By Ron James

The hand-scrawled sign taped to the glass doors simply stated: “Closed — Out of Business.” Many folks in Hillcrest were shocked and saddened when Hillcrest Stationers, a business that has served the community for more than six decades, closed its doors for good this month.

Uptown News attempted to interview the owner, but he emphatically refused. His decision is understandable; folding a business after that many years is very personal and traumatic. And there’s a lot of trauma going around. Immediately next door to Hillcrest Stationers is the empty building that recently housed Nativa furniture and just across the street is the vacant La Vache restaurant . And within a couple of blocks from there are an additional dozen or so vacant storefronts.

What is taking place in Hillcrest is more or less taking place in all of our Uptown communities to one degree or another. And although the economy is playing a major role in business failures, it is not the only driver. Even in the best of times businesses close their doors for many reasons.

Business failure can be due to changes in neighborhood demographics, such as when a population gets older, and poorer. Or when retail trends change, like big box stores and shopping centers taking away local clientele. Then there are shifts in retail fads — remember head shops, slot cars, drive-in movies and trampoline centers? There are disruptive technologies like the Internet bringing down giants like Tower Records and forcing the closure or major downsizing of daily newspapers..And, of course, there‘s mismanagement, sickness, death, partner friction and retirement — all common reasons for a businesses demise, regardless of the state of the economy.
While the economy is negatively impacting most small businesses in our Uptown neighborhoods, there are some positive signs.

“We’re in a transition,” said Benjamin Nicholls, executive director of the Hillcrest Business Association, when asked about the high number of shuttered storefronts. “Businesses are in a difficult environment, and some are just not going to make it. But the good thing is that even in this climate, new quality businesses are opening up in our community.”

Nicholls pointed out that one of the results of the high number of vacancies is that some Hillcrest landlords are lowering their lease rates. “We’re seeing established businesses from other areas of San Diego moving into Hillcrest because it’s more affordable.”

The demise of a business that may seem to be a casualty of the economic climate sometimes is a result of bad partner relationships. “Bad economic times put strains on business partners that may not be so apparent in good times,” Nicholls pointed out. “I know of more than a few businesses that have closed more from partner break-ups. And some businesses that marginally survive in good times just can’t make it during the bad ones.”
Despite the sour economy, Nicholls suggested that Hillcrest may be prime territory for quality national merchants. “This is a good example of transitions. The Corvette Diner moves out and Urban Outfitters move into the same location. Urban Outfitters is a very savvy organization — they’ve never had to close a store, anywhere. They know that Hillcrest is a very desirable area and has great potential.”

“We’ve been going through a positive transition for the last ten years,” reported Elizabeth Studebaker, executive director of North Park Main Street. “We don’t have many more empty storefronts that in the past, but it looks worse than it seems because of the size of empty buildings that used to house Penney’s and Woolworth. We did lose several of our thrift stores in the last year or so, and that was a good attraction for our area. We had six or seven and we have two or three left. Even the Salvation Army moved out — and they owned the building.”

“About two and a half years ago, we began to experience a surge in bars, restaurants and nightlife businesses,” continued Studebaker. “I’ve had about five times the calls from people who want to open restaurants and bars in North Park, and that’s fine, but we don’t want to have them all concentrated in one area. And the city and parking would prohibit that anyway. We’re hoping that they spread across the district to minimize the negative impact on the residential community.”

“We had a real momentum going as an arts hub for San Diego,” said Studebaker. “And our galleries have pretty much survived the economic downturn. The arts business owners are very creative and have adapted in one way or another, but the momentum really slowed a year ago. Artists still find it difficult to afford the rents for studio and gallery space, and art customers have pulled back on their discretionary spending. We need more commitment from everyone to get the arts movement going strong again in North Park, including the city, the landlords and the residential community.”

That said, Studebaker feels good about the direction of the transition in her area. “We’ve had a real increase in business interest in North Park the last three months — I’m incredibly optimistic.”

Jim Schneider, executive director of the Adams Avenue Business Association, shares that optimism. “It’s really exciting, what’s happening in our community. There’s a few empty stores here and there, but overall I see positive growth. We have had several new businesses start and other even expand. El Zarape restaurant and Blind Lady Ale House are a couple of successful examples of recent openings, and Lestats coffee house even expanded.”

“Businesses seem to be holding their own here, although it is a difficult time,” Schneider said. “I think our association has had a bit to do with that. Our community events have raised our public profile and perception. We have the Taste of Adams Avenue, the Adams Avenue Roots Festival — which draws 50,000 people — and our Adams Avenue Street Festival is Southern California’s largest free music festival. We are also starting a new Farmer’s Market September 9.”

“I think we’re looking very good,” said an upbeat Schneider. “Small businesses are investing in themselves now and are poised to grow as the economy turns around — small businesses really are the backbone of our local economy.”

Ronald Reagan often told the joke about the psychiatrist taking an optimistic young boy into a room piled to the ceiling with horse manure to see what his reaction would be. The boy climbed to the top of the pile and gleefully began digging in with his bare hands. “What do you think you’re doing?” asked the shrink. “With all of this horse manure,” the beaming boy replied, “there must be a pony in here somewhere!”

Ron James is a veteran journalist and radio host whose columns and features have appeared in newspapers and magazines across the country.