Thriving or surviving in downtown Basalt? Business indicators provide mixed stew
March 15, 2017
POT SHOPS TO THE RESCUE?
Longtime Basalt-area resident Norm Clasen has consistently contended that allowing marijuana shops on Midland Avenue would boost vitality in Basalt’s downtown core. Now he’s prepared to test that theory.
Clasen and his wife, Laura, have submitted applications to the town government for one retail marijuana establishment and one medical marijuana shop. They filed the applications this week under the business name of Neat Things LLC, according to their applications. The specific names of the shops haven’t been determined.
They intend to open both establishments in a building they own through another establishment, Three Bears Inn Inc., at 174 Midland Ave.
The Basalt Town Council made a decision earlier this winter that clears the way for marijuana shops on Midland Avenue. The town previously had a provision that required a buffer of 500 feet between parks and marijuana shops. That eliminated a good portion of Midland Avenue’s commercial area because it was within 500 feet of Lions Park, where town hall is located. The council reduced the buffer to 200 feet to be consistent with other local jurisdictions.
The Clasens must still go through public hearings as part of the review of the applications for the marijuana shops.
Sales tax revenue for Basalt increased 3.8 percent last year and set a record, but some downtown business operators say that's an incomplete picture of what's happening in their neck of the woods.
Business indicators show a mixed bag in the traditional commercial core of the town. Property values have been stagnant, based on recent sales. Foot traffic always tails off during winters, but business operators report it's even scarcer than usual this season.
On the other hand, vacancy rates are low as nonprofit organizations and private businesses are snapping up office space in and around the core. Rocky Mountain Institute built a new Innovation Center, and Roaring Fork Conservancy plans to construct an adjacent river center. And some business owners report strong performance.
Rough in retail
Monika Oginski brought Faboo, a women's clothing store, to Basalt three years ago. She was priced out of Aspen by landlords who she said coveted chain stores rather than mom-and-pop shops.
She was treated "almost like a celebrity" when she arrived in Basalt, she said. Mainstay businesses in the downtown area, including Basalt Bike and Ski, Midland Clothing and Bristlecone Mountain Sports, had just relocated to Willits Town Center, another commercial core in Basalt almost 4 miles from downtown. People appreciated that she chose downtown.
Oginski said she adjusted to the move from Aspen to Basalt.
"I quickly realized I must recreate myself to cater more to locals," she said.
Summers have always been Basalt's strength, with anglers flooding the area to fish the gold-medal trout waters of the Fryingpan and Roaring Fork rivers. A wave of second homeowners were added to the mix starting in the 1990s with the opening of the Roaring Fork Club, a private golf and fishing property.
Oginski said she also pulls in tourists from the Sunday Market and other events that Basalt hosts. But winters are a different story.
"Winter is just surviving," Oginski said. "Summer is thriving."
She believes part of the problem is local support has tailed off. People want vitality, but she suspects they spend more time shopping online then supporting their small shops. All she wants, she said, is for people to check out her store. She is convinced she can win them over with affordable lines of clothing and an expert's touch.
"I like to think of myself not as selling clothes but dressing women," Oginski said.
Even though 2016 was a record year for Basalt's sales tax collection, the general retail category — which includes the town's mom-and-pop shops — was down 3.5 percent, showing it wasn't an isolated problem. Retail shops are challenged everywhere by online sales and large chains.
Oginski wonders if the town government did too much to aid Willits Town Center, where 500,000 square feet of commercial and residential space has been approved. She wants the town to assist downtown in ways such as approving a hotel on the former Pan and Fork property.
Decent year for eateries
Restaurants with bars managed a 2.5 percent increase in sales in 2016 over 2015. It's impossible to determine from the town's sales tax reports how businesses in downtown are faring compared to Willits. Individual business' privacy is honored so the reports stick to the broad category.
Cathy Click, co-owner of Cafe Bernard with her husband, Bernard Moffroid, said she feels the business atmosphere downtown is "pretty healthy."
"We have a new restaurant in town. They have a strong customer base," she said, referring to Free Range Kitchen, which opened this winter.
Click said her restaurant's growth in 2016 over 2015 wasn't as great as the previous year. However, 2015 was a record year and 2016 was still better, she noted.
When she looks around downtown, she sees some issues that many towns are dealing with — seasonal fluctuations and some vacancies. Basalt isn't unique in either respect, she said.
A few doors down from Cafe Bernard, the Brick Pony Pub experienced a "slight increase" in 2016, according to owner Greg Jurgensen. "We haven't seen any big uptick," he said.
