A Little Shop Owner's Horror: New Landlord, 180% Rent Increase
Washington Post Staff Writer
Monday, June 28, 1999; Page F13
The Bakelite bracelets, glittery earrings and old glassware in Elia Fuentes-Dumas's Dupont Circle shop are all on sale, 30 percent to 50 percent off. As the signs in the window say, she's lost her lease.
For her customers, it's a chance to grab a bargain, but for Fuentes-Dumas, finding out that she will close her four-year-old business in a few months was an emotional blow. "I was sad, I was mad, I was angry -- now I'm just tired," said the proprietor of Glorious Revivals, an antiques and collectibles store at 1749 Connecticut Ave. NW.
What's happening to Fuentes-Dumas and her neighbors is an example of how capriciously fate can treat a small business. In 1997, more than 885,000 businesses were formed across the nation while 857,000 closed, according to the Small Business Administration. Businesses can fold because financing dries up, because competitors steal customers or, as in the case of Glorious Revivals, because costs shoot out of control.
The building where Fuentes-Dumas rents space for her small store was purchased earlier this year by Starwood Urban Investments, a District real estate development firm that has been aggressively buying property in the neighborhood. The partners at Starwood Urban envision filling those buildings with big, flashy upscale retailers that cater to affluent residents and tourists.
But gentrification has a price. Making room for such stores, many of them national chains, means kicking out smaller stores that can't afford steep new rents. It's something that is happening in many neighborhoods -- downtown, Georgetown, Dupont Circle or any suburb where an aging strip mall is being renovated.
Glorious Revival's rent is $2,500 a month, or $30,000 a year. Fuentes-Dumas says she has been told that if she could keep her space in the building, rent would jump to $84,000 a year -- not exactly workable for a business with annual revenue of about $90,000.
The storekeeper, who works six days a week and employs two part-time helpers, is not sure what happens next. She has been told she'll have to be out Oct. 31. She's looking for space nearby, but it's scarce and expensive. One spot on Connecticut Avenue, for instance, is being marketed at $12,500 per month. "I don't think any small business can afford that," she said.
Maybe, she said, she'll switch to selling through a World Wide Web page or eBay, the Internet auction house. She's arranging for her business phone number to be transferred to her house, so she won't lose contact with customers and suppliers. Whatever happens, she has other options -- during her foray into retailing, she has kept her dentistry license active.
Fuentes-Dumas, who was born in Chile, has been in the United States for 26 years. She earned her dentistry degree from the University of Maryland; she had a private practice and taught at Georgetown University.
While she liked the work, it wasn't her sole interest. She has always collected things, particularly old jewelry. "My mom used to say I would need two houses -- one for me and one for my stuff," she said.
She and her husband, dentist Armand Dumas, have lived in the Dupont Circle neighborhood for 18 years. Four years ago, she noticed the shop on Connecticut Avenue was empty and decided it was "a good time to make a change," she said.
"When this space became available, I thought it was a dream come true," she said.
She didn't expect the shop to make her rich. It's profitable, she said, but that has taken time. "They told me it would take three to five years," she said, "and I think that's a good estimate. This was our fourth year, and I would say it is the first year it was very comfortable."
The entire time, she said, she has invested everything she made back into the business.
"This was like pulling the rug out from under my feet, just when I was just making it," she said.
Fuentes-Dumas has no idea what will happen to her space when she closes. She and other merchants have heard rumors that the building will be rented to the Gap or perhaps to Urban Outfitters. Starwood Urban isn't telling.
Said Fuentes-Dumas, "I wonder how much the neighborhood is going to change."
© 1999 The Washington Post Company