Retail shuffle hits Ute City Building
September 29, 2012
ASPEN – If it’s fall in Aspen, then the downtown retail shuffle must be under way.
The annual come-and-go activity is definitely under way at the Ute City Building at the corner of South Galena Street and Hyman Avenue, the prime location where leasing rates are climbing upward and at least three of the seven businesses are preparing to leave.
Optical Shop of Aspen, a high-end eyewear store that was founded in 1970, is shopping for a new space, said commercial real estate broker Karen Setterfield. The store, started by rock guitarist-turned-entrepreneur Larry Sands, is now owned by the Luxottica Group, a worldwide chain. For more than 40 years, the Optical Shop has been in various spots within the Ute City Building and today has a street presence on South Galena.
Bloomingbirds, which has sold stylish footwear in the building for 33 years, also is said to be looking for a new location. Owner Patty Patterson could not be reached for comment and an employee at the store declined to comment.
Faboo, which markets European-style clothing for women, is a relatively new company, with a presence inside the building for a little more than a year. Owner Monika Oginski, a native of Poland, said although she would have preferred to remain in the Ute City Building, she’s signed a lease for a space in Mill Street Plaza next door to Brunelleschi’s restaurant because she can’t afford to gamble on the possibility that no prime locations will be available later this fall.
Commercial real-estate broker Ruth Kruger, who represents Ute City Building owner Jim Cox, described what’s going on at the property as an upgrade.
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“We’re looking at making some changes in the tenant mix,” Kruger said. “We’ve been very relaxed about enforcing rules and so forth, as far as allowing businesses to do whatever they could to bring business into the building with sandwich boards and mannequins around the property. I’ve been instructed by the owner to bring it up to a higher standard.”
The higher standard also means more expensive leases for those whose leases are expiring. Kruger declined to speak about details involving individual leases.
“We’ve gone through a recession and we’ve been very generous about not increasing rents over a long period of time,” she said. “It’s time to re-evaluate rent structures and look at getting them closer to market rents.”
She said the businesses that are leaving the building have had “a very nice honeymoon period. We’ve been generous landlords.”
Oginski said she’s enjoyed the Ute City Building presence, mainly in the summer. She said she’s grateful that the building owner will let her keep inventory in the store while she travels in Poland for a few weeks. She plans to move her inventory in October and hopes to be open in the Mill Street Plaza space before Thanksgiving.
“I asked for a long-term lease (from Cox and Kruger) because I was working my business very hard and spending a lot of money on advertising,” she said. “Unfortunately, my lease was short-term and it ends at the end of this month. I was notified that I have to move. I’m extremely sad. I’d rather stay where I am because it affects business whenever you have to move.”
Rather than take the time to negotiate with her current landlord for a new lease at a higher rate, Oginski made the decision to move Faboo a few blocks away. She said she was willing to pay a little more per month, but not as much as the landlord wanted.
“I couldn’t wait because if I wait there’s going to be nothing available to rent and I will have to close my business,” she said. “So I took what was affordable to me.”
Oginski said in the big picture, it seems that Aspen property owners aren’t fully supporting locally owned businesses by going after big-name upscale retail chains that can afford to pay higher rents.
“It’s all about money,” she said. “They only want Gucci, Pucci and (stores) that mark up their items 20 times. Local businesses can hardly survive because locations are so expensive. Only luxury stores with a huge mark-up can survive on the Aspen scene.”
Aspen’s already considered a glitzy town and it’s becoming more of one every year, Oginski said.
“If the property owners don’t start supporting the local businesses soon, we are going to only have luxury stores everywhere,” she said.
Setterfield pointed out that the retail real-estate market has turned around dramatically since the recession a few years ago. In finding a place for Oginski, there was only one suitable place to go, given her parameters for the lease rate and square footage.
“It’s tightened up from what it was,” she said. “The pop-up businesses are not happening now. And even some of the pop-ups have signed on for a longer time and aren’t pop-ups anymore.”
Long-term leases at higher rates are now the norm rather than the exception, Setterfield added.