Seeds of business growth along North Avenue

A skateboarder rolls through the Eastgate Shopping Center past the front of the center’s newest tenant, the Sears Outlet store.



A recent uptick in new business openings on the east end of North Avenue could signal that efforts by a merchants association to improve conditions may be starting to pay off.

About 50 years ago, commercial development on North Avenue was one of the key factors that convinced Main Street merchants to pitch in and revitalize downtown in an award-winning civic project known as Operation Foresight.

Downtown merchants knew they needed to act in order to survive the competition posed by shiny new strip malls like Teller Arms Shopping Center, which was then being developed on North Avenue, according to the history books.

Now the tables are turned. During the past several years, North Avenue merchants and their supporters have been trying to implement plans for their own improvement operation known as the Complete Street Project, leaders of the North Avenue Owners Association said Friday.

While the Great Recession obviously played a key role in contracting business along the avenue’s eastern corridor, inadequate infrastructure is hampering the commercial area’s revitalization, said Brian Bray, a commercial real estate broker and association board member.

Vacancy rates in the sector increased from 13 percent in 2012 to around 16 percent currently, Bray said.

“There’s some gaping holes,” he said.

Even so, 30,000 cars pass along the thoroughfare each day, he said.

“The question is, why aren’t more of them stopping?” Bray asked.

At one time, North Avenue merchants accounted for the largest percentage of sales tax remitted to the city. These days, North Avenue businesses manage to collect about 11 percent of the city’s total sales tax revenue, he said.

Between 2007 and 2012, that amounted to about $25 million into city coffers, according to reports.

The Colorado Department of Transportation is responsible for maintaining asphalt on the roadway, also known as Colorado Highway 6. The state pays the city to do the work, Bray said.

Other infrastructure is the responsibility of the city and private interests in the area, he said.

During the last two years, federal grant money was used to create a plan for improved infrastructure on North Avenue between 12th and 23rd streets. Some of the more than $1 million in grant money was also used to install safety improvements to North Avenue curbs, gutters and sidewalks in 2013, Bray said.

But much remains to be done, he said.

Bus pullouts like those planned in the Complete Street Project would make a huge difference in the way traffic flows along the avenue, he said.

Other amenities like landscaped medians and other green public spaces would encourage businesses to invest in the area and shoppers to stop, Bray said.

PRIVATE BUSINESSES LEAD THE WAY

Several entrepreneurs, together with some well-established names in retailing and business services, may have decided lower rents and the promise of future improvements were enough to set up shop along North Avenue’s eastern corridor, a Bray commercial property manager said.

It is a trend that probably started around the time StarTek decided to move its call center and hundreds of employees back to Eastgate Shopping Center in 2012, the property manager said.

Blue Moose, a barbecue restaurant, and a Subway sandwich shop opened across from Eastgate in recent weeks, Bray said.

Texas Roadhouse down the street recently renovated and expanded its lounge area and continues to serve large crowds throughout the week, a restaurant spokeswoman said.

Most recently, the opening of a Sears Outlet next door to StarTek may signal that revitalization in the area is already under way, he said.

A StarTek expansion into the old City Market space not used by Sears is still anticipated in the near future, Bray said.

StarTek was one of the reasons Rib City decided to remain at Eastgate, said Christina Phelan.

Many StarTek employees dine at the restaurant for lunch. About 90 percent of the restaurant’s business comes from repeat customers, Phelan said.

Some of the new Sears Outlet employees also eat there, she said, which may have had some minor impact on business.

Alan Harbin at Carpetland USA said the center has improved dramatically since a liquor store closed and the transients who favored it cleared out.

Though Carpetland USA sold and installed the new Sears floor covering, the impact of the outlet on the carpet store’s business has been minimal, Harbin said.

“We don’t really do a lot of business based on foot traffic,” he said.

When Cortez Bryant decided to negotiate a headphones marketing deal for his clients Lil Wayne and Nicki Minaj a few years ago, he turned down more money from other more established companies to sign with Beats By Dre for a simple reason.

“There was a bunch of history there, so at the end of the day I took less upfront money to be part of this deal with people who understood pop culture” Bryant said. “I try to stick to that because if I lose touch with pop culture, then I’m out of the music business.”

A day after the sale of Beats By Dre on Wednesday to tech giant Apple Inc., members of the music industry were abuzz about what the $3 billion deal might mean for an area thought to be in an irreversible decline. Label executive Jimmy Iovine and business partner Dr. Dre’s move to Apple has those who make their money on music expecting changes that are generally positive for the overall business — though maybe not for every artist trying to make a living.

“It’s all wins,” said Daniel Glass, owner of Mumford & Sons label Glassnote Records. “It’s a win for everybody and the fact is the value of a copyright, a master, went up a lot. Think about it: The perception and value of music went up because of the amount of hands this will be in.”

The industry inadvertently opened the door for file sharing when it refused to sign a deal with Napster at the turn of the century. Few people pay for music, and with physical and digital sales declining, the value of music has continued to decrease as members of the industry resisted the new — but different — revenue model from streaming.

In the confusion, some forgot the power of music. It’s now about more than the song, something innovative thinkers like Iovine and Dre have never forgotten.

“Apple wouldn’t have been built, at least not the way it was, without music, without the iPod, without iTunes and everything else that follows since then,” said Billboard deputy editor Yinka Adegoke. “We shouldn’t forget that. It’s quite clear Apple didn’t forget that. There is great value to music and this deal is a great reminder of that. Even if you don’t buy music directly, this shows the importance of music in the modern world.”

The deal, which Adegoke calls a “game-changer,” happens at a time of great movement in the business. Only recently have record labels, artists and managers started to accept the subscription streaming model, which pays artists per track play rather than in a lump sum when an album or track is sold.

With digital sales starting to decline, Apple added a streaming radio component to its digital sales catalog, but was still left out of the subscription market. The addition of Beats not only gives the company cool hardware to package with its devices, but also gives it a streaming service, recently launched with much media attention, without building one from scratch.

Spotify’s success — the streamer recently announced it had reached 10 million paid subscribers — the Beats-Apple deal and YouTube’s impending entry into the market have insiders looking differently at the inevitability of streaming. Doc McGhee, manager for Kiss and Darius Rucker, said the movement has changed the minds of many label executives, something akin to “turning a 700-foot ship.”

It might be scary to throw your lot in with a startup, but Apple brings a long track record of success. As McGhee puts it, “They’re the Tiger Woods of tech. They’re not winning as much, but they’re still winning more than everybody else.”

Apple has the track record — and current customer base — to engender trust as its current and future partners navigate the new music world.

“This deal will make music streaming go mainstream,” Adegoke said. “You just have to think about Apple’s access to 800 million credit card accounts, hundreds of millions of devices, the IOS ecosystem. We knew this was coming, that streaming would be the access for music, but we needed something like this to happen so the average person will see that actually paying $10 a month for music isn’t that big of a deal.”

Many expect a rapid consolidation or change in the music world as the giants take the field. For some, the decision on where to place your trust — or your bet — got a lot easier.

“I think this tips it Apple’s way because over the years iTunes has been known as the platform to go access music and to get it digitally,” Bryant said. “I think they’re just going to add on to what they’ve already accomplished, taking people away from physical sales, being ahead of the game with their devices and linking it to the iTunes store so you can purchase music and movies, and I think this will just add to the portfolio. I think the Apple brand, because it’s so strong, will knock those guys out.”


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