By Margot C. Lester
The greater Carrboro metroplex has felt the recessionâ€™s pinch less than other areas of the state and nation. But weâ€™re not totally immune. Just swing through Carrboroâ€™s two major shopping centers: Carr Mill Mall and Carrboro Plaza. The empty spaces are evidence of the recessionâ€™s reach.
Laundry washes out
At Carrboro Plaza, the Stock Building Supply store has been shuttered since mid-May. The sign on the door says the closure is â€œdue to economic conditions.â€ Stock closed several stores throughout the South as part of its reorganization under Chapter 11 bankruptcy. Ferguson, the plumbing supply house, continues to occupy part of the space.
â€œItâ€™s a bit unclear right now as to whatâ€™s going to happen with the showroom,â€ says Terrill Wipper, who handles leasing for Carrboro Plaza. â€œFergusonâ€™s has indicated theyâ€™d like to take a portion of that space, but we havenâ€™t reached an agreement. Thereâ€™s also some new-tenant interest in the 3,800-square-foot Stock space.â€
Elsewhere at Carrboro Plaza, a 1,200-square-foot space is available between Curves and the Carrboro Community Pharmacy. The 4,800-square-foot former Super Suds space also is on the market. The laundry closed last month after its lease expired.
â€œWeâ€™ve been working on a couple deals for that space for a totally different use,â€ Wipper said.
Bead store unstrung
Over at Carr Mill, the Original Ornament closed earlier this month. According to a sign posted by property manager Nathan Milian, the store is closed â€œindefinitely,â€ after 11 years at the location, and the space is available for lease. Store owner Casey Schlatter was unavailable for comment.
â€œMs. Schlatter gave up,â€ Milian says. â€œShe turned in her keysÂ and indicated she was filing bankruptcy, although we have not been notified as such.
Apparently, one of her lenders called her line of credit and she couldnâ€™t pay it off and that was the straw that broke the camelâ€™s back. Beyond that, I do not know anythingÂ else.Â â€
Fixtures and inventory remain in the store because they were put up as collateral for a loan from the Town of Carrboroâ€™s revolving loan fund. Earlier this year, Schlatter applied for and won a six-year, 3 percent loan for $70,000 from the town. (The Citizen received a $50,000 loan from the fund in the same cycle).
Milian is hoping to find qualified buyers to purchase the items fromÂ the lenders.
â€œHowever, if I find another type of tenant before that, then the stuff will be packed up and stored,â€ he said.
The business was struggling, according to Schlatterâ€™s loan application: â€œWith recent and intense competition and with a customer base that is still growing, but that is spending less (decreased revenue), we are forced to look to programs and outreach for sources of income. To do so, we need additional funds. We have been denied loans at Wells Fargo, Self-Help Credit Union, Fidelity Bank and Wachovia.â€
The revolving loan fund is designed in part to help local businesses that cannot raise capital through other means.
Whether the town will get back the money it loaned Schlatter is uncertain at this time.
â€œWe have to wait and see,â€ said James Harris, the townâ€™s economic development director.
Fed: The end is near
Last week, economists with the U.S. Federal Reserve indicated that the economy was stabilizing, potentially signaling an end to the recession. Economic data â€œsuggests that economic activity is leveling out,â€ officials wrote in a statement issued Wednesday.
Even so, the Federal Open Market Committee remained committed to keeping interest rates low for the time being. It voted unanimously to keep the inter-bank interest rate in the historically low 0.0 to 0.25 percent range. This is the difference between the rate at which banks borrow money and the rate at which they lend it.
What does that mean to you?
â€œLow-risk borrowers should have reasonable borrowing costs so long as the Fed keeps rates low, but the rest of us will find financing less available than before the crisis for some time,â€ explains Ed Van Wesep, assistant professor of finance at UNCâ€™s Kenan-Flagler Business School.
The Fed also decided to continue purchasing mortgage-backed securities.
â€œThe purchases of mortgage-backed securities directly benefit many of us,â€ Van Wesep notes. â€œ[It] makes it much easier and cheaper to get a conforming mortgage. This allows sellers to sell houses more quickly, buyers to buy more efficiently and cheaply, and will hopefully stem the tide of foreclosures to some degree.â€