Chain reaction

Downtown Asheville is at a crossroads. The city’s thriving central business district is enjoying a full-blown renaissance driven by an eclectic, ever-shifting mix of boutiques, restaurants, galleries and clubs.

It wasn’t always so. A mere two decades ago, downtown Asheville was home mainly to boarded-up buildings. Scarcely anyone who had other options lived downtown, and after 5 p.m., they just about rolled up the sidewalks.

After voters killed an early ’80s plan to level much of downtown and replace it with a giant mall, however, determined citizen entrepreneurs, with support from the Downtown Development (now the City Development) office, began bringing new life to the area. By the 1990s, the movement had reached critical mass, and Asheville’s increasingly lively downtown began attracting national attention.

These days, though, some of that attention is coming from franchises and corporate retailers eager for a piece of the action — and not everyone seems happy about it. Some fear downtown’s unique character may be lost as faceless chain stores crowd out one-of-a-kind, homegrown businesses. Others believe these newcomers will bring much-needed jobs and tax revenues. Still others maintain that chains and franchises take the money and run, siphoning off profits to distant corporate headquarters rather than recycling those dollars locally.

But what sometimes gets lost amid such skirmishes is the long view. Asheville’s downtown, in fact, has weathered many rounds of fundamental change. As far back as the 1920s, pharmaceuticals magnate E.W. Grove drastically rearranged the central business district in keeping with his own grand vision for his adopted city — dismantling the old Battery Park Hotel (and even removing the hill it stood on). Ironically, one of his ambitious projects — the Grove Arcade — now serves as a newly restored centerpiece for historic-preservation efforts, even as Asheville appears poised for a new wave of large-scale development.

And as battle lines are being drawn, Xpress decided to check in with a few of the latest downtown entrepreneurs.

What’s in a name?

“Are you going to make me look like an evil businessman?” Marble Slab Creamery owner Glen Lax wants to know. “As franchises go, I’m an independent businessperson. The money [this store makes] is not going to some mysterious place. It’s not a company-owned store.”

The sweet smell of sugar hits you like a brick when you walk into Lax’s shiny new Biltmore Avenue store. A handful of kids are chowing down while their mothers chat; their comments reveal them to be out-of-towners. Lax, however, says his business serves a mix of customers.

“We’ve had a great response from both tourists and locals,” he reports. “Of course, we rely on tourist business in the busy season. It’s an advantage to have the name recognition.”

Lax and his partners own four Marble Slab franchises: in Greenville and Columbia, S.C., plus Charlotte and now Asheville. Lax, who’s originally from Knoxville, proclaims, “I’ll live [in Asheville] forever!”

But why start a Marble Slab here? “There’s no ice-cream shop in the downtown area,” Lax replies.

Well, there’s Kamm’s Custard Shop on Page Avenue, and Sweet Heaven Ice Cream & Music Cafe, just a stone’s throw away in Montford.

“Kamm’s is a different concept,” Lax replies. “Sweet Heaven and the Hop have a different concept.”

Marble Slab’s concept, he says, is its emphasis on fresh ingredients. “We looked into other franchises, but this is better as far as quality. We make everything fresh in the store.”

So why not just go for a do-it-yourself business?

In a franchise, Lax explains, “all the initial business decisions are made. Plus, there are discounts on pricing. They [the parent corporation] don’t have anything to do with day-to-day operations, but this is a proven business. It takes the guesswork out of it.”

Carol Hensley of the Asheville Area Chamber of Commerce concurs. “If you’re not an experienced business owner, you’d want to purchase a franchise, because the [parent company] has done its homework as far as customer target base, town size, ideal location, etc. They make sure a city meets their criteria; for example, they wouldn’t let you put a Gucci in Candler. The franchise gives you training, and they help you negotiate a lease. That’s why you pay the franchise fee.”

Following the money

But that fee — and the continued financial connection to the parent corporation — are part of what bothers Christopher Fielden of Community Supported Development, a nonprofit grassroots group. “The thing about franchises not based in Asheville is that every dollar spent there leaves the community,” he asserts. “If I spend $10 in Wal-Mart, that money goes to Arkansas [Wal-Mart is currently relocating its purchasing headquarters to China]. If I go to Malaprop’s, that money is recycled through the community.”

Of course, the wages Wal-Mart pays its employees and the property taxes paid to local governments do remain in the local economy.

According to a Dec. 10, 2002 report commissioned by the Austin-based nonprofit Liveable City, local merchants there contribute up to three times as much money to the local economy as retail chains do. Liveable City works to build community consensus and promote policies addressing Austin’s long-term social, environmental and economic needs.

