With the threats of light rail and condo construction as well as big business.
Tempe and Phoenix small businesses are banding together to build success.
It’s what small businesses, like art galleries and cafes, complain about in areas where artsy enclaves are replaced with corporate centers. Areas where contemporary galleries and alternative eateries lose business because light rail construction and condo conversions.
Areas like Tempe and downtown Phoenix.
"When I used to come to downtown Tempe, there used to be things going on," says Andres Yuhnke, founder of Phoenix’s Counter Culture Cafe, a coffee shop and venue for local performers which has struggled against corporate interests for survival. There would be bands at Long Wong’s or acoustic bands set up on the street corner. They would close off Mill Avenue every weekend, the way they do now for an arts festival."
But small business owners like Yuhnke can complain, or they can change. And many Tempe and downtown Phoenix shops, galleries and cafes are doing just that – banding together to strengthen their collective efforts instead of giving up in that face of big-business competition and the gentrification of Phoenix and Tempe.
Being bullied?
From heavy light rail and condominium construction to the age-old problem of big-name chain stores competing with local shops, small businesses in Phoenix and Tempe have recently had many reasons to worry.
Arley Dial is the owner of The Headquarters, a smoke shop in Tempe that was forced to move from its home of 17 years, when the owner of the property sold it to build high-rise condos. "The city [of Tempe] is not real excited about helping out [small businesses]. It’s like pulling teeth," he says.
Michael Pawlicki, an employee at Eastside Records in Tempe, says he agrees with Dial. "I don’t think the [city of Tempe] has cared for years," he says.
Some students, like journalism senior Ashley Harris, say they agree that Tempe development has focused more on profits than creating local flavor.
"What they seem to be trying to do is build condos and apartments for ASU alumni. They are trying to capitalize on the 20-something professionals who went to school at ASU and loved Tempe," Harris says. "The funny thing is that whatever they probably loved about this city is being torn down to build the condos. It’s utterly ridiculous."
Business cooperation turns cohabitation
For businesses in Phoenix, like Counter Culture Cafe and The Paper Heart, keeping a cultural atmosphere alive in the face of competition has been difficult.
Yuhnke says Counter Culture Cafe was "bullied" out of its location on 24th Street and McDowell Road, forcing it to forge an unconventional partnership with The Paper Heart gallery.
"A lot of people would come in [to our old location] and say it reminds them of Haight-Ashbury, and that was really what I was going for," he says. "I was trying to recreate that vibe and have ‘counter culture’ not as just a meaningless slogan."
At The Paper Heart gallery in downtown Phoenix, art hangs from the walls as performers belt out songs and poems on a stage nestled between narrow support columns. It’s a mellow atmosphere for a gallery and performance venue that was close to failure at the end of last year: The Paper Heart almost closed because of the high costs of running a gallery in downtown Phoenix.
Luckily, The Paper Heart found help in an unlikely place: the struggling competition.
With both The Paper Heart and Counter Culture Cafe facing financial difficulties, the two venues decided to cut their losses and work together. In November, Counter Culture Cafe moved into The Paper Heart.
The partnership was ideal because it brought food and drinks to The Paper Heart, giving patrons a reason to stay after performances, says owner Scott Sanders.
The Cafe also had a similar set up as Paper Heart. "We were a location where people could meet and hang out, artists could show art, people could perform, and we would have bands, poetry and a lot of things that were similar to what was going on [at The Paper Heart] except on a smaller scale," Yuhnke says.
Now, Yuhnke says the symbiotic relationship has worked well, and he describes their situation as "less like tenants and more like roommates."
The Paper Heart regulars say there are benefits from the melding of the two businesses.
"It’s unfortunate that two excellent local businesses that had nice locations, good premises and loyal customers had to scramble to save themselves, but I have no complaints about having both under one roof. Now … I think both of them will thrive," says Chase Kamp, a journalism sophomore who frequents The Paper Heart.
Following the business partnership model, The Headquarters and Eastside Records in Tempe recently established a similar relationship. After The Headquarters’ eviction, Dial turned to a local music store, Eastside Records, which was balking at the increase in rent it was facing. The two businesses agreed to split the space that Eastside inhabited.
Forming alliances is an effective strategy for struggling businesses, says Gary Naumann a lecturer at the W. P. Carey School of Business. "Any sharing of resources is always a good idea," he adds.
Uniting for shared survival
As corporations continue to open Valley locations, small businesses that would once consider one another competition are now sharing resources.
Three small business owners founded Arizona Chain Reaction two years ago, seeing the need to work collectively with other small businesses against large corporations.
