At last week’s Davis City Council meeting, the city proudly introduced its brand new Chief Innovation Officer, Rob White, who has been recruited in large part to help with Davis’ economic development plan to bring in high tech and other research spin-offs.
The position is an innovative private-public partnership, funded in part through the non-profit, techDavis.
However, at the same time that Davis is putting forth the full effort to become a regional high-tech power comes the announcement that another long-time local business has lost its lease.
Common Grounds, in the Oakshade Shopping Center, which has been such a popular hangout for the last 12 years that often it is difficult to find seating, as last night at 6 pm before the April 4 deadline when their lease ends.
Owner Son Chong told the Vanguard on Sunday that in their place will be a Starbucks and a pet store. Starbucks, perhaps attempting to compete in South Davis with Dutch Brothers Coffee is apparently looking to put a drive-through kiosk in the shopping center’s parking lot.
The owners had been negotiating with a company called the Regency Centers, which bought Oakshade back in 2011 from Paul Petrovich.
Co-owner Michelle Kim told the Enterprise this weekend that they only have seven days’ notice to leave.
“We’ve paid our rent on time for 12 years. We haven’t done anything wrong,” she told the local paper. “They only gave us seven days’ notice. We’ve paid over $1 million (cumulatively) in rent since we set up the store. Our store and Dos Coyotes (restaurant) are the ones that have survived in this part of the shopping center over the years.
“I had to give our employees two weeks’ notice, that’s 10 good kids who will be out of work.”
Is this now becoming a trend in Davis? A locally-owned commercial enterprise being forced out of their lease by an out-of-town landlord?
It was just a few months ago that the Wash Mill Laundromat was forced to vacate their East Davis Manor location, where they had resided for nearly 40 years.
The sign on the door read, “To all of my friends that have used my Laundromat for 40 years, I would like to thank you. The landlord has given me 30 days.”
A local resident, Meg Sloss, wrote at the time, “I am saddened and angry about the loss of the Wash Mill, which has been pushed out of tenancy at the Davis Manor Shopping Center to make room for the Goodwill.”
The president of the property management company, Mark Bitterlin, told the Bee that the closure was “not my problem.”
As Ms. Sloss describes, “The landlord of the Manor (sounds positively medieval doesn’t it?) complied with the needs of Goodwill by booting out a 40-year-old business.”
She adds, “It’s hard to imagine the landlord of the Manor can turn his back on a business owner who has provided so vital a service to the community for such a long time – 40 years! Essentially, this new agreement can put her out of business.”
While the Davis City Council looked into ways to help, they ultimately found that there was not much they could do.
Two years ago, still under the ownership of Paul Petrovich, four businesses at the Oakshade Plaza in South Davis either closed or moved in a very short period of time. Mermaids closed. Davis Creamery moved from Oakshade to the Lofts. Quiznos closed, reportedly posting a sign that they could no longer afford the rent.
Pure Beauty then closed their South Davis location. At the time, that left four of the seven storefronts in that portion of the shopping center vacant. While sources indicate that Mermaids closed for unrelated reasons, the issue of rents has long been a concern of Davis businesses.
At that time, the problem appeared to be the owner Paul Petrovich.
The exit of Common Grounds now leaves only Dos Coyotes in that portion of the shopping center.
David Robert, then owner of Davis Creamery and now co-owner of Sugar Daddy’s, told the Vanguard that his lease over at Oakshade was costing him $5800 per month for a 1200-square-foot space, and in South Davis it simply did not have the foot traffic for him to be able to turn a profit.
“It was absolutely ridiculous,” he said. “It’s not like it was Bourbon Street in New Orleans.”
“He [Paul Petrovich] was very unwilling to work with anyone even during the economic downturn,” he said. “He didn’t care because he had a signed contract and it’s just business.”
From the city’s perspective, however, they do not get involved in tenant-landlord issues such as leases. As such, Sarah Worley told the Vanguard there is nothing the city could do about that situation, just as there was nothing the city could do about the Wash Mill and just as there is now nothing the city can do about the loss of Common Grounds.