A similar study released last month by the Institute for Local Self-Reliance in Maine found that locally owned businesses spent 44.6 percent of their revenue within the two surrounding counties, and another 8.7 percent in the state. National retailers, on the other hand, spent an estimated 14.1 percent of their revenues within the state and local economies.

In the August 1997 issue of the Main Street News (a newsletter published by the National Main Street Center, a project of the National Trust for Historic Preservation), Director Kennedy Smith quoted a U.S. Small Business Administration report as saying, “Locally owned businesses return 60 cents of each dollar to the community, and chains return only about 20 cents.”

Franchises, however, are yet another story, weighing in somewhere between “big box” chain stores and totally local mom-and-pop establishments. “Franchises and chains are two different animals, but similar in economic impact,” explains Rodney Swink, director of North Carolina’s Main Street program, a project of the state Department of Commerce. “If there’s a local owner, they keep a percentage of money local. But when they buy the package that gives them a right to [use franchise names, advertising, etc.], they also agree that a percentage of sales go back to a parent corporation over the long term. They don’t buy the package in one lump sum.”

He continues: “As retailing has changed this past decade, first leaving cities [for the suburbs] and now reconnecting with urban spaces, we’re seeing franchises wanting to relocate to urban centers. They’re looking for places like Asheville. That’s a good thing initially, because it means you’re being noticed, but [having franchises] bids up the [real estate], making it harder for local businesses — and they’re the ones that made it desirable to begin with.”

And then there’s the question of what, exactly, is a chain? Asheville Downtown Association President Kim MacQueen cautions: “You have to be careful not to call any business with a couple of stores a chain. What about Barley’s? [The owner] is an Asheville local — what are you going to do, kick him out of town?”

She adds, “Some people would like to see a chain like Old Navy anchor downtown.” As for existing downtown businesses, MacQueen mentions the Mast General Store, a North Carolina-based retailer with stores in Asheville, Boone, Hendersonville, Valle Crucis and Waynesville, plus Greenville, S.C. “I can’t argue [with the idea] that a store like Mast General is good for downtown,” she observes.

Fielden, however, believes that independents — and maybe even established businesses like Mast — would have a hard time competing with a giant like Old Navy. Big corporations, he maintains, tend to undercut small businesses by buying lower-cost foreign goods. “Local shops,” notes Fielden, “are closer to home, so we have a better idea of where the merchandise comes from.”

The entrepreneurial spirit

Port City Java, a growing name in coffee, is now gaining ground locally. But Manager Holly Mayne stresses that the Battery Park store is not a franchise. “It’s privately owned between Nick and Paul Rantzos,” she says. “The only agreement between them and Port City is that they sell Port City Java coffee. Port City doesn’t decide on employees, dress code or decor.

“In Wilmington,” Mayne explains, “the shops are part of the Port City Corporation, but every one is different. They don’t have a corporate feel. Here, the coffee menu is the same [as other PCJ franchises], but the sandwiches aren’t. The owners designed two of the wraps.”

An interior stairway links the downtown Asheville Port City Java with longtime downtown fixture Kostas Menswear (owned by Kostas Rantzos, the father of Nick and Paul). But what brings in the customers — many of them tourists — is not so much the Rantzos’ reputation as the Port City name recognition.

Still, that connection also carries a downside. “We get a lot of negative vibes from people thinking we’re a chain — a Starbucks follower,” Mayne admits. “It’s hard to let people know it’s privately owned.”

Gene Woolf, who co-owns Atlantic Books with his wife, Amelia, also gets some benefit from name recognition, especially among bibliophiles who’ve spent time in Charleston. The Woolfs previously owned two Atlantic Books stores in the South Carolina city. After losing their Bay Street lease, however, the Woolfs decided to relocate to Asheville. Selling their remaining Charleston shop to their son, the couple bought a home in the mountains and their current Broadway storefront, which opened last April.

“We avoid the idea of chains,” notes Woolf. “We’re one of a kind — well, two of a kind, if you count my son.”

The Woolfs’ decision to move north was hardly a whim. “We watched Asheville over the years and came up here a lot,” Gene recounts. “We did a lot of research before opening the shop. Asheville is a city of bookstores, and they’re just as nice as can be.” He muses, “Hopefully, so many bookshops downtown can draw business away from Barnes & Noble.”

Anywhere, U.S.A.?

“I believe in a free-enterprise system,” proclaims MacQueen. “When all is said and done, the business with the best product and service is probably going to come out ahead. Local businesses can work on doing what [chains] can’t, like knowing their customers’ names and donating to local organizations.”

