Bancroft vacancies remain a concern
Friday, April 15, 2011
Category: News > City > Business
Community members in one of Berkeley's most densely populated areas attribute the persistent vacancies on Bancroft Way to several different factors, including the area's strict quota system, while members of the local business district and other neighborhood representatives work to increase the area's economic growth by filling empty retail spaces.
With the Telegraph Business Improvement District's proposal to embrace a 24-hour commercial zone currently under revision by the city's planning and development department, some members of the district - who cited quotas, high rent, minimized revenue because of seasonal academic breaks and vagrancy on Telegraph as impediments to the growth of businesses - hope to find additional ways to combat economic decline.
According to Chris Wight, a principal with locally based commercial real estate company Cypress Properties Group and board member of the business district, tenants usually lose interest in retail spaces in the district because of the restrictions of the quotas and the time and money that is needed to supersede these current limitations.
For the past three years, Wight's company has had an empty 3,000-square-foot retail space on Bancroft as well as another similar-sized space on the same block that used to be occupied by gLAB Interactive Games and Alphonse Berber Gallery prior to their closures.
"The idea is that (if) we get rid of quotas, then we're on an even playing field with the rest of Berkeley, Emeryville and San Francisco," Wight said. "So instead of a tenant who says 'Oh, I'll open in San Francisco and skip Berkeley.' I think that's the problem."
Wight added that, from his observations, there are a number of tenants who take up the commercial spaces and then leave the locations after realizing they do not have the financial capabilities and time to obtain a variance and go through a public hearing to prove they differ from those businesses that make up the quota.
Though the Telegraph Merchants Association has no official position on the matter, Al Geyer, the association's chair, said properties are often vacated because of rent levels that are too high for small businesses.
"An entrepreneur may not have the resources ... and if they don't do well, they might not be able to last more than two to three years, as opposed to a corporation that can sign a 10-year lease," he said. "Starbucks may close one store and (it will) not ruin them, but small businesses have just one store."
Councilmember Kriss Worthington, who remains hesitant to eliminate the quotas and whose district includes much of Southside, said reducing rent rather than removing the quotas would revitalize Telegraph.
He added that commercial real estate companies push for the removal of quotas not for the well-being of existing businesses but rather as a way to increase rent.
According to Wight, despite the complaints about quotas and rents, Southside businesses are largely dependent on student customers, whose presence in the city is in turn dependent on the structure of the school year.
"(Businesses) lose revenue in the summer and close down by the winter," he said, suggesting that the problem could be alleviated if university dormitories, fraternities and sororities actively rented out their spaces during these breaks.
Still, regardless of their differences of opinion, many business leaders and city officials share the goal of revitalizing Telegraph by providing a safer and livelier environment through plans such as the 24/7 proposal and events like Telegraph's Last Sundays Fest, an effort by the Telegraph community to invigorate the area that Geyer said he hopes will decrease vacancies.
"We're trying to improve Telegraph," said Geyer, who - along with Wight, Worthington and merchants on Telegraph, such as the owners of the Caffe Mediterraneum and Milanese Caffe - is part of a committee to increase pedestrian lighting in the area.
Karinina Cruz covers business. Contact her at [email protected]
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