While many Basalt businesses experience seasonal fluctuations, the popular watering hole and restaurant remains steady year-round.
"Our locals are really our bread and butter, and they're always here," Jurgensen said.
He said he is unsure what Basalt needs to spur greater vitality downtown. There are a greater number of workers now with Aspen Skiing Co. opening its offices and Pitkin County government temporarily relocating to Basalt, he noted.
Click said that while she's generally satisfied, there is always room for improvement.
"Obviously we have some big issues that haven't been dealt with," Click said.
Redevelopment of the Basalt Center Circle property that once housed Clark's Market would be huge, she said, as would a resolution to the Roaring Fork Community Development Corp. property, where the Pan and Fork Mobile Home Park once stood.
Tania Dibbs, who opened an art gallery and creative space in the Riverwalk building two years ago, views the state of downtown differently. Her business model doesn't depend on people walking in and buying art. That's fortunate, given conditions right now in Basalt, she said.
"I would be dead if I relied on walk-in business," Dibbs said. "Town's dead."
While summer is busier than winter, even the summers need a boost. "It needs improvement across the board," Dibbs said.
She was reluctant to wade into local political issues, but she said Basalt has a reputation as being "a difficult place to do business." Public and private collaboration could help create more interesting places that would attract people and spur vitality, she said.
The invisible hand of the free market is affecting downtown as well. Zack Fisher, manager of Basalt Mountain Inn, said 2016 was a "strong year" for the downtown hotel, but the impact of Element Hotel in Willits in its first full year was definitely felt. Summers are the strongest time for lodging, but there are some holes to fill in this year, Fisher said.
He opened an old-fashioned general store downtown in 2015 as a side business, responding to desires expressed by local residents and tourists. The endeavor was short-lived.
"When the tourists are gone, the business is gone," Fisher said.
He believes Basalt will benefit from a Town Council decision that allows marijuana shops to open on more spaces on Midland Avenue, the town's main street. Basalt has received two recent applications for pot shops and another is expected.
"I think the pot shops are going to help," he said. "It'll bring a younger crowd."
Stagnant sales prices
Bennett Bramson, a Basalt real estate agent with a focus on commercial properties, said he is optimistic when he looks at the big picture of downtown Basalt.
The downtown area occupancy rate is about 87 percent, significantly better than the 45 percent of a few years ago, he said. There are essentially six commercial spaces available in the core, he said.
"Office spaces have been at such a premium," Bramson said.
Despite scarce supply, property values aren't soaring. The Crystal River Oil and Gas building at 110 Midland Ave. was the most recent sale. Crystal Office sold the building to Shawn Thomson Investments LLC for $1,320 million on Nov. 18, according to the deed recorded with the Eagle County Clerk and Recorder's Office.
The selling company had purchased the property at the start of the recession in March 2009 for $1.56 million.
In late 2015, Aspen Skiing Co. bought the building at Riverside Plaza, Lot A for $6 million. The seller had acquired the property for $3.2 million in a September 2014 public trustee's sale connected to a foreclosure. The original owner had $12.3 million in indebtedness.
Skico started phasing in 66 employees to its new offices last fall. The occupancy of the 28,380-square-foot space obviously provided a big boost to Basalt's commercial space occupancy rate.
Bramson views the coming and going of shops and restaurants as part of the natural business cycle. Free Range Kitchen opened in a space vacated by a longtime restaurant and is attracting strong numbers, Bramson noted. Cocina del Valle, a taqueria, closed this winter and vacated a space next door that is drawing interest from other restaurant operators.
"We're just working through what the best fit is there," said Bramson, who is working with the owner.
Typically when a retail space opens, someone with a new concept is ready to rent. "Retail in Basalt has always been a challenge," Bramson said.
Basalt Firearms is one of the exceptions. The business in the Riverwalk building is one of the few retailers that expanded during the recession and post-recession era. It went from a 600-square-foot space to a 1,800-square-foot showroom and 600 feet of storage last year. Owner Jonathan Melnick of Baltimore said he doesn't pick up much walk-by traffic except maybe some customers that go to the adjacent fly shop at Frying Pan Anglers. Willits Town Center took over Basalt's flow of retail commerce, he said, stressing he wasn't being critical, just stating a fact.
As a destination business, he said his shop has to make hunting and gun enthusiasts aware of the gun shop and supplies through its individual marketing efforts. He is optimistic Basalt Firearms can continue to grow and become profitable.
"I have a great deal of faith in the future," Melnick said.