Downtown vacancies prompt concern

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Downtown vacancies prompt concern

An unusual number of “for rent” signs have been cropping up in downtown Sylva lately, and the vacancies have town leaders and business owners wondering what this forebodes in the year ahead.

“Whenever there’s a major closure, we don’t feel the effects of it until the following tourist season,” said Bernadette Peters, who owns City Lights Café. “This year was great. Especially when businesses close, the other businesses tend to see the increase from that because everybody’s concentrating their dollars in the businesses who are there.”

But that effect typically ends, Peters said, once people learn that fewer options are available.

“My concern is more for next year,” she said.

Until recently, Peters also owned Evolution Wine Bar, which now accounts for one of the downtown vacancies. She sold her shares in Evolution to her business partner, who opted to reimagine it as a bottle shop. Evolution is now located in the Sylva Plaza. Peters called the move a “brilliant idea” that will require much less overhead than the downtown space.

Like Peters, John Bubacz is responsible for one of the downtown vacancies but is still a member of the Main Street community. And, like Peters, he sees 2016 as a successful one for business. His coffee shop Signature Brew closed in September when the N.C. Department of Revenue called in a tax debt, Bubacz said, but he still operates the Sylva Convenient Mart and maintains Signature Brew as a coffee roasting company, which sells its wares inside the Convenient Mart. Humanité Boutique moved into Signature Brew’s former space, leaving the boutique’s previous location vacant.

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Despite the year’s challenges, Bubacz said that both Signature Brew and the Convenient Mart doubled their sales over 2015. He recently began to sell beer, wine, sake and cider and plans to launch a home delivery service this spring. And with “Three Billboards Over Ebbing, Missouri” — a star-studded film made in Sylva last spring — slated for release this year, Bubacz sees plenty of promise in 2017.

But still, there are the vacancies. They’re troubling.

“In the 16 years I’ve been in business, I haven’t seen this many for rent,” he said.

There are 10 vacant spaces in the town’s B1 district, which includes the core of downtown along Main and Mill Streets. In a town the size of Sylva, that’s a lot. This time last year, downtown sported seven vacant spaces.

“There are different situations in a lot of the vacancies,” said Town Manager Paige Dowling, who also serves as the town’s Main Street director. “Some of it’s the price of the property, or that the property owner doesn’t want to rent — they want to sell. There are a lot of different factors playing into the vacancies.”

It’s impossible to pinpoint one common cause, downtown merchants agreed.

Some, like Steve Dennis of Hollifield Jewelers, see the “For Rent” signs as part of the normal ebb and flow of a small town. Businesses start, they fail, they succeed — the patchwork is always shifting. As the third-generation owner of a 57-year-old Main Street business, Dennis has seen the cycle repeat many times.

“I’ve been here long enough to see the ebb and flow,” Dennis said. “That’s the natural way that those townships work. Obviously you’d like to see more vitality — open doors, signs on windows — but I’ve seen a lot of businesses come and go.”

Time for a change?

For some downtown business owners, however, the volume of vacancies is proof that Sylva should think seriously about hiring a Main Street director. The town hasn’t had one since 2011, when Dowling was hired for the part-time position. The following year she was promoted to town manager, and with budgets tight the town board decided to put her in charge of the Main Street program as well.

Dowling understands that, from the business owners’ perspective, the model is “not ideal,” but “when that decision was made by the board, the revenue shortfall was so incredible that there wasn’t really another choice.”

It’s not easy for one person to do two jobs, and some things have fallen by the wayside since 2011. The town holds fewer events than it used to, for instance.

Dowling pointed out that there are some advantages to a dual town manager/Main Street director, especially when it comes to getting the town and the Main Street Association to work in unison.

“There are things that have improved,” Dowling said. “The National Register (of Historic Places) District, having the (N.C.) Main Street Conference here. Our Main Street Program is now accredited.”

But there are plenty of downtown business owners who say they think Sylva needs a separate Main Street director.