And perhaps that is the way it should be. But it seems to me that these out-of-town property management companies have long been a problem. We have identified problems already at the Davis Manor, we covered the battle at Westlake Plaza, attempting to get a grocery store, and also the exit of the laundromat there as well as the move of West Yost. Now Oakshade remains problematic, as well.
The city rightly wants to focus its economic development efforts on high tech and spinoffs from the university, but maintaining its local base of retail should be a priority as well.
—David M. Greenwald reporting
Common Grounds was the closest thing to a South Davis (SODA) meeting place. It will be missed; a pet store will not fill the void.
I know they were planning to have a coffee kisok at Right and Relevant; will that still open?
R&R’s coffee operation is up and running, serving excellent brew. Hope it can continue in spite of the problem at the Oakshade location.
I don’t get the anger with the landlords since the only reason they are not renting to local stores is that they are getting higher rent from the nationl chains. The main reason that the national chains can pay more rent is that they get to spread the cost of running a business and dealing with the increasing number of regulations and mind numbing rules of running a business over many stores.
This is obviously a sad turn of events for the owners and long-time employees of Common Grounds. I would imagine the proprietors have a lot of (what accountants call) “goodwill” equity in that site and if they re-open elsewhere, it will be hard to rebuild that.
If Common Grounds moves to a new location in Davis, perhaps a good site would be the Nugget shopping center (Oak Tree?) at Pole Line and Covell. I don’t think there is a stand-alone cafe at the mall. (I also don’t know if there is a vacant space, there.)
One thing which is less clear is whether the end of Common Grounds will really be a loss to coffee drinkers in Davis. It never ceases to amaze me how many high quality sellers of good coffee there are all over town*, including many independents (like Cloud Forest, Ciolcolat, Mishka’s and Mocha Joe’s plus a few more tied to restaurants).
If Starbucks opens in Common Grounds’s place, I’m sure it will do plenty of business, too; and if there is a real demand for a “hang-out” in that area, then some other entrepreneur will try to provide that opportunity.
And because everyone values my opinion on April Fool’s Day, here are the top five commercial outdoor locations to enjoy a good cup of coffee in Davis:
5. Ciocolat on B Street
4. Peet’s on E Street
3. Mishka’s Cafe on 2nd Street
2. Panera Bread on 3rd Street
1. Cloud Forest Cafe on D Street
Homorable mentions: Starbucks at U-Mall; Starbucks on F Street; Crepeville on 3rd Street; Cafe Bernardo on 3rd Street.
One more thing … Seattle’s Best Coffee, which was inside Border’s, was the single best place to sip on a cup of coffee and enjoy the outdoors through the large glass walls. Also, the Davis Commons seating area was an especially good place to have a coffee outside. A shame is that the Whole Foods, in that same spot, serves impossibly bad coffee.
————
*By contrast, Woodland, which is about the same size as Davis, has just one really good place for coffee, Fat Cat Cafe, by the Opera House, plus a couple of Starbucks.
[i]”The main reason that the national chains can pay more rent is that they get to spread the cost of running a business and dealing with the increasing number of regulations and mind numbing rules of running a business over many stores.”[/i]
No doubt, this is a part of the picture. However, in the example of coffee sellers, I am not sure how much of an advantage scale brings in dealing with regulations specific to that business. Perhaps the largest edge there is dealing with labor regulations/liabilities* which affect all businesses.
Where I think scale especially helps the coffee chains is: 1) customer/resident turnover. When new people come to Davis, they have never heard of Common Grounds. But they likely know Starbucks and Peet’s and Panera Bread, etc., and they will likely go to those places first; 2) advertising; 3) volume purchases of supplies, including coffee beans and baked goods; and perhaps 4) seasonal demand fluctuations. A bigger company, with more liquid cash, can often manage the down times, if demand is weak in one region and strong in another, and later that reverses. That’s harder for some independents, who may need a more steady cash flow to make ends meet, and yet may suffer for months at a time when fewer customers desire hot coffee and baked goods.
