Our View: More must be done to stop small business flight

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Our View: More must be done to stop small business flight
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(Photo/Chris Teale)

It is distressing to see so many iconic Alexandria small businesses closing shop all at once. First it was Mancini’s, then Monroe’s, Bradlee Shoe Repair, Hannelore’s of Olde Town, Decorium and Why Not? all followed suit. Like the spate of celebrity deaths since the New Year, it begs the question: “Who or what is next?”

Each business owner had their own reason for shutting down — retirement, difficulty competing against the Internet, rising rents, etc. — but they all had the common refrain of closing rather than selling their establishments. The loss to Alexandria is both personal and also part of an upsetting longer-term trend.

People take comfort in what is familiar, including frequenting the same establishments over time. Each of the six businesses listed above had functioned in Alexandria for many years — Decorium, which opened 15 years ago, was the newcomer of the bunch, while Why Not? clothed several generations of Alexandria children in its 50 years of operation. Collectively, their closings are a huge loss for the city.

The bigger trend is also disturbing. According to the Business Tax Reform Task Force report that was issued in early 2014, the downturn in Alexandria’s private sector performance predates the recession that began in December 2007 and exceeds that of neighboring Arlington. For instance, private sector wages in Alexandria between 2007 and 2012 fell 7 percent, compared to a 1 percent drop regionally and a 7 percent increase in Arlington County.

More recently, gross sales receipts in Old Town decreased from fiscal years 2013 to 2014 — several years into the economic recovery — by 5.5 percent, even though the number of businesses stayed the same, according to data provided to the Old Town Area Parking Study work group. That data, coupled with the increasing disparity in Alexandria between residential property tax receipts and business tax receipts — the current split is about 70 percent residential property to 30 percent business tax revenues — paints a less than rosy economic picture for our city.

Happily, the news is not all bad for Alexandria businesses. There are terrific resources in the city available to help city businesses, and we think there are additional, concrete steps the city can take.

Alexandria has a wonderful resource for local businesses in the Small Business Development Center, which helps with everything from finding a location to guiding entrepreneurs in assembling financial documents. There’s a city marketing fund, which provides grants to small businesses, and a well-run “Extraordinary Alexandria” marketing campaign by Visit Alexandria that helps lure tourists to the Port City.

But these resources aren’t enough, and they’re not being optimally publicized. We think the SBDC needs to be better marketed within the city to existing businesses, and also outside the city as a tool to recruit companies to relocate to Alexandria.

In addition, we think the Business Tax Reform Task Force report needs to be pulled out, dusted off and implemented. While it may seem counterintuitive to some given that Alexandria needs to increase business tax revenue, we agree with the report’s key recommendation — that the city’s rates for business gross receipt taxes, commonly called BPOL — need to be lowered below that of neighboring Arlington in order to better compete.

Alexandrians have been focused too exclusively in recent years on waterfront redevelopment and attempts to attract government agencies like the National Science Foundation and the U.S. Transportation Security Administration. What is needed is an approach that helps all city businesses, large and small, new and old, operate with fewer encumbrances and a lower tax rate.

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