Bills Without Borders: The Cost of Closing a Bookstore in Pico Rivera
Borders bookstores are closing up all over, including several in the SoCal region, with more shut-downs just announced. In Pico Rivera, the Borders at the city's Towne Center is one of the first-round stores to get the ol' bankruptcy boot, but, as the Whittier Daily News reports, the bill for bringing books for sale to the community is still unpaid.Based on agreements drawn in 2002, the lease on the 18,100-square-foot retail site is the obligation of the city, who already "spent $1.6 million in federal grant money" to get the store in the shopping plaza in the first place. No matter when or why Borders takes off, the contract between Pico Rivera and the shopping center owner, Phoenix-based Vestar Development Co., stipulates the city must "pay the company $33,932.91 a month for 72 months until a new tenant comes in."
Borders is considered one of the "anchor" stores in the plaza, and was brought in through a joint effort by the city and the Redevelopment Agency, "to enhance educational and cultural opportunities," not to mention bring in sales tax revenue, which it did; According to Assistant City Manager Jeff Prang the Borders "generated about $35,000 a year in sales tax revenue," reports the Daily News. Pico Rivera touted themselves as one of the few predominantly Latino communities in the region to have their own big-chain book retailer.
Pico Rivera Councilman Gregory Salcido says the city has money from the original grant left to cover the expense, however he expects a private negotiation with Vestar to take place to determine a more appropriate monthly payment on a vacant spot. Pico Rivera says they aren't aware how much the monthly rent has been for Borders in the spot, and Vestar isn't talking. The city agreed to subsidize the rent "by $10,833.33 a month for 15 years," and city officials believe that is the only amount they should have to continue to pay once Borders moves out for good.
Specific reasons for why Pico Rivera's Borders was among the over 200 picked to shut down during Borders' Chapter 11 bankruptcy, however stores that got the as are considered "under-performing" locations. Most of the Borders locations, including Pico Rivera, and the handful in liquidation in the Los Angeles area, are expected to shut their doors in April or May.