Amid global economic turmoil, Ocean Beach merchants see signs of hope

by on September 12, 2011 · 8 comments

in Economy, OB Shop Talk, Ocean Beach

While this summer has seen stock markets plunge, consumer confidence crater, and hopes for a broad economic recovery evaporate, several members of Ocean Beach’s business community seem cautiously optimistic about the future.

Gary Gilmore, owner of Gilmore Family Jewelers on Newport Avenue, has noticed a slight upturn in customer sentiment in recent weeks.

“There’s a little more of a positive attitude right now,” Gilmore said. “All of a sudden, I sold some major pieces.”

Gilmore believes the local economy is coming off a bottom — and he’s grateful that his business has endured the last few years.

“I’m selling a luxury product during recessionary times, so it’s been tough for me,” Gilmore said. “I don’t know if I’ll ever go back to the 2006, ‘07, ‘08 days.”

Gilmore has worked with his daughter to appeal to new types of customers, including younger people who might prefer less expensive, more modern jewelry.

“You can’t wait for people to walk in the door anymore — you have to be in tune to what’s going on,” Gilmore said. And now more than ever, when customers are in the store, “you treat them like royalty.”

Two doors down from Gilmore Family Jewelers is Ocean Beach Hardware, where owner Carl Weidetz also said he’s noticed that business is “starting to pick up.”

Traffic on Newport Avenue seems to be recovering from disruption caused by recent roadwork in the area, Weidetz said. In addition, customers seem to be investing in bigger projects again instead of fixing only what absolutely must be fixed.

Weidetz has also been encouraged by the arrival of new neighbors in and around Newport Avenue. “We’re starting to see some smaller individual shops moving in, and that shows a lot of confidence in the future,” he said.

The loss of easy access to credit has been “the big kicker” since late 2008…

In addition to confidence, entrepreneurs need credit — and according to Denny Knox, executive director of the Ocean Beach Mainstreet Association, credit is still crunched.

“There are very few options for small business people other than cash,” Knox said. Loans, if available at all, tend to come with interest rates starting in the high teens, but when it comes to return on investment, “this isn’t even a 10% world right now.”

The loss of easy access to credit has been “the big kicker” since late 2008, Knox said. For example, many small businesses used to rely on credit cards for short-term financing. When the crisis hit, however, many cardholders were floored by a 1-2 punch of shrunken lines of credit and dramatically higher interest rates.

Knox called the lack of short-term credit “a failure of the marketplace” that has left small businesses hamstrung in recent years.

Indeed, credit concerns recently led long-time Ocean Beach locals Pat and Susan James to seek new owners for James Gang Graphics on Bacon Street, as the OB Rag reported in March.

On June 1, the business was taken over by a group that includes several long-time employees.

“The community has very much embraced the fact that we kept The James Gang going,” said Leigh Ann Bearce, a member of the new management team.

Roger Lovett, who with his wife Yasuko has owned Bernie’s Bicycles since 1989, says business is booming at the Bacon Street shop.

“We’ve been busier than shit,” Lovett said, adding that the strength has come more from repair work than sales of new bikes. He said he thinks tougher economic conditions are a boon for bike shops like his because bikes are an affordable transportation alternative.

“The global economic crisis is actually good for us,” Lovett said.

Of the half-dozen Ocean Beach businesspeople interviewed for this article, only Liz Huffstutler of The Village Kitchen seemed less than enthusiastic about business in the days ahead. A waitress at the restaurant for more than 20 years, Huffstetler has seen regular customers slow the frequency of their visits since the 2008 crash.

“We have seen new faces coming in,” she said. “The last couple years,” though, “it’s been kind of going down.”

Huffstetler said rent for the restaurant — located between Gilmore Family Jewelers and Ocean Beach Hardware — has increased significantly over the years. She said The Village Kitchen’s owner, her father, rents the space and might not renew the lease again.

“We’ve had 24 good years here, so if it’s time, it’s time,” Huffstetler said.

…shopping locally could have a compounding effect on local economic growth…

Knox at the Mainstreet Association said the broader economy’s doldrums date back to the tragic events of September 11, 2001.

“Business has not been fabulous for most small businesses in the last 10 years,” Knox said, though the Ocean Beach economy may have fared better than the economy in general. “I feel like we had far fewer vacancies” than other neighborhoods, Knox said.