————————-
*A Davis resident who owns a business in West Sacramento told me roughly 5-6 years ago that his insurer settled a lawsuit with a former employee of his who he had fired after the person failed to show up for work for two days without ever calling in to say she could not come in. The contention in the lawsuit was that he fired the woman because of his supposed prejudice against her gender and her race and her age. According to the owner, all of that was b.s. But the cost of defending the lawsuit would be so high, that the insurer was forced to settle. In the end, his insurance rates skyrocketted. And he has greatly cut back on employees to reduce his liability.
Funny thing is there’s already a Starbucks in Safeway at that location in the Oakshade Plaza.
Rich, I think there’s still an open store at the Oak Tree Plaza where the H2O store used to be located.
What’s frustrating about this is that it was totally unnecessary. There’s plenty of vacant space in that same part of the shopping center for a feed store and/or Starbucks kiosk. Plus, it is incredibly tone-deaf to push out a long-standing locally-owned business that had its own well-developed customer base. There was a real community built up around Common Grounds.
Yes, Don and hope it was April Fools, Rich, that you seemed to dismiss South Davis’ needs so cavalierly …..Mocha Joes is a nice place too, but not as much of a meeting place and farther out for students. Believe Walnut Park was to include a satellite library and meeting space along with pool but we know that will not happen…..
SODA: [i]”Walnut Park was to include a satellite library … but we know that will not happen…..”[/i]
I assume that the Yolo County website is not wrong when it says that the South Davis Montgomery Satellite Branch opened a year and a half ago ([url]http://www.yolocounty.org/Index.aspx?page=1974[/url]).
[img]http://www.sports-logos-screensavers.com/user/Virginia_Cavaliers2.jpg[/img]
[i]”… hope it was April Fools, Rich, that you seemed to dismiss South Davis’ needs so cavalierly …”[/i]
I never said anything which was remotely cavalier. As I wrote, I think it’s a real shame that Common Grounds is being shut out.
[i]”There’s plenty of vacant space in that same part of the shopping center for a feed store and/or [b]Starbucks kiosk[/b].”[/i]
I don’t know if it was in play in this decision, but Common Grounds had a no-compete clause in its lease, which prohibited the mall owner to lease space to another cafe wil Common Grounds was there. That came up some years ago when the mall owner permitted Safeway to include a Starbucks kiosk inside it.
“… another cafe [s]wil[/s] [b]while[/b] Common Grounds was there.”
truly sad, i have never really forgiven Starbucks for attempting to charge New York City for water they provided after 9/11. and they have a nasty habit of checking out shopping centers and then running their Safeway kiosks where small coffee venues are flourishing. hopefully another local for a good small business citizen victimized by corporate greed.
yes Rich. MME has a twice weekly library open in the school library where you can drop off and check out reserves you have requested. A good addition to our town but to me not the same as a satellite library!
I wrote:
> The main reason that the national chains can pay
> more rent is that they get to spread the cost of
> running a business and dealing with the increasing
> number of regulations and mind numbing rules of
> running a business over many stores.”
Then Rich wrote:
> No doubt, this is a part of the picture. However,
> in the example of coffee sellers, I am not sure how
> much of an advantage scale brings in dealing with
> regulations specific to that business.
I’m no expert on this but I have friends that run business that serve food and drink to the public they have been telling me that year after year they (and they pay people to) spend more and more time and money making the multiple regulatory agencies that regulate them (and often fine them) happy. I have heard many times from business that closed that when income was flat and the cost of doing business kept going up it squeezed profit to the point that they had to throw in the towel.
Even worse are the regulations that stop so many businesses from even starting (see the link below). Today a small business can pay more for an ADA consultant than the total cost to open a business just 20 years ago.
http://allamericanblogger.com/19777/starting-a-business-in-san-francisco-is-a-red-tape-nightmare/
My friends that work in politics (on both sides of the aisle) tell me (off the record) that while almost all politicians “say” they like small business in reality most tend to work with big business (who give far more in campaign and PAC donations) to make things as hard as they can for small business to crush the competition…
Rich, you need to get over to Woodland more often. There’s a new place in town, a local outfit that has the best coffee in the county. (Maybe that’s why they call themselves, Yolo Coffee Company. At 421 Pioneer Avenue, in the shopping center.).
