A new era on Main Street sows strife for merchants

As rents rise in changing market, retailers fear for futures

Doug Hollinger has owned Park City Clothing Company for 24 years. He says surviving on Main Street is harder than ever, and he fears that local retailers will be increasingly replaced by regional or national brands in coming years.
(Tanzi Propst/Park Record)

She had packed all the boxes and emptied the store, and there was nothing left to do but take one final look around.

Regret tinged Julianne Rosen-Carone but her resolve persisted.

For the first time in more than 30 years, Rocky Mountain Christmas, a purveyor of tree ornaments and other holiday trappings, no longer had a home on Park City’s Main Street. It was not the first time Rosen-Carone, who has owned the company since 2006, had been priced out of a storefront, though, and she remained confident that she would find a new space nearby within a few months. She hoped to reopen in time for the Christmas season.

Over the next few months, the naiveté of her optimism became apparent. The finality of that April day, her last at 523 Main St., eventually set in. Rocky Mountain Christmas, known throughout Utah for its one-of-a-kind offerings and as a mainstay on Main Street, had been shuttered for good.

“I thought we’d find something, or somebody in the community that owned a building or had space would say, ‘I’d rather get a fair price and keep a longtime business, an iconic representation of the historic district here,’” she said. “… Now I realize that it’s over. We’re never going to find a brick-and-mortar spot again. Not in the historic district, at least.”

Rosen-Carone had been dragged under by a confluence of trends that has entrepreneurs all along Main Street nervous about the future. While the restaurant industry and certain kinds of businesses are prospering, increasing rent prices spurred by Park City’s rising profile as a world-class ski town have cornered some small merchants into the same plight as Rocky Mountain Christmas.

Others, still, are hanging on, watching as a string of regional and national retailers they claim threaten the street’s unique flavor begins to surround them.

The situation has become dire enough that business leaders and city officials are considering measures, however small, to mitigate the effects. But at a time when local merchants are asking whether it’s possible to thrive, or even survive, on Main Street, another question emerges: If the answer is no, what is to become of the area that has long served as the soul of Park City?

Some are optimistic the historic district will remain vibrant and authentic for decades to come, untainted by the free-market forces that are changing it. From Rosen-Carone’s perspective, the outlook is bleaker. She foresees a possible future where mom-and-pop retailers vanish almost entirely from Main Street, supplanted primarily by national or regional brands.

If that happens, she said, it will be something for Parkites and others who value Main Street’s idyllic charm to mourn.

“It loses a local feel,” said Rosen-Carone, who has tried to continue her store online and recently took a job with the Park City Chamber/Bureau. “People on vacation will go, ‘Oh, it’s another Patagonia store or it’s another The North Face — I can buy those at my local sporting goods shop at home.’ They don’t bring anything unique. It’s not going to be feeding the local economy. It’s going to be feeding corporate interests.”

A price predicament

Doug Hollinger remembers when times were less tense on Main Street.

Hollinger and his wife, Margie, have owned Park City Clothing Company for 24 years, and they credit the shop and its prime position on Main Street with creating a comfortable life for them. But gusts of change have blustered through the area in recent years.

Outside of his shop’s walls, Hollinger has watched as a number of friends and fellow entrepreneurs have left, shoved out by rent increases, dragged away by the lure of retirement, or simply because the long hours for ever-diminishing returns had beaten them down. Inside his store, Hollinger has not been insulated from what has been happening around him.

He is quick to note that he’s in a better position than some. His rent bumps up yearly but the increases are small enough that he can afford them. And after the year remaining on his lease, he’ll have an option to renew for five more years at a similar rate.

He is grateful. Without the option, he said, there’s little chance he’d be able to sustain the shop beyond the next year, even if his landlord cut him a deal below market value for being a longtime tenant. The prices building owners can fetch on Main Street these days are simply too steep for a business like Hollinger’s to manage.

“My God, I don’t know what we’d do if we were at the end of our lease,” he said. “In most cases, our rent would probably go up, I bet, 50 percent. At that, we can’t do business. We can’t do that. We just can’t generate enough business.”

