CITY LIMITS: Will others turn to chapter 11?

It is 4 a.m., you are slightly intoxicated, and very hungry. Suddenly, you find yourself satiating your hunger with something called an eggel and fries smothered in gravy. The year could be 1971, 1983, or 1991. It's just another night at Troy's, a long-time University favorite. But Troy's filed for Chapter 11 bankruptcy protection last month, and may become the latest casualty of the West Philadelphia economy. Over the past year, the Athletic Department clothing store and Barley and Hops restaurant have gone out of business. Area business owners say major problems include high rent from their landlord -- who is often the University, the slow summer period, high taxes and poor parking. But while area businesses continue to struggle and sometimes fail, entrepreneurs are still attracted to the University market. In the past year, the area has seen the addition of two new restaurants and a bicycle store. · The most glaring difficulty in starting a business in West Philadelphia is surviving the summer when their customer base -- students -- is gone. "During the summer, it is a trial period," said Douglas Rhee, owner of Bonded Cleaners on the 3700 block of Spruce Street. "[There is a] drastic change when school's out." Sunny Jachar, manager of Mega-Video on the 3900 block of Walnut Street, said that the summer "kills business." Business booms all year, and then for four months business is "dead," Jachar said. Smokey Joe's Tavern Owner Paul Ryan, a longtime area businessperson, said that since his "business depends mostly on students," he is basically operating "nine months a year." Smoke's business is also threatened by the state Liquor Control Board's recent decision not to renew the bar's liquor license. The current license will expire at the end of the month. High overhead costs, especially high rent, can sink many stores before they can really get established. And since the University owns much of the retail space bordering the campus, most businesspeople blame the University for the high rent costs. Dave Kaplan, owner of the six-month-old Bicycle Express on 40th Street, said last month that his rent is "fairly high." Yet Bicycle Express is one of the few success stories in the area. John Kollias, owner of Troy's, said that the University is charging its tenants too much which in turn, forces rents in the area up even higher. "The University has monopolized most of the land," Kollias said. "They have a mini-monopoly around here -- rents don't reflect their true value." But David Thornburgh, director of the Wharton Small Business Development Center, said that any higher overhead costs are offset by the "real advantages" of being close to the University. The University's Real Estate office was unavailable for comment. Parking, a problem that any visitor to the University encounters, is also a problem for businesses. Loren Gallup, owner of Friendly Flowers on Walnut Street, said that her delivery people are constantly getting parking tickets. In addition, Gallup said she has no place to park on a permanent basis. She said she hopes the University would give some spots in the new parking complex to be built at the corner of 40th and Walnut Streets. Kollias said Troy's also has parking woes since Chestnut Street is "too crowded." In addition, he said metered parking has hurt his business. "Meter maids have wiped out businesses around the city," Kollias said. Despite many problems, it is "business as usual" for some, and new businesses are still opening. Bonded Cleaners' Rhee said that to stay in business, a store owner must "know exactly what the students' needs, wants, and interests [are]." Thornburgh said that because of the recession and other economic obstacles, a business must focus on what group they are trying to target. "It is no secret that the last year or so we've been in the midst of a recession. Those businesses that are not targetting a particular niche are being most affected," Thornburgh said. Following this advice and consequently "doing phenomenonally well," is Bicycle Express which opened this past April. Kaplan said that he was starting to see many University students in his other two stores in Northeast Philadelphia so he decided to open a store on campus. He said that the demand for bicycles and his commitment to customer service have made business brisk. But as other business owners have learned, there is a harsh reality to operating in West Philadelphia. "The truth of the matter is that anyone trying to start up in this area would probably be wasting a lot of money," Kollias said.

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