I’ve been seeing a lot of cynicism about the state of the local economy in 2013.
And I get it.
It’s hard not to be cynical when favorite stores and restaurants — ones you thought were doing well — announce they’re closing.
And it’s hard not to be cynical when five years have passed since the beginning of the recession and so many economic indicators still haven’t returned to their pre-recession levels.
After years of trying to tell readers the local economy was in more danger than most folks understood, the City Talk message these days is that the local economy is faring much better than many realize.
Part of the problem might be that we don’t make fine enough distinctions in our discussions between “recovery” and “recovered.” The recession ended in summer 2009, and we’ve been in a recovery since then.
But that recession was the deepest since the Great Depression, and the recovery has been hampered by the housing crisis.
We can’t really say the economy has fully recovered until employment and other key economic measures are back to their 2007 or 2008 levels.
Or even higher.
But many citizens don’t follow economic data closely. They judge the economy based on what they see.
And in recent weeks, many Lowcountry residents have seen favorite stores and restaurants close up shop.
Why businesses fail
Over the years, I’ve written about dozens of new businesses that have subsequently closed. Most of those have been in the downtown area.
There’s a unique story behind every closure, but a couple of issues stand out.
Many small business owners overestimate the number of customers they’ll have on a day-to-day basis. Some just don’t have a good read on the market and the demographics.
Savannah can deceive. The beauty, the bustle on busy days and the heavy tourism combine to make entrepreneurs overly optimistic. They just aren’t prepared for the long slow stretches.
And a fair number of small businesses that go under don’t have good business plans in place. Their rent is too high, they spend too much on labor or loss, they’re undercapitalized and can’t keep up with expenses.
Or they can’t deliver a consistently good product.
But why have so many businesses closed in the last few weeks?
It’s easy to forget from year to year, but lots of establishments close in January, which is always a terrible month for employment.
Retail stores see business surge around Christmas but then fall off precipitously. Many restaurants slow down in January, too.
Hefty alcohol license renewal fees are also due at the first of the year, which always leads to closures and delayed openings in January.
It’s also worth adding that some small businesses go out on top. Some are still profitable, but the owners decide the time has come.
The reasons for confidence
In previous columns I’ve listed some of the more prominent downtown closures, but there are more to add to the list, including Casbah Moroccan Restaurant on Broughton Street and Barnes BBQ Express on Whitaker Street.
The original Barnes is, of course, still open on Waters Avenue. And the Casbah’s sister restaurant The Mirage is still open on Broughton Street.
A couple of downtown nightspots have not reopened since Jan. 1, but they could be revived soon.
It’s easy for cynics to latch on to the continued closings, but for some reason they have trouble seeing the risk-taking and entrepreneurship filling the voids.
The former Saigon space at Bull and Broughton streets has been redivided into two storefronts. The corner is already leased and work is under way on the adjacent space.
A new venture is taking shape in the former Lime Grill on East Broughton Street.
As has been reported in this newspaper, Tondee’s Tavern will open soon in the former Tony Roma’s space on Bay Street.
There are a number of new retail establishments I hope to write about in the coming weeks.
Then there are all of those major developments along the river and elsewhere in the greater downtown area that have been covered extensively.
Last week came the especially good news that we’re about to see renovation, re-use and new construction at the southeast corner of Montgomery and Congress streets. With Marc by Marc Jacobs behind it and City Market across the street, that corner could once again be a linchpin of downtown’s commercial landscape.
I get where the cynics are coming from, but the reality on the ground is changing faster than they realize.
City Talk appears every Tuesday and Sunday. Bill Dawers can be reached via billdawers@comcast.net and http://www.billdawers.com. Send mail to 10 East 32nd St., Savannah, Ga. 31401.