It’s not just me; the place gets incredibly high ratings on Yelp! as well. One Yelp! reviewer mentions a Facebook promotion with a free goodie offer, but I haven’t checked that out. I just stop in whenever I have to head to Woodland, not so often now that I can buy underwear locally.
JS: Thanks for the suggestion. I think when that coffee shop opened, or rather, when the mall opened there by Pioneer High School, that was a Starbucks. I generally don’t go to Starbucks. It’s not a political thing or even a quality of food/drink thing, though there prices for no good reason are a bit higher than most. It’s more, for me personally, a recurrence of bad service at various Starbucks which has turned me off. I’ve had some bad service* at a few of the Davis independents, too. But if they have other attractions, like a nice sunny place to read or chat and people watch, I won’t write them off forever. The problem with Starbucks is that most of their locations offer nothing extra. … Best places for service in our area? Easily best is Steady Eddie’s in Woodland. And that place in Woodland by the Opera House, the Fat Cat Cafe, always has good service.
*A problem at independents? Besides just a few (the exception really) young clerks at the cash register who are mind-numbingly slow and come across as unconcerned with the needs of the customer, I seem to regularly run into outfits which are out of cups. They aren’t out of those putrid paper to-go cups. Rather, if I want a large coffee (I usually only order a plain black coffee, no cream, no sugar, no nada), half the time they are out of their large ceramic mugs. Sometimes I’ll ask for a medium, and find them out. “Oh, wait, let me wash one for you,” the clerk says. What kind of business does not stock enough coffee cups so that there are always some clean ones of all sizes available. I don’t think I’ve ever had that problem at Peet’s–a chain, and well run in most respects–however I am amazed how often I order a cup of coffee at Peet’s and they say, “Wait a few minutes for that. We need to brew a new tank of coffee.”
“… though [s]there[/s] [b]their[/b] prices for no good reason …”
[i]”Today a small business can pay more for an ADA consultant than the total cost to open a business just 20 years ago.”[/i]
One of the dumbest ADA things I witnessed in Davis–perhaps not as bad as the shutdown of Dairy Queen–was the reconstruction of the ticket booth at the Varsity Theatre. I am not sure exactly how much money that cost–probably about $70,000–but it was all a total waste.
When the Varsity was remodeled back from being a live performance space into one showing independent films, the ADA lawyers said that the ticket booth had to be accessible for wheelchair-bound employees. Fine, I thought, at least that will provide a good job opportunity for someone in our community who does not have other chances for employment. But I was wrong. I’ve been to the Varsity a gazillion times since, and I’ve never once seen anyone working in that ticket booth who was wheelchair-bound or appeared otherwise to be handicapped.
When it was built back in 1949-50, the there was a small step to the ticket booth. So in order to comply with the ADA, the entire floor had to be rebuilt so that it was at the same level as the floor outside the booth in the theater. Also, the front window, for someone working in the booth from a wheelchair, was too high. So the historic facade had to be demolished and rebuilt with a new, very expensive window which was much lower.
Again, if a human being actually benefitted from these changes, then I would not have so much of a problem. I am all for better public accomodations. And I am for making work spaces accessible, if you are actually going to hire someone who is handicapped. But in this case, no one in the public benefitted. And despite the great costs to the city, the folks who run the Varsity have never been compelled to hire a handicapped person to sell tickets from that ticket booth.
“From the city’s perspective, however, they do not get involved in tenant-landlord issues such as leases. “
Oh yes they do. Many landlords use the Davis Model Lease. When he ran three tears ago the Mayor claimed it needed to be re-worked. Nothing has been done to date so maybe the council should look at creating a model lease for commercial spaces when they take up that re-write.
Rich Rifkin and Just Saying:
Common Grounds opened a location on Main Street in Woodland several months ago, and as of a couple of weeks ago, was still open.
