Recession Tour: Obama Shops, Empty Shops, & A Cup Of Hope
The economy is tanking, companies are laying off workers by the thousands, and in downtown Washington's East End, there were enough empty storefronts for four Obama Inauguration souvenir shops to open for short stays this month. So it's understandable that some merchants along Seventh Street NW wince as they talk about Aaron Gordon, who just opened a shop at Seventh and E.
Gordon is selling frozen yogurt. In January. In a storefront where the previous tenant lasted only eight months.
"Yeah, everyone thinks this is a cursed location," Gordon says. But he's confident enough to laugh as he says it, because despite the recession, Seventh Street NW is remarkably busy.
A steady stream of customers flow into Gordon's TangySweet shop and into the adjacent Red Velvet cupcake store that Gordon and his sister run. At Sei, a new sushi place a few doors down, tables were full even before the restaurant officially opened last week. All along the street, according to developer Douglas Jemal, who controls many storefronts stretching up past the sports arena, there's sufficient traffic to keep businesses afloat. "We don't have one delinquent account on Seventh Street," Jemal says.
The ravages of the recession are in plain view in spots around the region -- malls where empty storefronts pop up like big boxes did in the boom-time '90s. At first glance, Seventh Street may look similarly pocked with failure. The Bead Museum, just down the block, closed last month. Olsson's bookstore died last fall. Jemal's effort to lure a grocery store didn't work out.
But restaurants are moving into at least a couple of the empty storefronts.
"Seventh Street is at a crossroads," says Catherine Timko, whose D.C. company, Community Retail Catalyst, works with neighborhoods to attract retailers. "It's had some closings and the rents have been soaring, but foot traffic is strong."
Washington is not the recession-proof city it seemed to be when government was more dominant in the local economy, but at least here, consumer spending is chugging along, in part because the city has suffered relatively light job losses so far. And part of the reason for that is a boost from a new administration.
Gordon, 35, a native Washingtonian whose first TangySweet shop opened near Dupont Circle last summer, chose this location because of the apartment and office building boom of the past 15 years, a change that has given Seventh Street a far busier feel than it has had since before the 1968 riots that knocked out major retailers.
"This area is cutting edge, vibrant, the feel that Georgetown had when I was growing up," he says.
With a Smithsonian museum, several theaters and the Wizards and Capitals all within a couple of blocks, Gordon believes he can sell enough yogurt to pay Jemal's $100-a-square-foot rent -- a figure some merchants consider outrageously high. (Jemal says downtown rentals are lower than the market can bear. Time will tell.)
"It's scary," Gordon concedes. "The open spaces along the street are a concern. But the neighborhood is still up and coming." He will probably have to keep the shop open deep into the night to make his nut, but Gordon and others believe the street is morphing into one of the District's main restaurant rows.
Seventh Street, once home to major department stores, served from the '60s to the early '90s as a depressing illustration of the District's decline. Then came the arts and sports.
Margery Goldberg's Zenith Gallery was one of a handful of arts start-ups that took advantage of low rents, good space and proximity to the Mall to create what they optimistically believed would be a Gallery Row.
Two blocks up, the visionary Abe Pollin, intent on moving his basketball and hockey franchises into the city, built an arena with his own money, sparking a wave of development.
Now Goldberg is closing her gallery after 22 years on Seventh. She'll keep selling artwork from her home. "I remember all the economic downturns -- double-digit mortgages, the Gingrich shutdown, the first Gulf War," she says. "People are more freaked out this time. It's empty storefront after empty storefront here."
Goldberg blames landlords for charging exorbitant rents and the city for providing insufficient police protection.
But what Goldberg sees as an ugly emptying looks like the churn of progress to others.
"Life is about change," Jemal says. The recession "has hit like a tsunami." In downturns in the 1980s and '90s, "there were still viable banks lending money for projects. Today, everything is shut down. But the businesses are making it, and we're ready to expand when the money starts flowing again."
Some Seventh Street eateries surprised themselves by doing better in December than they had a year earlier, says Jo-Ann Neuhaus, director of the Penn Quarter Neighborhood Association. "We didn't set out to be a restaurant and entertainment center, but that's what's happened, and for now, people are still coming."
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