The nonprofit group, like many others that have cropped up nationwide, works to educate consumers about the importance of shopping locally, to help small businesses better market themselves, and to lobby local governments to be more small business-friendly. Membership in Chain Reaction is at an all-time high of nearly 1,000 businesses.
"It’s not just a national trend; it’s a national issue," says Cindy Dach, secretary/treasurer and co-founder of Arizona Chain Reaction, citing Keep Us Weird, Local First and other efforts going on in cities across the country. "There seems to be kind of a kickback [against large corporations]. People want to go into a business and recognize people."
The majority of the group’s efforts are directed at consumers, convincing them of the value in shopping at small Arizona businesses. The group – operating under the mantra "Think independently, buy locally" – makes bumper stickers and features a directory of member businesses on its Web site, azcr.org.
The group also trumpets the greater local tax revenue when consumers shop at locally-owned businesses, which it says increases by 75 percent.
"When people complain that the schools are awful and the streets are awful and then go to … a Gap, they don’t realize they are sending their revenue out of state," she said. "All of our members are front-line marketers for the cause of shopping locally."
The group also works to network local businesses together, so they can support each other’s efforts. Chain Reaction sponsors quarterly mixers for members at one of the business owner’s bars and hosts a yearly festival, where local businesses sell their wares and local musicians perform. At the most recent festival, 4,000 people attended and 100 businesses took part, Dach says.
Lastly, the group lobbies governments to change local laws that reward developers for working with big businesses and for knocking out old businesses through tax incentives and discounts.
"It’s a lot easier for a developer to come in and call Borders in Ann Arbor and bring in a bookseller instantly rather than finding local bookstores," Dach says as an example. "So we’re turning more into policy [and] advocating, [and] going to a lot of city meetings."
Still, the shopper ultimately decides.
"So much of the weight of this is on the consumer," Dach says. "The consumers need to make the demand that this matters to them."
Sharing the market
But not all of the players in Phoenix and Tempe’s redevelopment agree that small businesses are suffering because of construction and bigger competitors.
"I have not seen any instances of developers bullying small businesses," says Brian Kearney, president and CEO of the Downtown Phoenix Partnership, an organization that promotes businesses and tourism in downtown Phoenix.
"Developers generally like to have these [small] businesses as part of their tenant mix because of the unique, local flavor they provide," Kearney adds.
Downtown Phoenix planning reflects a strong desire to encourage small, local businesses to be a big part of the downtown offering, Kearney adds. The city and METRO light rail even have an outreach plan to assist small businesses affected by the construction that includes a discount card and free signs.
But some participants in Phoenix business partnerships say light rail construction is causing more trouble than Kearney might think.
Dach says light rail construction affects both small and large businesses.
"I’m not going to say that light rail has a direct or indirect impact on smaller businesses more than big business, but national chains can weather the storm better than a smaller business can," she says.
And unlike smaller businesses, which are sometimes willing to work together to succeed, big business chains don’t care if their success comes at the failure of their competitors, Naumann says.
"They don’t wonder, ‘How is this going to affect the little guys?’" Naumann says. "It’s clearly [a] free market … that’s how [the bigger businesses] are able to keep their prices down. The best way for smaller businesses to compete is to find their own place in the market."
Hopeful about the future
Many in the downtown, small business community think that there is room for both large corporate and small local businesses. Dach says that even her group recognizes that a person cannot shop only at local businesses.
"We are asking people to try one out of five times to go to a local business," she says.
Zaiden Kirchheimer, vice president of Artlink and coordinator of the monthly Phoenix event First Fridays, says she thinks there will always be people who choose local businesses over corporate ones.
"Personally, genuinely given the option, I’m going to choose local," she says.
Kirchheimer was born and raised in Phoenix, and her parents would take her to small, cultural events in the city. She says she’s seen firsthand how small businesspeople and small gallery owners are all willing to work together.
"My experience with Phoenix is that it has a very tight-knit and active community of artists, of small businesses, and of just active people who are interested in their community," she says.
Her experiences make her hopeful that both corporate businesses and small stores and galleries can coexist in the Valley.
"I think that there’s a strong foothold in the arts community and people that are passionate about supporting small businesses, and it is my hope that they are going to be able to hold their own while other businesses come in alongside them," she says. "I think there’s enough people that value small businesses and like to have an interesting, culturally rich place to live for [them] to succeed, but it definitely takes a conscious effort."
by Matt Mueller
Article can be found: http://www.statepress.com/issues/2007/04/26/style/701065
