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Why One Retailer Left Southampton Center

It wasn’t the price per square foot, it was the size of the space.

When Stan Houston from the Southampton Shopping Center to downtown Benicia, it wasn’t because he was paying too much per square foot at his Southampton store.

“I told Weingarten I wasn’t complaining about the rate,” said Houston.  “I just wanted a smaller space and they wouldn’t let me do that and keep the rate the same.”

The result is that Houston moved ABC Music downtown where he has a better relationship with his landlord.  “I have a landlord who is willing to work with me,” said Houston.  “Their concern is that I’m making enough money so there’s this genuine partnership in terms of profitability.  Everyone has to make money.”

Houston explained that many tenants at Southampton Shopping Center have what he calls a standard lease.  “There is a base rate, the triple net charges –lighting and landscaping fees, building maintenance and taxes-  and then on top of that they send you a form every month where you tell them your sales and they take a percentage of your gross sales,” said Houston.

“When the economy goes down, the business is still liable for a healthy amount of rent,: said Houston.  “When the economy goes up they go ahead and get an override on your profits so it’s almost a lose-lose for some tenants.

In Houston’s case, he didn’t have a lease that required him to pay the percentage of gross sales but when he indicated he wanted to move to a smaller space in the shopping center, Weingarten told him he would have to pay a significantly higher rate per square foot.

That’s when he made the decision to move to First Street.

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If there’s something in this article you think should be corrected, or if something else is amiss, call editor JB Davis at 707-628-0051 or email him at benicia@patch.com.

Kenny August 23, 2012 at 03:52 PM
This is sounding more and more like the Sopranos.
Joe Feltcher August 23, 2012 at 04:13 PM
Is it common practice for a commercial landlord to look at your books and charge you for a cut of the profits? I've never heard that one before. Seems ridiculous.
Harry Spider II August 23, 2012 at 06:18 PM
"... they send you a form every month where you tell them your sales and they take a percentage of your gross sales,” A percent of GROSS sales? That appears to be completely bogus; that isn't a cut of PROFITS, that's a cut of ALL sales... conceivably, a business could sell their inventory at cost, generating no profits, but still have to pay a percentage to Weingarten. That just doesn't seem fair, to this untrained eye...
Joe Feltcher August 23, 2012 at 06:32 PM
THank God my mortgage doesn't work this way.
Steve Alvord August 23, 2012 at 09:35 PM
These People don't give a rat's behind about us and their shopping center.If the ,greed can't produce profitability, well we'll just sell the Center and move our money somewhere else.
Scott Burford August 23, 2012 at 10:16 PM
Good point, that's exactly what they're trying to do (produce profitability). Their plan is probably to try and attract as many "fools" as possible (my definition of a fool in this case is someone who signs one of the leases with a 'percentage of gross' clause) -- and if they can, they will make a lot of money in the short term. Then, when the economy (if ever) rebounds and the value of the center peaks, they sell it for even more profit. I've seen a lot of criticism about Weingarten and lots of it is deserved, but what we're seeing here are capitalists at work. The contracts are legal, businesses appear to keep signing them, so as long as that happens, this will continue. If they run everyone out of the center, they can still sell it and probably still come out ahead. Sounds like a no-lose situation for the owners, so why not try to maximize their revenue? In a business like theirs, customer loyalty and all of the touchy-feely-Benica wonderfulness mean absolutely nothing to them. Mayor Patterson's letter probably never made it out of the envelope.
Steve Alvord August 23, 2012 at 11:14 PM
Great reply Scott. Steve
Robert Livesay August 24, 2012 at 12:11 AM
they got the letter.
Robert Livesay August 24, 2012 at 12:13 AM
There will be another meeting very soon.
Joe Feltcher August 24, 2012 at 02:31 AM
Who cares if they got the letter or not. There is absolutely nothing the City can do about this. It's a business on private property. Nothing illegal is going on there (haven't been to the massage parlor yet). Nothing will change.
Amanda Pangelina August 24, 2012 at 05:12 PM
"they send you a form every month where you tell them your sales and they take a percentage of your gross sales" ?!?!? Insane.

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