoning code for Collegetown that has been in the works for four years. While he does not keep retail vacancy statistics, he said, it appears there has been an upward trend in vacancies since the City announced its plan to rezone central Collegetown.
“Until it is passed, landlords either can’t comply with the existing law or don’t know what to tell their architects to design,” Fane said. “Retail vacancy in Collegetown has increased due to many stores on development being held off the long-term market while owners wait for a new zoning law.”
Common Council member Graham Kerslick (D-4th) disagreed with Fane, saying that landlords should not wait for the new code to start filling their properties.
“I don’t know why people would be waiting on a zoning law. Though there is a Collegetown plan being developed, it’s not suddenly going to change the structure of Collegetown overnight — these processes take many years, and in the meantime, these vacant properties are going to be staying vacant,” he said. “To be frank, I don’t really buy that argument. Presumably, it’s better to have two years of rent than two years of vacancies.”
Though he does not know the cause of vacancies in Collegetown, Kerslick said he does not think the number of vacancies is worse than it has been in the past, he said.
Still, he said he is interested in “digging deeper” into the reasons that some streets are thriving, while others have more vacancies.
“Sometimes, people suggest that it’s a particular owner that is the reason spaces are vacant. We should find out if there are correlations with vacancy rate and how people do business,” Kerslick said.
Collegetown tenants, however, seem to agree that what is keeping buildings empty are forbiddingly high rent prices.
Natalie Sweeney, owner of the new Natalia’s Boutique on Dryden Road, said rent is “absolutely” the reason for vacancies. For her 1,010 square-foot store, she pays $2,000 each month for rent. Anywhere else, for the same amount of space, Sweeney said she would be paying $1,000 per month. The rent just gets higher as stores get closer to the “main drag” of Collegetown, she said, with some of the stores there paying more than twice her rent.
Michelle Green, the owner of Acute Style, added that, “the biggest thing is that the rent is super high — it’s getting to the point where you can’t keep up with your profits.”
Cooley called the number of vacancies in Collegetown “atypical,” pointing out the disproportionate number of vacancies across the street from his store in the spaces owned by the Ithaca Renting Company.
The nationwide economic downturn has not helped matters, said Matthew Taylor, general manager of Stella’s. Restaurants in particular are suffering because people do not have as much disposable spending money to go out, he said.
All Collegetown business also struggle with the “ebb and flow” of Cornell’s schedule, Taylor added.
“Our business is closely tied to student population, and when there are breaks, that hurts us,” he said.
While it is possible to own a successful business in Collegetown, it is not easy to balance the long breaks in the academic calendar, according to Cooley, who noted that some businesses, including Plum Tree, simply shut down during breaks.
“Most restaurants are trying to survive on nine months of income and 12 months of expense — it’s an awful business model,” Cooley said. “There are success stories — Aladdin’s been there for 25 years — but it’s difficult to get it done. You have to have the right business, and you have to do all the right things for marketing.”
Here's the link:
http://cornellsun.com/blog/2013/10/2...collegetown-2/