Rifs
[quote]And despite the great costs to the city, the folks who run the Varsity have never been compelled to hire a handicapped person to sell tickets from that ticket booth.[/quote]
Point of clarification.
Are you suggesting that you believe that someone should have been able to “compel” the managers of the Varsity to hire a handicapped individual ? Or are you simply pointing out the irony of a great deal of money spent without an apparent beneficiary to date. If the former, who do you think should have the power to compel a small private business to hire from a specific classification of people ?
[i]”Are you suggesting that you believe that someone should have been able to ‘compel’ the managers of the Varsity to hire a handicapped individual?”[/i]
Yes, if you were going to compel the building owner–the City–to pay tens of thousands of dollars to modify the space. If you are not going to compel them to hire a handicapped person to work in that space, then what the eff was the point of blowing all that coin? Why not, instead, spend that money somewhere else in Davis which would, for example, improve handicapped access? Or maybe just give the cash to some poor family with a handicapped child so they can modify a van for wheelchair access?
What irks me is the total waste of money (not to mention the stupid destruction of the historic fabric).
[i]”If the former, who do you think should have the power to compel a small private business to hire from a specific classification of people?”[/i]
Were it up to me, the ADA would not apply to any old buildings, even when they are being rehabbed. However, I would not oppose encouraging building owners, when remodeling, to make their spaces as accessible as possible for wheelchair accommodation, with things like tax credits.
Yet if our government has the power to compel a building owner to reconstruct his old building to meet the requirements of the ADA for the theoretical benefit of one handicapped person, then it certainly has the power to require that one handicapped person be hired–or at least to make a very serious effort to hire a handicapped person for that one job.
Rich Rifkin wrote: “Best places for service in our area? Easily best is Steady Eddie’s in Woodland.”
I assume he meant Steady Eddie’s in Winters. A very popular refueling station for cyclists from Davis.
[quote]or at least to make a very serious effort to hire a handicapped person for that one job.
[/quote]
So do you know that such an effort has not been made ?
[i]”I assume he meant Steady Eddie’s in Winters.”[/i]
Yes, Winters. My bad. Here is a column I wrote last June about biking to Steady Eddy’s ([url]http://www.davisenterprise.com/forum/opinion-columns/find-your-pot-of-gold-in-winters/[/url]).
[quote]If you are not going to compel them to hire a handicapped person to work in that space, then what the eff was the point of blowing all that coin? [/quote]
To make it possible for a handicapped person to work there if he or she were to apply and be hired. If you don’t make the building accessible, that isn’t possible and handicapped individuals are precluded from working there.
[quote]Why not, instead, spend that money somewhere else in Davis which would, for example, improve handicapped access? [/quote]
That is presumably already also required.
[quote]Or maybe just give the cash to some poor family with a handicapped child so they can modify a van for wheelchair access? [/quote]
It’s not a zero-sum situation.
[quote]What irks me is the total waste of money (not to mention the stupid destruction of the historic fabric). [/quote]
I think that if you were wheelchair-bound, you wouldn’t think it was a waste of money. And you apparently value historic preservation more highly than handicap access.
[quote]”If the former, who do you think should have the power to compel a small private business to hire from a specific classification of people?” Were it up to me, the ADA would not apply to any old buildings, even when they are being rehabbed. [/quote]
So handicapped people could not get into or navigate around in any old buildings.
[quote]However, I would not oppose encouraging building owners, when remodeling, to make their spaces as accessible as possible for wheelchair accommodation, with things like tax credits. [/quote]
And if they didn’t? Then handicapped people could not get into or navigate around in old buildings.
[quote]Yet if our government has the power to compel a building owner to reconstruct his old building to meet the requirements of the ADA for the theoretical benefit of one handicapped person, then it certainly has the power to require that one handicapped person be hired–or at least to make a very serious effort to hire a handicapped person for that one job. [/quote]
I really don’t see how you make this leap of logic.
It’s clear that you don’t understand or support the purposes of the ADA.
