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Closures affect others

Managers say when nearby anchor stores fail, walk-in traffic decreases

Posted: April 11, 2009 1:22 a.m.
Updated: April 11, 2009 4:55 a.m.

A gardener mows the lawn near two vacant properties on Soledad Canyon Road near Crossglade Avenue in Canyon Country on Friday. Smaller businesses notice a decrease in walk-in traffic when larger stores close.

As the economic doldrums continue, more businesses close their doors and new buildings remain empty, busines owners next to buildings that have become vacant say they also are taking a hit.

In fact, one local manager said the vacant ex-Mervyn's building has detoured customers from coming to his business just two doors down.

"I don't have hardly any walk-in customers anymore," said Richard Ngo, manager of C'est L'amour Nail Salon. Ngo said he hopes the large building, now sitting empty, reels in a new retailer soon.

Geraldo Diaz, manager of German Hi Tech - a service and repair shop in Valencia's Autoplex complex - said since neighboring Big O tires went flat in March, he worries about his job security. Hi Tech has felt the effects of decreased traffic flow, Diaz said.

"Look at the parking lot - there are no cars," said Diaz on Friday, pointing to what was Big O's lot.

The threat to local businesses is all there in the vacancy numbers. Santa Clarita Valley's retail vacancy rate numbers rose to 6.3 percent, or 805,432 square feet, for the first quarter of 2009, or January through March, according to the city's numbers, calculated April 7 by Maryland-based commercial real estate information company CoStar Group. That vacancy rate is up from 3.9 percent in the fourth quarter of 2008.

The city's administrative analyst said while she hasn't heard concerns expressed from neighbors of these vacant buildings, she's seen the positive impact that the occupancy of a larger tenant can have on those around it.

"When Target opened, the Plaza at Golden Valley saw a huge influx," said Laura Biery, administrative analysis for the city's economic development department. "So when that space was filled ... Panera (Bread) was hopping, Bed Bath & Beyond and Wells Fargo saw an increase ... When a major tenant does open, it is a wonderful opportunity for the smaller tenants in the center."

Tony Sayegh, owner of Smokin Aces' Cigar Shoppe, awaits a major retailer to occupy the 29,000 square foot building in Newhall's Stagecoach Plaza shopping center, which is more than two years old.

"Luckily I'm in an industry where I am OK, I'm going to make it month to month," Sayegh said. "But if business was just based on walk-in traffic, there's no way I would have survived two years. There is nothing to bring in the big crowds. The anchor is the draw and the rest are sub-categories."

The 29,000 square-foot space's broker, Remy Chen, said while many retailers have expressed interest in building, actually bolting down the deal has proven difficult.

"Given the economy, it's hard to lease anywhere," he said. "We're looking into any possibility, or anyone who's interested in leasing the place."

But the bigger the space, the bigger the commitment, Chen said. "It's a lot of rent," he said.

At least one business remains successful despite the shortfalls of those around it.

"I can't complain. We picked up a couple of their accounts," said Daniel Carpenter of PACC Automotive, referring to the closure of Big O. Carpenter said he recently hired an employee and plans on hiring another in the near future.

"It looks bad in the neighborhood to see those businesses close down," he said. "But I look at it differently - businesses come and go, and if you don't stay on top and do a good job, someone's going to come and do a better job. Some people bank on other people's business. I don't."

Biery, of the city, said whether businesses are affected by the vacancies around them could depend on the type of business and their strategy. "It's something that's very unique," she said. "If it's (a business) that didn't take the proper steps ahead of time, then it might be one that will not fare out as successful."

Biery said while the most recent numbers do not show a huge increase in big-building vacancies, the number has risen and the city continues to market spaces currently unoccupied.

"We continue to work with the commercial brokers to assist them," Biery said. "We want to fill the vacancies and provide retail opportunities to our residents. If we have someone come in and we know they're looking at a vacant space, we know who the broker is and we can refer them to the appropriate broker."


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