Hollinger has good reason to suspect his rent would increase by a large margin. According to data from the real estate firm Cushman & Wakefield Commerce, the price for retail space in the Park City area has surged since 2014, rising from an average of around $40 per square foot to more than $55 in the second quarter of 2016. Main Street, in particular, has fueled that escalation, with most new leases going for about $65 per square foot and some properties demanding upwards of $80, said Steve Hooker, director of retail, leasing and investment for the firm.

According to Hooker, who came to Park City in 1985, it’s not hard to understand why prices have soared. After years of growth and increasing visitation, he said, Main Street has simply matured to its full price, similar to the evolution of other resort towns. It’s a natural process, even if it plunged some business owners into a state of sticker shock.

“It’s a very hard reality to be in a very high-growth neighborhood like Main Street that has high prices,” he said.

As hard as it was to stomach for Rosen-Carone, she does not begrudge landlords who have an opportunity to cash in during a boomtown era along Main Street. But she does worry that even small retailers who are well positioned to remain in business for years because they own their buildings will succumb to the allure of the zeroes their spaces could yield on a rent check.

“They can close their businesses and sell their space and retire pretty nice,” she said. “Good for them. They bought when the time was right and have a very valuable investment now. But it’s not going to be another mom and pop buying their space.”

If there is an encouraging sign for businesses that are surviving at $60 per square foot, it’s this: Since the spring, Hooker said, lease prices have stabilized and plateaued, and it appears likely they’ll stick in their current range for the foreseeable future. That’s reassuring for some businesses, but Hooker acknowledges there are plenty who can’t endure the status quo. For those businesses, there is good reason to fear that Main Street has passed them by.

From Hooker’s perspective, that’s nothing new. He said stores that are unable to reinvent the way they approach customers and their product lines have always struggled on Main Street, where prices have been swelling for decades, albeit not by the margins seen recently.

Hooker knows from personal experience. In the 1980’s and 1990’s, he owned furniture and clothing stores on Main Street, but was priced out when rents started creeping into the $20s. He sympathizes with the plight of any retailer encountering a similar fate now, but said the street will continue to be vibrant as other companies with business models more suited for the current market supplant them.

“Retail has never been easy,” he said. “It’s not easy now, and it wasn’t easy 20 years ago.”

For Hollinger, it may not have been exactly easy 20 years ago, but times weren’t as tough as they are now. Along with the small rent increases each year, he has had to stave off stiff competition from online retailers and the rising cost of doing business that has constricted his margin of error.

Hollinger’s business can adapt only so much to keep pace. There’s a limit to the price customers will pay for a hat or jacket or pair of boots, so he has had to get creative to stay in the black. Park City Clothing Company, for instance, will gift wrap purchases, deliver products to customers in the Salt Lake Valley and even take customers’ shoes to the repair shop.

“You try everything you possibly can,” he said. “You try to find that little niche that people can’t get anywhere else. And you hope that adds up to make the difference.”

Given that, Hollinger is thankful he got into business when he did, saying he would be “stupid” to open the store on Main Street today. The times are stressful enough that he and his wife are waiting to see how this ski season goes before deciding to accept the five-year renewal option on their lease. Having witnessed the hardships other shop owners have endured, he is anxious about what it might take to keep his shop afloat.

“I don’t know that I want to start going back to putting in five days a week of 10 or 12 hours a day,” he said. “We did that for a long time and I don’t want to get back to that.”

What it means for Main Street

Andy Beerman understands the pressures that are squeezing businesses like Park City Clothing Company. Beerman and his wife, Thea Leonard, own a roughly 30-percent stake in the Treasure Mountain Inn and the company that operates the historic hotel, and their business is also grappling with shifts in the marketplace.

For years, the inn has thrived near the top of Main Street, Beerman said, because it was one of the first properties in town to wield the power of the internet. But it has become more difficult for the company to prosper without hitching the inn to a national brand. That’s one of the reasons he and Leonard decided earlier this year to try to sell their holdings in the business.

