New store openings give glimmer of hope as downtown's pulse weakens

MONTROSE — A tighter economy has worked its way to Montrose. In the retail industry, much like other areas, a vicious cycle has emerged where economic problems feed off of each other.

Consumers are spending less, due to job insecurity, and therefore businesses are losing income. Some have even closed their doors. The effect has led to fewer sales taxes passed on to the city, which now struggles to fund retail enhancement.

"We need our businesses to be successful," said Juli Messenger, director of the Montrose Area Merchants Association (MAMA). "If they are successful, our local economy is healthy. The two are inseparable."

According to the city's retail sales tax collection, 2008 school shopping in August showed strong numbers. However, the four months to follow were all below 2007 collections, bringing retail sales tax collection to only 2.8 percent over the previous year. In 2007 and 2006, that percentage was around 8 to 9 percent.

The holiday season in Montrose, which retail sales tax shows was down 5.6 percent in November over 2007 and down 3.1 percent in December, had mixed reviews from local businesses.

For Tiffany, Etc. owner Glee Westcott, this holiday season was comparable to last. However, she noticed 2009 started out more conservative. She believes her specialty items, and loyal customers, helped.

The slow start to 2009 and a cautious holiday consumers, put a toll on the downtown area. It's noticeable in Westcott's disappearing neighbors.

Downtown's Radio Shack is moving to the south end, where it'll sit among some of the larger corporate retail stores, a move Maurices already made.

Over the past year, downtown book stores have closed, their buildings still vacant. Three of six art galleries, whose shops were bustling during Main In Motion, are also dark. Jan's Hallmark is closing at the end of the month. Its closing leaves only four businesses — Niko's Tavern, Belly restaurant, Cimarron Creek and Devinny Jewelers — on the north side of the 300 block of Main Street.

But it's not just the downtown area struggling. South of town sandwich enthusiasts saw Quizno's shut its doors last summer. The Natural Market also closed down.

But there are glimmers of hope.

At the former Blue Sky Music location, Texano Boots displays merchandise in the windows. A Grand Junction women's retail store, Pollux, is moving into the former Island Breeze location downtown. Several new businesses have opened just off Main Street on Uncompahgre Avenue.

In June, Vitamin Cottage Natural Grocers is expected to open in the River Landing shopping center. The vacated space in the Oxbow Crossing shopping center is being taken over by current businesses wanting to expand. And despite rumors, a Target spokesperson said there are no plans to shut down the retail store in Montrose.

"Because of the economy, the Dollar Store is just pumping and the liquor stores are showing strength as well," said Polly Hohlenkamp, property manager for River Landing and Oxbow.

The old Gibson building is also seeing some action. A tobacco store, which plans to serve sandwiches, coffee and pastries, is an expected neighbor to the Dollar General.

Hard times call for community and organizational support.

Earlier in the month, the MAMA board meet to discuss its objective this year — which has to be specialized to fit the struggling economy.

"We just had a strategic planning session," Messenger said, "to figure out the best way to use our resources to assist the retailers this year. We sent out different jobs to the committees and will focus on that and exclusively that."

On Feb. 10, MAMA board member David Crane shared with the board advertising suggestions he heard from retail members.

"The feeling was that people in Montrose generally do shop in Montrose," Crane said. He said Montrose needs to target shoppers who have a choice to go somewhere else, like tourists and residents in surrounding communities.

But MAMA is feeling the economic downturn as well. On Feb. 5, the city of Montrose released its final 2008 sales and use tax numbers and showed a 4.1-percent decrease in taxes collected over 2007. This was the first time a decrease had been seen since 1986. The city was forced to re-evaluate its budget because numbers were 8.1 percent below what was reflected in the 2009 budget.

MAMA is funded through a city contract, the Retail Sales Enhancement Fund, which is derived from a percentage of the sales and use tax.

Because of the tax collected in 2008, the city fell short of the funds needed to fulfill its 2008 contract with MAMA. The city was only able to put $295,585 in the Retail Sales Enhancement Fund, where the contract called for $296,000.

It's possible that if numbers drop yet again in 2009, the city could fall short once more.

But as the Montrose downtown area, along with other parts of the city, see businesses closing their doors, MAMA finds its role even more important.

Messenger said the community, not just MAMA, needs to support businesses.

"There has never been a more important time to support local businesses," she said. "Supporting local businesses means supporting local jobs, which means supporting our local economy."

Contact Kati O'Hare via e-mail at katio@montrosepress.com