By Paul Myers @PaulM_SGN
EXETER– A la Mode’s closing is just the latest hit to Exeter’s downtown economy. In 2018 several businesses have shuttered their doors and it does not appear as if new businesses are on the horizon to fill the spaces left behind.
On E Street, TCBY closed this spring, Lamplighter Mercantile & Trading Co. officially closed their doors over summer, Lunch Box closed – or were evicted – in September, The Sun-Gazette moved locations to F Street two weeks ago and A la Mode cleared out their boutique last week.
Executive director for the Exeter Chamber of Commerce, Sandy Blankenship, says despite the recent vacancies Exeter’s downtown has a favorable climate that attracts business.
“We think that Exeter is a good place to do business so I don’t think many spaces will be vacant for long,” Blankenship said.
But Jessica White, owner of A la Mode, did not decide to close up shop just to move on from the hustle and bustle of business. White said she was considering keeping the business and just hiring a manager so she could step aside, but the numbers did not pencil out. With rent pushing upwards of $3,500 per month, and going up 3% per year at her location at the corner of E and Pine streets, she could not afford it.
“It didn’t work out for us unless we wanted to be there doing 100 percent of the work, 100 percent of the time,” White said.
Large buildings left behind.
Some of the vacant properties are troublesome because they are so large. The antique market Lamplighter Mercantile & Trading Co., which had occupied the old Bargain Maxx building near Café Lafayette, is approximately 4,600 square feet, A la Mode was approximately 3,300 square feet while the building the Sun-Gazette left totals approximately 3,800 square feet.
Blankenship says the chamber encourages businesses to locate to Exeter but they do not take on the responsibility of actively recruiting businesses for downtown. And while downtown is a business-friendly environment, she says the large spaces Lamplighter, A la Mode and the Sun-Gazette left vacant will be hard to find businesses for.
“We know we have some large spaces that will be difficult to fill… A la Mode and Lamplighter were large but there are not a lot of businesses that are ready to move into a space that big,” Blankenship said.
Paul Saldana, executive director of the Tulare County Economic Development Corporation (EDC) says they just retooled their business plan to begin recruiting retail businesses. The shift happened after a meeting with member cities, like Lindsay, who were calling for “deliverables” after years of coming up empty pursuing industrial type companies.
“It’s something fairly new for us,” Saldana said.
In order to attract retail the EDC subscribed to a web service that can generate consumer spending, demographic and other customized reports that will be made available on their web site, www.sequoiavalley.com. Saldana says the changes to the EDC’s site is set to publish by Dec. 1. Traditionally they have provided economic analysis that includes existing employers, labor markets, local demographics, transportation and utility services.
In terms of finding suitors for large vacancies in Exeter, there have been no takers in its largest vacancy, the old Rite Aid on Visalia and Belmont roads. The vacancy accounts for approximately 13,800 square feet in Exeter’s most popular shopping center and it has been over two years since Rite Aid moved cater-corner across the intersection. In that time there has been no discernible progress in filling the building. Saldana says the EDC has reached out to realtors to market the property but businesses have decidedly stayed away.
White attempted to sell her business when she realized she couldn’t afford to hire a manager. She did not get the response she had hoped. She says there were few serious offers, but nothing she was looking for. It was not until a realtor approached her and said buyers were scared away by the cost of the rent.
“That made me sad because if the rent wasn’t such a huge part of the overhead they may have bought the business,” White says. “That makes me nervous for downtown.”
Trending the wrong direction
Saldana says small business might have a distinct opportunity to capitalize on the open buildings because Exeter has become more of a destination where small businesses can continue to make strides, even if it does not register on a national scale.
“In my opinion we won’t see a resurgence in retail that will show up on all economic reports across the country…it is going to show up in small towns and cities like Exeter,” Saldana said.
But national retail reports are beginning to bear out that retail in small urban and rural parts of the country is contracting.
According to HiringLab.org, a site operated under the hiring site Indeed.com, retail job growth in small urban and rural areas is in decline. The site adds retail jobs fell 1.1% year-over-year in rural America as of June 2017 despite retail jobs growing nationwide. Meanwhile e-commerce and warehousing jobs are rapidly expanding in almost all areas of the country, except for mid-size metropolitan areas.
In small metropolitan areas e-commerce outpaced warehousing jobs in 2016-2017 by 5%. In rural areas warehousing expanded between 2016-2017 by 12% where e-commerce expanded by just 7%. It was only in rural and small metropolitans where retail jobs contracted. Despite e-commerce and warehouse jobs expanding at a greater rate than retail is contracting, the percentage of growth in those areas does not represent a significant amount of jobs according to Hiring Lab.
“Warehousing too is a drop in the bucket…[they make up] only 0.2% and 0.1% of jobs in small metros and rural counties respectively,” the report notes. “The real problem is that rural counties depend more on jobs in retail—the contracting industry—than other counties. Retail is still 6.2% of employment in rural areas, a significant share. By contrast, in the most densely populated counties, retail makes up a smaller 4.6% of all jobs.”
The Workforce Investment Board of Tulare County’s numbers for September shed some light on overall employment but accounted for a drop in retail jobs. The overall unemployment rate dropped by 0.9 percent in September 2017 to September 2018. Also, the overall labor force from September 2017 to September 2018 had increased by 3,100. But in the same time period retail trade shed 100 jobs in Tulare County amounting to a 1% drop in the industry.
What happens now?
White says the lack of clientele coming to downtown also pushed her towards closing. She said fewer people from outside of Exeter were coming into town to visit stores. As a way to remedy the lack of outside business White said she attended an Exeter Chamber of Commerce meeting to propose moving vendors down E Street and away from the park during Fall Festival to help lure customers further into downtown, but the idea was not accepted by the chamber.
With so many shops having made their exit, White says she fears a domino effect as fewer people frequent downtown because there are fewer shops to visit.
“You know, you see two or three vacancies and then the vacancies continue to go up, and up, and up. The less businesses there are hurts the other businesses around them,” White said.
The lack of business being generated in downtown has one Exeter city council member concerned.
“I see our downtown getting smaller and smaller…I mean look at Rite Aid, that space has been empty for a while now,” councilman Jeremy Petty said.
On top of businesses leaving the city, Petty added he is concerned with undeveloped real estate. He pointed to the example of the mysterious building on E Street next to the former Lunch Box building. It has been under renovation for two years with no discernible improvements inside. Petty thinks it is the responsibility of the landlords to make a decision on their properties.
“What are they going to do with these spots…I think it comes down to these landlords who either need to sell or develop these areas,” Petty said.
White thinks one way downtown could see some long term revitalization is if landlords take into account the effect they have on downtown. The landlord she had while on E and Pine was a night-and-day difference to the landlord she had across the street on Pine where she opened her shoe store. White says her shoe store landlord was inquisitive over the type of business she was opening and wanted to make sure it was a good fit for the area; her landlord on E and Pine was largely absent.