Rich wrote:
> Yet if our government has the power to compel a
> building owner to reconstruct his old building
> to meet the requirements of the ADA for the
> theoretical benefit of one handicapped person,
> then it certainly has the power to require that
> one handicapped person be hired
Here is a great story about SF spending a million dollars for a ramp in the city council chambers (and there is no reason for the ramp other than to put the council president up higher so they feel special)…
http://www.sfgate.com/bayarea/article/Wheelchair-ramp-will-cost-100-000-a-foot-3226613.php
This is a very disappointing situation. I do not like Common Grounds’ coffee. However, coffee places such as CG are meeting places, social locations, anchor points for neighborhoods.
I am a capitalist. What is wrong with our society, however, is that our system is set up for corporations/size/sameness, not for innovative small business owners who are crushed by corporate landlords, arcane ADA laws, crushing employee insurance rates, paying their own skyrocketing medical premiums, suffocating taxes, etc. A few local businesses such as Village Bakery or Konditorie were able to purchase buildings. Most are at the whim of a landlord.
I am not suggesting that the City should intervene, as this is likely to cause even more unintended consequences. This problem is deep rooted in our system and in public ignorance. Sadly, another neighborhood gathering place is gone, another local business is gone. The winners are Starbucks and an absentee corporate landlord.
This does not make Davis a better town.
Alan Miller–I support your points. As the years go by; it seems to me that laws and regulations have been shifting more to favor the big corporate chains over the small independent businesses.
Maybe the national landlord cut a deal with the national chain for multiple locations nationally.
It is tragic when local businesses get screwed, but this is our current economic reality. Money is quickly concentrating in larger pools, not smaller pools. This is due to regulation and a tax code that favors this concentration, not because of restrictive regulation.
When those larger pools of money make decisions, we get left with the “trickle down” results, and this is what happens.
The adjacent property has had trouble staying open. Maybe the landlord wants to reconfigure. Its hard to know. You say there were negotiations but you don’t say what the sticking point was in their discussions. A week does seem to be short notice.
Regarding WHY the landlord kicked out Common Grounds: I received an email today from someone I don’t know, but who I’ve heard from in the past on real estate issues in Davis, and his explanation sounded plausible to me. I suspect he is employed in real estate, but I don’t know in what capacity.
The emailer said that Paul Petrovich sold that shopping center to a Florida REIT called Regency Centers more than a year ago. I guess this is common knowledge. I was unaware of that. I thought Petrovich still owned that mall.
He told me that Regency Centers owns hundreds of neighborhood shopping centers all over the U.S., mostly on the East Coast and in California; and the emailer said that Regency has a national deal with Starbucks to be the exclusive coffee-seller tenant in all of their hundreds of shopping centers.
The result is that wherever a different coffee company, be it an independent like Common Grounds or another chain, is leasing space in a mall, Regency will give that space over to Starbucks. The emailer told me he was told that the rent that Starbucks will pay Regency at Oak Shade will be the same or less than Common Grounds was paying. He said it is not true that Regency will make more money from the change in tenants.
Someone wrote a letter to the Davis Enterprise complaining about “corporatocracy.” I thought that was off point until I read this email. It really does seem like the big guy just screwing over the little guy. In this case, Starbucks, using its muscle as a large player, screwing over Common Grounds. And Regency Centers, by making that kind of an exclusive deal, screwing over a little tenant only because doing so benefits Regency elsewhere.
VANGUARD: [i]”The owners had been negotiating with a company called the Regency Centers, which bought Oakshade back in 2011 from Paul Petrovich.”[/i]
I must have skipped over that when I read this blog. My bad.
Rich–great info. in your posts above. I think deals like this have gotton more and more common–the big guys using their financial muscle to dominate the market; many such strategies are used.
In thinking about a possible exclusive agreement with Starbucks, the thing which seems odd to me is that Regency bought Oak Shade in 2011 and Common Grounds was not run out right away. So if the exclusive agreement exists, it must have either been the case that Common Grounds’s lease terms forced a delay or that Starbucks, which already has a bunch of locations in Davis, did not decide until recently that it wanted to locate in that mall and that then caused Regency to push out Common Grounds.