“Today, am I competitive? Yes,” he said. “Am I worried that five or 10 years from now, it’s going to go too much in a different direction? Yeah.”

Beerman, though, is in a position unlike other entrepreneurs on Main Street: As a Park City Councilor, he has a say in what measures the city pursues to alter some of the market forces beleaguering small retailers in the historic district.

But his response to a question about what City Hall and organizations such as the Historic Park City Alliance, a group that represents the interests of businesses on Main Street, can do to ensure local retailers remain part of the Main Street tenant mix illustrates why many merchants believe the situation is too dire to realistically reverse.

Put simply, Beerman — and city staffers who have spent months exploring the Main Street business climate — appear unwilling to use the city’s resources to prop up failing businesses by subsidizing their rents with public money. It’s not the city’s role, he said, to tip the scales of the marketplace in favor of mom and pops.

“I’m concerned,” Beerman said, “but that’s different than being willing to monkey with the free market.”

That still leaves the city with a range of options to help nurture small business in different ways, however, according to Jonathan Weidenhamer, economic development manager at City Hall. One possibility is to develop vacant land used for parking off Main Street in the historic district, then offer the space for an affordable rental price, similar to the deal the city struck with the state liquor store on Swede Alley.

The city could also install necessary utilities on Swede Alley and construct a sidewalk to encourage businesses to build there, a less desirable area of the historic district where rent prices would hover below those on Main Street. Such a market evolution would incubate a new, distinct economy of local businesses on the back side of Main Street.

Weidenhamer acknowledges, though, that those options still may not inhibit large retailers, with their deep pockets, from snatching up space along Main Street. Already, stores such as The North Face, lululemon, Marmot and Patagonia have staked out storefronts along the street, and the prospect that chain stores may eventually overrun the area is one he is worried about, though he remains hopeful about the future.

“What makes us unique and authentic is that real people own real businesses on the street,” he said. “They aren’t businesses you necessarily see at Kimball Junction or in Salt Lake City or every other resort town. Every mom and pop that we lose cuts into that unique and authentic (feeling). That, to me, is cause for anxiety.”

Beerman, for one, is ready to embrace whatever Main Street evolves into over the next decade or two. He is nostalgic about Park City’s past, and will surely lament whatever is lost from this era, too, but he insists change is inevitable and natural.

And he is optimistic that, despite the change, the atmosphere of Main Street will subsist well into the future. Even if chain stores — whether regional or national — eventually dominate the area’s retail space, he believes the town’s flourishing restaurant industry and art gallery scene will salvage its vibrancy. Additionally, he said, the city has been diligent about zoning and historic preservation in the area, ensuring the street-level ambiance will remain the same, even if the shopping experience is different.

He said city leaders would do well to learn lessons from places like Aspen, Colorado, where residents have “fought for the soul of their town.” Aspen is well known for being high end and exclusive, but retains a “fun and funky” vibe.

“We are going to lose some of our local business flavor, but we’re still going to keep that wonderful look and feel of the historic district,” he said. “So even if we do get an increasing number of chains or more high-end businesses, it’s still going to have that charm.”

Others aren’t so confident. To Hollinger, the thing that elevates the experience on Main Street is the array of one-of-a-kind businesses peddling goods visitors can’t acquire at shopping malls or other resort towns. Rosen-Carone, who bought Rocky Mountain Christmas a decade ago to save it from closing because she felt it encapsulated the town’s history, said stores born on Main Street and oozing Park City charm endow the historic drag with its identity. Without them, the street’s character will evaporate, no matter the appearance of the buildings.

“You’re losing that true representation of the people who have lived here a long time,” she said, “These businesses represent the community and the passion we have for Park City.”

More than six months after closing Rocky Mountain Christmas, people still approach Rosen-Carone, lamenting the loss of the store’s presence on Main Street and wistfully evoking recollections of their visits to the shop.

She fears that one day soon, her fate will befall more merchants. And if that happens, she said, memories of better times will be all that’s left of the Main Street they brought to life.

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