Outside of the traditional summertime expansion of payrolls at restaurants, which employ most workers in Ocean Beach, “hiring is pretty flat” now, according to Knox. She said she was sorry to see permit problems close The Joint, a new restaurant that had been expected to employ a couple dozen people in the old Little Chef location at Newport Avenue and Cable Street.

Knox reminded area residents that shopping locally could have a compounding effect on local economic growth as owners and employees of area businesses reinvest their proceeds when they pay rent, eat at nearby restaurants, spend on local entertainment, and so on.

“It really is a self-fulfilling prophecy,” Knox said.

{ 8 comments… read them below or add one }

avatar oBak September 12, 2011 at 10:35 am

“She said she was sorry to see permit problems close The Joint, a new restaurant that had been expected to employ a couple dozen people in the old Little Chef location at Newport Avenue and Cable Street.” Wait, the Joint is not opening back up?

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avatar Sunshine September 12, 2011 at 11:53 am

what permits couldn’t they acquire? after their remodel, it seems a shame to let red tape keep them from opening their business

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avatar Dixon Guizot September 12, 2011 at 1:00 pm

This is unconfirmed info, and I don’t know any more details, but from what I understand, an extensive amount of additional renovation would be required for The Joint to meet code at the Newport Ave/Cable Street location.

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avatar Kenloc September 14, 2011 at 12:47 pm

I heard they opened knowing they didn’t have the proper permits in place,running it as a cash only business in the hopes of raising the money to get the permits while flying under the radar.That obviously didn’t go over well.Hope it reopens,i heard it was good.

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avatar unWASHEdwalmaRtthONG September 12, 2011 at 10:46 am

OB is often a point of destination for me. I had lunch at Azucar yesterday. If the rents were more reasonable, I would consider moving to OB. I think I have the right attitude.

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avatar OB Mercy September 12, 2011 at 6:14 pm

Rents are incredibly affordable in OB IMHO. For a beach community, it blows my mind. For what I pay to live a block from the ocean, I would be 2-3 miles away from it up in Venice in LA, my former home base. Yes, I pay more than somewhere in North Park, but again, I am paying a bit more to live at the beach, and I gladly do so for what it’s done for my peace of mind.

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avatar dave rice September 12, 2011 at 8:39 pm

I find it’s more of a ‘space’ trade-off than anything – when I first moved here in 2005 I was paying about $1000 for a 500 square foot apartment at Abbott and Lotus. The same $1000 would’ve got me maybe 800′ and a newer building where I grew up in East County, but shaving more than $100 off rent would’ve been difficult to do and still live in a decent neighborhood.

What I pay now for about 850′ could probably get me 1500′ and a better yard back east, but at the sacrifice of having the beach, four parks, and a good selection of stores, bars, restaurants, and take-out joints within a five minute bike ride of home. I appreciate living with less space, because it forces me to live with fewer ‘things,’ and to take more advantage of the public spaces that are available to anyone who’s willing to use them.

Granted my first place after high school was a 2 bedroom in Spring Valley for $625, so I’m sure there’s cheaper living out there. But the power went out constantly, the doors and windows were busted, my truck got stolen out of my driveway twice in the span of a year, and ‘Casa Bloods,’ the local gang, held more sway than the local police, which would’ve been a more serious problem than it was if I didn’t know half of them from going to school. There’s no way I’d raise my daughter in an environment like that, even if it was serviceable as the only place willing to take me as an under-aged and un-emancipated signer, my first wife with no job or credit history, her two younger siblings, and her mom who’d been evicted from every place she’d ever rented. Looking back, it was kind of fun standing out in the middle of the night flipping switches and getting a “Good here!” from the top left neighbor to match a “You just killed my kitchen!” from the lower right unit whenever the breakers popped.

But I digress…overall I love OB for being the only urban enclave I’ve ever encountered that mixes the wealthy, the middle class, and the unwashed Walmart thongs of the world.

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avatar dave rice September 12, 2011 at 8:49 pm

Quick props to Gary for his immaculate work – pricey but worth every penny.

And Roger/Yasuko – thanks for not only being an awesome local bike shop that’s the spitting image of the place I cut my teeth in the working world, but for the great service you’ve given me as an unknown outsider over the years. If you’re so busy you need someone to turn wrenches hit me up – I could use a few extra shifts and my daughter has been asking me to take her racing…

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