Steep Rents Push Out Katonah Storeowners

Six years ago, Larry Seeger, owner of Jems jewelry searched for a commercial location in Katonah. He found only one available and snapped it up.

This year, his rent has climbed to $4,800 a month even as sales have declined by 60 percent. So, he began looking for a new space. 

This time, however, he had several choices for setting up shop. He moved from 25 Parkway to 27 Katonah Ave., halving his space—and his rent.

As local business tenants get hit by plummeting sales, some property owners are making rent concessions to entice them to stay in town.  Despite that, empty storefronts have popped up in Katonah with more are on the way.

"It's definitely a slower rental market," said local real estate broker Peter Giner.  "Even prime spots in the middle of town are not rented after several vacant months. The situation is worrisome."

Poor Richard's Tiffany at 192 Katonah Ave. will close its doors in May 2010 after 20 years at 200 Katonah Ave.  People are playing it close to the vest, lamented owner Sal Chiappone.

"Instead of new lamps and shades and stained glass, I'm mostly repairs."

His rent has increased every year while his business has nosedived. Chiappone will operate his business from his garage starting next spring. 

The Helmes Group, which manages Chiappone's property, is sorry to see him go, but according to office manager Kevin Helmes, their rents are fair and comparable to other spaces in town.  (For 955 square feet, Chiappone's rent was $2,500 a month). They're also losing another 20-year tenant, Try & Buy Toy store this month. 

Charles Department store co-owner Jim Raneri likens the current conditions to the 1970s downturn when people had put a freeze of spending.

"Katonah is a family-oriented town. At one time, shoppers could come into town, go to a bakery café, buy baby clothes, toys and get their health food at Mrs. Greens," said Try & Buy Toy store owner Barry Schwartz.

Today, shoppers have few reasons to come into town: one, they can get quality, but cheaper food at the A&P store in neighboring Mount Kisco, two, they shop online and three, they are busier than before to saunter into town.

One sign of the slump is the abysmal drop in foot traffic in town, remarks Schwartz.  

The demand for commercial real estate has fallen as well. "The downturn has shaken business confidence, said Coldwell Banker Jack Bushell. "We've had several potential tenants including a kitchen showroom and a high-end pet accessories store—they get as far as obtaining a lease, but can't close the deal."

Businesses are waiting to see if banks will lend, said Bushell. 

Indian Auto Collision owner Paul Berry has been trying to lease his space at 9 Edgemont Road for almost two years, lowering the rent from $5,500 to $3,400 a month. 

But that didn't help matters.

"I had one potential tenant, an art gallery owner, but they couldn't get financing. The recession is stifling small businesses here."

Local consumers are careful about what they buy, opting for more practical goods in lieu of new earrings or art.

National commercial forecasts predict a bottom for commercial real estate next year, with recovery strongly tied to the overall economy. Katonah attorney and property owner Tom Antonecchia thinks Katonah's comeback will follow. 

"We're taking it on the chin like everyone else," he says.  "One of my tenants, Boo Girls, recently halved her space, but I was able to find another great tenant in the Richard Oliver House—Katonah is a great retail town and will make it."

"Let's hope for a better 2010," said Seeger.