Just two doors down from the tanning studio is Mondo Gelato, whose owners signed their retail lease in 2006. As one of the first tenants to move in on the block, the management is familiar with the tough business environment. “When we first moved in, the economy was doing well,” says managing partner Jerome Chan. “The housing market was doing well. Everyone was buying and moving in to this area. Now everyone is moving out of this area. It’s pretty much vacant.”
According to Grubb & Ellis’s “Retail Trends Report — First Half 2009,” downtown had a vacancy rate of 8.3 percent, while the county overall had a rate of 5.6 percent. However, those numbers do not include subleases or vacant spaces that are not available on the market. Also, downtown covers a large area, including the much-coveted Gaslamp District. Chan, who is 27 years old, believes the vacancy rate for retail spots in the ballpark district is “around 40 percent.” While there are storefronts that have been recently vacated, others have been empty for about three years. Some locals believe that property owners need to stop holding out for high lease rates and simply cut their losses.
“They’re losing money every month, and they’re never going to make that money back,” says Jeremy Day. “Just cut the prices now and fill it up. Renegotiate later.”
Facing what they expect to be another slow fall and winter season, both Day and Chan are depending on salaries from other employment — Day as a firefighter and Chan as a software consultant. As Day puts it, “Fortunately, I have another job. Fortunate, because my business is probably not going to give me a paycheck for a while. But it would be nice to be a business owner and not be an employee somewhere else. It takes away from this tremendously. If this was my sole project, I could do a lot more. But I can’t. I have to work every day.”
Despite news of their neighbors’ closing, the local shopkeepers that I spoke with remain convinced that things in the ballpark district will turn around, “Hopefully sooner than later.” They remain optimistic that new buildings due for completion in 2010 and early 2011 — like Strata, a luxury apartment high-rise on the corner of Tenth and Market, and the Thomas Jefferson School of Law, on Island between 11th and Park — will bring more customers to their shops. In the meantime, according to one business owner, “We’re doing whatever it takes just to hang in there.” To attract more customers, First Degree Tanning Studio is planning on adding more services, such as manicures, pedicures, and spray tanning. Mondo Gelato is discussing the idea of offering goods on consignment from local bakeries.
“I have a hard time giving up,” says Day. “I put in too much time and too much effort to say, ‘I’m going to walk away with a loss.’ ”