A contingent of them showed up to a town meeting Nov. 17, when a discussion about the Main Street director position was on the agenda. They told the town board that it’s essential that Sylva have a dedicated Main Street director.

“We thought like every other small town there were festivals and events, but there’s not,” said John Wermuth, who opened End of Main with his life and business partner Mark Bryant this summer, arriving from Atlanta. “So that was sort of disappointing for us. We never knew who to talk to as far as promoting Main Street.”

He and Bryant are “very pro downtown business manager” — Sylva needs a more organized approach to downtown development, he said.

“When we have a concern about Main Street, we have to put it on Facebook so some other business owner will say, ‘Go to this person.’ That was sort of hard for us to realize,” Wermuth said.

The merchants got mixed reactions from commissioners during the November meeting. Commissioners David Nestler and Greg McPherson expressed support for hiring a director, with McPherson commenting he’d like to see it as a recurring budget item. Mayor Lynda Sossamon suggested that those in attendance — including board members — attend a meeting of the Jackson County Commissioners to discuss the subject with them. And Commissioner Harold Hensley asked where the money for such a position would come from — taxes were already high enough, he said.

A question of funding

Two months have passed since then, and commissioners will soon start planning the 2017-18 budget. The Main Street program will be a subject of discussion.

“It’s definitely going to be part of the budget discussion. It’s a priority for me,” Nestler said. “Our downtown has a lot of potential, and you have to invest in your downtown if you want to see it come to fruition.”

“I think we need one,” agreed Commissioner Barbara Hamilton. In addition to organizing festivals and such, the town needs someone to focus on economic development and keep the town board in tune with what is happening in the business community, she said.

But the perennial question is, where would the money come from?

“Nobody wants to hear that because they think we’re being negative, but that’s just the way things are,” Hamilton said. “I wish we did have a much bigger budget and we could afford all these things.”

Sylva raised its tax rate by 42 percent last year, a reaction to decreased property value and rising expenses. But even that substantial tax hike was barely enough to keep the town solvent on a no-frills budget.

Nestler, however, feels that the financial part of it would be more likely to work out if the board made an upfront commitment to providing the position.

“I think the town should commit to the position and then if we want to look for funding from other sources we can, but I think we should say, ‘This is worth us paying for,’” Nestler said.

The money wouldn’t necessarily have to come completely from the town’s general fund, he said, but the conversation should start with a commitment to make the position a top priority. Then they could figure out how to pay for it.

Over the mountain in Waynesville, a Municipal Service District tax pays for salaries and operations at the Downtown Waynesville Association. Property owners in the core of downtown pay an additional property tax of 20 cents per $100, on top of the regular town tax of 48.57 cents per $100.

But Sylva is not Waynesville. For one thing, it’s much smaller. Sylva’s population was 2,603 in 2013, according to an estimate from the U.S. Census Bureau, while Waynesville’s was 9,739. Paying a director via a Municipal Service District would likely require a tax too high to be a net benefit to business owners.

“We’re a small town,” Dowling said. “I think there are three towns in North Carolina that have populations below 5,000 that have Municipal Service Districts, and not all of those use it for a director’s salary. A lot use it for projects.”

The challenge, Peters said, is that even though Sylva is home to only 2,600 people, it serves many more than that. Western North Carolina towns like Sylva tend to see high volumes of tourists who are wooed by the presence of retail and restaurant diversity, downtown aesthetics and festivals — all of which a downtown director would promote.

Thinking about partnerships

Peters feels a line item in the town’s budget wouldn’t be enough to provide a downtown director.

“I just think we need to look creatively at multiple sources,” she said.

Maybe the town could fund some. Maybe the county could fund some. Maybe the Tourism Development Authority could fund some.

The idea of kick-in from the county and TDA has been making the rounds, spurred by an editorial from The Sylva Herald newspaper that called point-blank for a TDA-funded director. The TDA, whose budget comes from Jackson County’s 4 percent occupancy tax, is tasked with using those funds to further spur tourism in the county. In 2015-16, its budget totaled $932,000.

