Increases in rent prices leave small businesses struggling on Laurel Street in San Carlos, presenting both opportunities for large retail chains and threats to a unique downtown.
Family-owned businesses that have served as community hubs for decades are beginning to sell their buildings to developers such as JMS Development, which owns many properties on Laurel Street. For example, JMS purchased The Reading Bug, a children’s bookstore established by the Savage family, in Dec. 2019 for about $5 million, according to co-founder Lauren Savage.
Since then, the store’s rent has increased from $1 per square foot to $1.44 per square foot. This monthly rent remains below the market rent of $4 per square foot, according to JMS founder John Baer. Its lease ends in 2027, at which time JMS could demolish the building and build a new two or three-story structure in its place.
The store opened in 2008 when San Carlos was still relatively sleepy. Today, with a population of around 30,000, San Carlos boasts many unique attractions, drawing visitors to San Carlos in a “coming of age” that included an influx of downtown shops and a corresponding increase in market rent.
“It’s sad in a way to be that instrumental in building a community, and still fighting after 14 years in that place to be there,” Savage said.
Small businesses can bring a small-town feel to communities. In addition, independent businesses often hold deep personal significance for the owners. In the case of the Reading Bug, Savage knew she wanted a “special place” for her children when she founded the bookstore with her family.
“Small businesses are definitely a labor of love,” Savage said. “They’re exhausting.”
However, San Carlos risks being taken over by larger enterprises that can better afford the rent as small businesses are forced to shutter and developers seek new tenants to fill vacant buildings. Many feel that independent businesses are essential to Laurel Street. If small businesses are replaced by chains, the street could lose its allure.
“It wouldn’t feel as special or unique, so I wouldn’t have an interest in going there,” junior Ruby Rappoport said.
Some worry that the continuing trend of chains and higher-end stores will contribute to a generic downtown lacking in character. However, in today’s world, this seems almost unavoidable. From a developer’s perspective, such a downtown is a success. It’s lively, its storefronts are full, and it’s thriving. For JMS, anything is better than vacancies.
“It’s really just capitalism at work,” Baer said.
The city tries to encourage residents to shop locally, according to San Carlos Mayor Adam Rak. Additionally, it plans to close the 700 block of Laurel Street to traffic permanently. A pedestrian mall could help support businesses by encouraging potential customers to gather downtown.
“San Carlos has traditionally liked a downtown with small businesses,” Rak said.
The city also attempts to appeal to young people. Rak spoke to the San Carlos Youth Advisory Council and understands that young people need more things to do downtown.
“We want downtown to be inclusive and good for everybody of all ages,” Rak said.
Sophomore Annette Kinser prefers Laurel Street over Redwood City due to its walkability, small businesses, and good restaurants.
“There’s a ton of good shops,” Kinser said. “I love going there with my family as well.”
However, the city has no control over rent. Building owners and developers can set whatever rents they choose.
“They’re going to get as much money out of us as they can, then knock it down,” Savage said. “A developer is not someone who really cares about you, it’s someone who cares more about being profitable.”
The city is working to promote Laurel Street and provide tenants with as much foot traffic as possible. Recently, residents gathered at the annual Night of Holiday Lights on Laurel Street, the city’s holiday festival, while a local student choir caroled.
“We’re going to continue to invest in the downtown to make it even better,” Rak said.