Hands linked and heads bent, the group of women stood in a circle, unabashed despite the hubbub of morning diners at Twede’s Cafe in North Bend.
The four women came to pray for the success of Twede’s, and of every business in North Bend and the entire Snoqualmie Valley.
“We love the Valley, and we want it to stay prosperous,” said Samantha Van Nyhuis.
“We thought, what can people like us do for the community?” added Terri Mattison. The multi-denominational circle has spent the past year visiting and praying for every business in North Bend.
Café owner Kyle Twede welcomed the prayers, and with good cause. This winter, Twede closed his doors at the Chew Chew Cafe in Snoqualmie after a two-year run. He and his wife Kathy had high hopes when they leased the restaurant portion of the Snoqualmie Falls Candy Factory from owners Wes and Sharon Sorstokke.
“We got really excited about being on both sides of the train,” he said, “but nobody came in.”
With reduced summer tourist traffic, Twede said both restaurants struggled. Challenges included the economy, a home-body customer base and taxes.
“Another problem is empty buildings,” said Twede, gazing out his front window on North Bend Way.
Vacancy signs
Two years into the recession, vacancy signs can be found on all Snoqualmie Valley cities’ main streets.
In Snoqualmie, the downtown River-to-King-Street block has four such signs, including the former Snoqualmie City Hall and the 3,500-square-foot former Mignone Interiors building.
Out of 52 stores in Snoqualmie Ridge’s six-block commercial center, five storefronts are vacant.
In Carnation, eight business spaces out of about 30 are empty; some have been vacant for years. One spot will soon be filled by a natural medicine clinic, and another, the big blue former NAPA building on Main Street, is in temporary use as a church.
In Fall City, two spaces—the former Video Nites shop and the former tackle shop— are empty, out of an inventory of about a dozen storefronts in the downtown strip. The former owners of The River’s Edge gift store spent more than a year with an empty storefront before opening the Fall City Trading Post in its place a month ago.
North Bend real estate broker and city councilman Dave Cook has tallied some 30 commercial vacancies in that city as of February, totaling more than 50,000 square feet. Cook counts vacancies annually in an effort to understand the local market.
“I’ve never seen as much vacancy as we have right now,” he said. “That’s the worst I’ve seen in my 10 years doing real estate in North Bend.”
While he does not believe North Bend is blighted as a result of the recession, he is concerned about what increased vacancies, unstopped, would mean for the community.
“People like the downtown block parties, the activities that the city is encouraging downtown,” Cook said.
“If businesses aren’t doing well, they can’t provide the necessary donations for those activities. You’ll see that stuff dry up.” Tax dollars for road repairs and city services, as well as private donations to schools, foundations and charities will also stagnate.
“It hurts the community as a whole,” Cook added.
North Bend seems to enjoy an advantage over other cities in the size of its business base, which offsets property taxes. That makes the city more reliant on commerce.
“We have a lot more businesses per se, a lot more retail than the cities around us,” said North Bend Mayor Ken Hearing. “Seventy percent of the city’s general fund comes from businesses.” He said the wealth of commerce has helped keep property taxes from rising.
In Snoqualmie, vacancies are turning at a slow pace.
“We haven’t gotten a lot of new tenants in town lately,” said Mike Kirkland, owner of Snoqualmie-based MK Properties. The city of Snoqualmie owns several buildings that need to be filled up, as well as vacant land in the historic district.
“They’ve added four pieces of inventory,” Kirkland said. “It doesn’t hurt the inventory, but it would be nice if it leased up.”
Besides the Chew Chew Cafe closure, this winter saw longtime Snoqualmie coffeehouse Isadora’s Cafe close its doors, and the departure of KoKo Beans’ prior owner. However, new owners quickly stepped in to fill the gaps at those three businesses. The Down to Earth flower shop also moved within the downtown corridor, filling a vacancy at the Sherman building.
“I would say that we have done quite well through this time period,” Snoqualmie Economic Development Consultant Bob Cole said. “Trying to get that right blend between downtown and the Ridge, people getting used to what works best, where—we’re still going through a period of adjustments.
Cole is optimistic about the Valley’s outlook a year from now.
“We have some real success stories,” he said. “So much of it is optimism or pessimism. We understand that things are tough. It sure would be nice if people could try as much as possible to support local businesses.”
Rent reduction
Rental rates for commercial real estate follow the market, and there are different rates for different parts of a city. Prolonged vacancies mean that landlords aren’t meeting the market rate, Cook said.
“Everything will rent at a price. It’s just a matter of, are landlords willing to drop it?” he said. “There is some reluctancy because of the economy, but I also sense a pent-up energy, from people who want to do something. I’ve met a couple of prospective tenants. They’re hemming and hawing.”
Over the last two years, Cook’s agency has negotiated a number of rent reductions between property owners and tenants.
“It’s very common right now,” Cook said. “We’ll say, Mr. Landlord, you have a tenant that’s hurting. You have a choice. You can lower the rents down and help them survive, or you can sit on a vacancy.”
Landlords may respond by lowering rents or negotiating compromises such as lease terms or improvements to the property. It’s usually in a property owner’s best interests to compromise—Cook said a paying tenant is always better than a vacancy.
“They want to get through the recession as well, they have bills to pay, but the value of their property is dependent on a reliable cash flow from a tenant. They want their tenants to succeed,” he said.
To Cook, success will follow success if more people shop locally.
“It’s become an ignored slogan,” Cook said. “If I’m going to buy gas, I’m going to buy it in North Bend. If you’re hungry, we’ve got plenty of restaurants.
“If people supported the local businesses in earnest… more business would want to move in to the vacant spaces here,” he said. “If businesses continue to falter, then no one is going to be attracted downtown. If people want their downtown to be vibrant, then they need to support it.”
Losing a tenant
Wes and Sharon Sorstokke at the Snoqualmie Falls Candy Factory love their shop—they bought it as soon as they saw it in 1996—but were also looking to try something new. Two years ago, they decided to focus on building their wholesale business, and put the restaurant into the hands of experienced restauranteurs at Twede’s Cafe.
Kathy Twede updated the menu, redecorated with a train theme, and re-branded the restaurant as the Chew-Chew Cafe. Meanwhile, the Sorstokkes “spent the last year and a half just on caramel corn, caramel corn, caramel corn,” said Sharon.
They succeeded in expanding their distribution, but after a slow summer and a Main Street construction project that almost eliminated foot traffic to the café, they lost a tenant and found themselves in the restaurant business again.
“That wasn’t the way we all wanted it to turn out, but the good news is I’ve always loved running the café,” Wes said.
Since January, the couple’s main goal for the restaurant has simply been to net enough income to make up for the loss in rent. So far, it’s been doing that well, enough that Wes hasn’t really felt the loss of that particular tenant. However, he has three other tenants some struggling, one renting space on a month-to-month basis.
As their landlord, Wes is doing what he can to help the struggling tenants, without undercutting himself. After all, he’s still doing business in this town.
“I’m never going to close the doors,” he said. “That’s not an alternative for me because I own the building.”
• Next week, our series on the recession’s impact on local main streets continues, with looks at ways Valley businesses are creatively keeping their doors open and building for success.
