Borough business exodus?

Explanations vary for pending sales

By: Dick Brinster and Vic Monaco
   HIGHTSTOWN — The three largest restaurants in town — Theo’s Lakeside Tavern, the Hightstown Diner and Genovese’s Restaurant — are among at least seven local businesses or business buildings, including Michael’s Plaza, up for sale.
   Most of the owners are tightlipped while borough leaders and observers have explanations that run the gamut from pure coincidence to national trends to failed local policy. It is unclear if the high number of listings could be related to the borough’s skyrocketing tax rate and a pending tax revaluation.
   "I don’t think we should come to that conclusion," said local Realtor Richard Van Hise, a lifelong resident who is selling his Stockton Street building because of his pending retirement. "Revaluation is not necessarily an evil thing if people understand that it just determines distribution of the tax burden of each individual property based on market value."
   Councilman Larry Quattrone, longtime owner of Dom’s Getty on Mercer Street, said the revaluation, recently ordered by Mercer County, shouldn’t be a reason for business sales because "commercial properties’ assessments usually go down; that’s how it’s been going across the state."
   Jeff Bond, a local businessman who owns five downtown properties with several business tenants including Genovese’s, also discounted the impact of local taxes.
   "I pay a lot of taxes too and I’m building another building," he said in a reference to a recently approved plan for a two-story retail/office building on Mercer Street.
   Mr. Bond, a member of the local Economic Development Committee, pointed out that the borough has about 100 businesses and "every downtown store is filled."
   "So there happens to be seven or eight that happen to be up for sale. Big deal," he added.
   But there are some who see it as a bigger deal, with bigger issues at play.
   Borough Councilman Dave Schneider, who owns restaurants in Princeton and Hopewell, said restaurants are the victims of increased costs for gas and electricity nationwide.
   "People in my industry, with less-than-high-level restaurants, are suffering from the fact that people’s money is going other places," he said.
   "It’s not a reflection on Hightstown," but rather the failure of the Bush administration to rein those prices in, added the Democratic councilman.
   Mr. Van Hise says local business demographics have changed over the years.
   "Back in the ’60s there used to be two women’s clothing stores and two men’s clothing stores downtown," he explained. "There’s a transition in what is successful in a downtown center and what’s successful in a strip mall."
   But former Borough Councilman Gene Sarafin says its more about a change in overall demographics. He says there are more lower-income residents in town who don’t frequent specialty shops or higher priced restaurants.
   "Minimum-wage people don’t shop as much downtown; they shop at Wal-Mart," he said.
   While commending the borough for welcoming lower-income residents, the perennial critic of local government said, "For every good, there’s a sharp side of the knife.
   Another former councilman, Dan Buriak, says the potential exodus of downtown businesses shows that the borough needs to steer its focus away from downtown streetscape improvements and toward the town’s most viable asset: its historical character.
   "The focus on hanging baskets and new sidewalks needs to shift to give Hightstown a purpose as a destination," said Mr. Buriak, who lives on Stockton Street and was instrumental in obtaining its state and federal designation as an historic district. "Economic revitalization of the neighborhoods will drive the commercial sector, and increasingly demand specialty shops, restaurants, etc. Not the other way around."
   "Building more parking lots isn’t helping the borough, as we’re seeing with this exodus of business," he said. "Incidentally, some commercial turnover is good, but this trend is just too huge to ignore. … It is unfortunate that the businesses have not been successful given the recent bricks-and-mortar progress in the downtown. But bricks and mortar are not a vision. They only lay the foundation for the borough to execute a vision of an economically viable and thriving borough."
   Councilman Walter Sikorski said he was "shocked to learn about all the pending sales" and expressed concern with the impact that could have on the redevelopment of the former rug mill property, which includes plans for office and retail space.
   Does he think rising taxes are to blame?
   "That is difficult to tell," he said. "I’m not privy to the books of the businesses."
   Mayor Bob Patten said he doesn’t see anything out of the ordinary.
   "It’s the nature of business," he said.
   The mayor also said he doesn’t see any link to the borough’s tax rate recently rising 18 cents.
   "Business is based upon volume," he said.
   "I have some concern," he added, "but I’m confident that the Economic Development Committee will do the right thing to attract the right businesses to come in."
   For his part, Mike Vanderbeck, head of that committee, is among those who said they doesn’t see "any real connection" among the pending sales and believes some of the owners are simply "testing the waters."
   Mike Theokas, whose family has owned Theos for several years, said reporting that his business is up for sale would be incorrect and he angrily declined further comment. But the establishment, located in a building about a century old between South Main Street and Peddie Lake, has been listed in at least three newspapers. A photo of it, describing Theo’s only as a Central Jersey restaurant and bar, has appeared in U.S.1, the business and entertainment weekly serving the Princeton area.
   A source with knowledge of the sale told the Herald that Theos is being offered for slightly less than $2 million.
   The Hightstown Diner has not been listed, but Kathy Antonellos, whose family owned it for four generations, confirmed that it is for sale. She declined to provide further details.
   The diner was sold by the family in September 2003. In November 2004 a kitchen fire forced evacuation of about 20 customers and five employees. A month later, the Antonellos family reacquired it.
   The diner on Mercer Street is located just a few hundred feet from Genovese’s, which opened just a year ago on Mercer Street. The listed price last week for Genovese’s, not including the building, is $695,000. One of the owners, Vic Veltre, declined to comment.
   The most expensive price tag on a local business is $2.4 million for Michael’s Plaza, a strip mall on Mercer Street containing about a half-dozen stores.
   "If you can buy something for $700,000 or $800,000 and can sell it for $2 million, wouldn’t you do it?" asked Mr. Bond, who said some of the high prices indicate that the owners are simply trying to find out what they might be able to get.
   "You put a high price on something … people will think it’s worth that," he said.
   Michael’s Plaza was the recent subject of a contentious Planning Board meeting at which time the board gave conditional approval of a site plan for major improvements there along with its OK to four variances. The property owner, Glen Fishman of Dornoch Management, of Lakewood, objected to having to post performance bond money for traffic improvements.
   Mr. Dornoch could not be reached for comment but board attorney Gary Rosensweig said he doesn’t believe that bone of contention has anything to do with listing of the property. He said Mr. Fishman can essentially sell the board’s approval to any new owner, who would then be bound by the same board requirements.
   Also for sale is Orquideas Bakery on Main Street, listed last week at $250,000.
   Although the business is not for sale, the owner of Step Back in Time, an antiques shop on Franklin Street, has his building up for sale for $465,000 and is moving his store to Red Bank.
   "There’s just much more foot traffic in Red Bank," Nick Chaffer said. "I’ve been here 7½ years, and the amount of business I’m doing just does not warrant the investment I’ve made."
   Mr. Van Hise, like Mr. Bond, said he doesn’t necessarily see the potential sales as appropriate fodder for a newspaper story.
   "I don’t see anything going on here that’s out of the ordinary," he said. "There are people who build up a business and move on, and there are people who take a business that’s underperforming and try to sell it."