TDA Director Nick Breedlove, however, disagrees with the suggestion that the TDA fund a Main Street director for Sylva. He released a statement expressing the desire to “correct inaccurate perceptions and information” on the topic.

“While we applaud the idea of a Main Street director/downtown director for Sylva, that responsibility does not rest with the TDA,” Breedlove wrote. “The Jackson County TDA was created specifically to promote travel and tourism and to serve as the marketing organization for the entire county, which also includes the communities of Cashiers, Cullowhee and Dillsboro.”

The Jackson County TDA’s budget is actually smaller than that found in neighboring counties, Breedlove wrote, and its marked growth in recent years should be seen as proof that the organization’s current strategy is working.

“The fact that we can achieve double-digit growth speaks volumes to the ability of the TDA and our partners to get the absolute best return on any marketing investment,” Breedlove wrote. “November occupancy tax collections were up 34 percent over the same period last year, and website traffic is up 1,100 percent over the same time last year. Every available dollar is reinvested back into marketing. Diverting any of these dollars from the TDA budget would have a significant impact on the TDA’s mission to position Jackson County as premier tourist destination.”

For his part, Nestler feels that if a Main Street director position is going to materialize, it’s up to the town to make it happen.

“If we just keep waiting for someone else to pay for things for us, they never happen,” he said. “I’m interested in hearing from other people, other ideas for having other entities help fund this position, but I don’t think that’s very realistic.”

It’s important to be realistic, Hamilton agrees. But that’s why she’s still unsure how feasible it is for the town to foot the bill.

“You have to be practical in decisions you make, and finances kind of handicap us,” she said.

Other issues

Hiring a downtown director would have its share of benefits, but it wouldn’t necessarily be a fix-all silver bullet. Various downtown merchants have various ideas as to what would boost the district’s vibrancy.

Dixie Brendle of Dixie Mae Vintage Market, for instance, blames the conversion of Main Street’s left lane to a left-turn-only lane for many of her business’s troubles. The traffic pattern makes backups common, she said, and deters some customers from venturing downtown.

“If one person doesn’t know how to parallel park, it backs up traffic all the way to Mark Watson Park sometimes, and it frustrates me,” she said. “We’re not exaggerating. We’ve seen it for two years.”

The Tuckasegee Water and Sewer Authority is also a common topic of conversation. TWSA manages water and sewer throughout Jackson County, but unlike many utility providers it uses a model in which new users pay an upfront impact fee for the costs associated with increased use. The idea is that by charging new users, fees remain lower for existing users.

But for a new business — especially a new restaurant, which requires a significant amount of water and sewer capacity — the upfront cost can be daunting, $20,000 or more. If a new restaurant moves into a space that was formerly occupied by another restaurant, no impact fee is required, but if the last user in the space was a non-restaurant, then the fee is required.

According to Peters, the effect on the restaurant community is tangible.

“In our walkable downtown we have four restaurants now. At one point we had nine,” she said.

It’s a trend that will need to be reversed if downtown is to thrive, she said.

“If you want to revive a downtown, you get real good restaurants, then the retail comes and then the residential comes as a result of that,” she said.

TWSA has been making an effort in recent years to be more business-friendly. In 2015 it launched an allocation rental program, which allows participants to rent allocation for a monthly fee rather than coughing up a large sum of money to purchase it.

However, some feel there is still work to be done. TWSA and the town board are currently coordinating to put TWSA Director Dan Harbaugh on the board agenda sometime soon to discuss the issue.

“Water and sewer are huge for economic development,” Dowling said. “That’s a given.”

They’re thorny issues that won’t be easy to hash out, with solutions that will always be resource-bound. But nobody denies the importance of finding an answer.

“We’ve got to keep this Main Street going,” Wermuth said. “What else does Sylva have?”

Stay in the Loop

The Sylva Board of Commissioners will hold its first budget work session of the year at 10 a.m. Thursday, Jan. 26, at the Sylva Town Hall, immediately following its regular meeting at 9:15 a.m.

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