Chamber of Commerce staffer Hensley points out that in some cases, franchises may have more to offer a business owner — especially one who’s just starting out. “If you cluster of a group [of franchises] in an area, you get the benefit of advertising. The corporation produces ads, and they co-op them by area. If you want to start a business and you’re just moving into town, a franchise gives you credibility. For all that, you pay the franchise fee and ongoing royalties.”

That continual stream of revenues leaving the community, of course, is what concerns folks like Fielden and Swink. Hensley, however, downplays the importance of those payments, saying, “It may be that what the community loses in royalties might be insignificant [compared to] what they make up for in name recognition.”

Would an influx of national names change the face of downtown Asheville? “People aren’t coming to Asheville to go to the mall,” observes Hensley. “They’re coming for the uniqueness, for the crafts and galleries. But people have different ideas [about] different categories of businesses. When it comes to food, people often don’t want surprises; they want the comfort of knowing what they’re going to get.” Hence, nationally known names.

Anntony’s Caribbean Cafe, recently installed in the Grove Arcade, blends nicely with the downtown ambiance, though associate Daniel Neel is quick to point out that the restaurant isn’t a chain.

“There’s one in Charlotte,” he reports, “but the owner, Tony Martin, sold the idea — the rights to this place — to [Asheville] owners Doug Gall and Byron Greiner. This is the only other Anntony’s, but they have future plans.”

So why buy an idea instead of coming up with your own take on the Caribbean theme? “It’s such a good idea, and such great recipes,” Neel exclaims. “The recipes come from Tony’s mother Ann [hence the name], who was from French Guiana.” And Martin himself grew up in the Caribbean, Neel reveals. “It’s amazing how many people in Asheville have dined at the Charlotte location and come back here two or three times a week,” he adds.

Beyond the Gap

“Once you’ve attracted larger businesses that can pay the bigger rents, everything tends to move in that direction.”

— Kim MacQueen, Asheville Downtown Association

Longtime Asheville resident Rosalind Whiteley took a decidedly different approach to opening her Page Avenue business — the eco-friendly, ultra-hip children’s store Heaven Rains Boys & Girls.

“I felt like there needed to be a baby boutique in downtown with specialty wood and metal toys and heirloom-quality toys,” she explains. “When Anna [Whiteley’s daughter] had Nevaeh [Whiteley’s granddaughter], I saw a need for her to be able to nurse while she was working.”

So the shop supports on-the-job mothering while offering upscale children’s items. It’s independence at its finest. “This store offers me the ability to use all of my imagination,” proclaims Whiteley, pointing out that being a three-generation business was more important to her than buying into the quicker financial return offered by a franchise.

“We’re ecologically minded, with a focus on imaginary play,” Whitely explains about the toys she stocks, none of which contain plastic parts or require batteries. “I can offer a bigger variety to the community, more individuality,” she notes, citing her various brands of vintage and organic-cotton children’s clothing. “We have many lines people have never seen before, like Under the Nile (Egyptian cotton) and Green Babies (American cotton). This way, we’re not all shopping at Gap.”

As if echoing Whiteley’s views, MacQueen reasons: “One thing Asheville has going for it is it’s so unique. When you’re downtown, you know you’re in Asheville.”

She continues, almost wistfully: “How do you keep the balance between businesses that bring in a lot of money and unique shops? I personally think the balance should swing toward the independents, but once you’ve attracted larger businesses that can pay the bigger rents, everything tends to move in that direction.”

Hensley, on the other hand, says property owners prefer long-term tenants. “Landlords want rent stability,” she notes. “If they feel like they’ll get a more stable tenant in the franchise, that will get the nod [or the lease] over Mr. Joe’s pocketbooks, or whatever.”

And Fielden favors an altogether different path. “I’m big on supporting the local economy,” he explains, adding, “I’d like to see an alternative currency develop in Asheville, like in Ithaca, N.Y.” (Dues-paying members of that city’s community co-op are given “Ithaca hours,” which can be spent at participating local businesses.) “By doing that, we’d reduce our dependency on outside sources. I’d like to see Asheville become sustainable.”

Fielden adds hopefully, “It’s just a matter of time before that happens here.”

Cities are hardly immune to changing fashions. In the 1970s, mall fever threatened the central business districts of many American cities with extinction. Now, downtowns nationwide are once again becoming the hip place to be. Future trends, meanwhile, are anybody’s guess.

Whatever direction this city is headed, though, there seems to be no shortage of dreamers convinced that its future is somehow linked with theirs.