August 12, 2010

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Business leaders advance merger of 3 local groups

It had to catch up with them some time. How long can a single mile-stretch of Germantown Avenue’s business district endure consistent loss of businesses and customers before realizing something has to give?

Last week a group of business owners and community members met to discuss merging the three standing business organizations in Chestnut Hill, the Business Association, Business Improvement District and Parking Foundation.

The idea is to combine efforts, eliminate redundancies and join forces to hire a single top executive to run the show. The goals are simple: less empty stores, more foot traffic and increased revenues.

“I don’t think the status quo is going to take us to a good place,” said Paul Greer, owner of Fabric on the Hill and vice-president of the business association.

Greer arranged for the meeting to give everyone a chance to “poke” at the idea.

“I like to poke at (an idea), try to kill it, and if it withstands that process, I figure you’ve got a pretty good idea.”

The basic concept calls for the creation of an additional board composed of an equal number of representatives from each organization to oversee the function of a newly minted CEO. Participation in the new structure would be voluntary and voted on by each organization’s board on an annual basis.

Greg Welsh, owner of the Chestnut Hill Grill and president of the business association, said the idea stems from needing to do better as individual businesses as well as a community.

“We need to think more like a mall,” he said. “We need to look at ourselves as though we are one community as a group.”

Along those lines Welsh sees the creation of a CEO for the Avenue as a way to create more uniformity in business practices and increasing the Avenue’s overall leverage.

“It’s the idea of economy of scale,” he said.

For example, Welsh’s Grill gets a better rate on credit card transactions than the lower revenue producing Carman’s Shoe Repair.

“The CEO could approach the credit card companies and negotiate a better rate because they would represent all 130 businesses in the association. They’re not just getting my business along with Carman’s but all of our business and that is an incentive to give everyone a better deal,” he said.

Greer said having an executive in charge could also give the Avenue greater political clout.

“Grants abound in Philadelphia, and for the size of the business community here, we don’t get our share of the grants. In fact we get woefully little,” he said.

The meeting was overall positive with no “wholesale” push back, according to Greer. There were some concerns about investing too much power in too few people in a community with so many individual investors (as opposed to a mall with a single owner) and even more concerns about the sharing of what are already declining revenues.

In recent years the business association with its annual budget of approximately $450,000, which accounts for more than half of the total revenue for all three organizations, has seen fewer members due to the closing of many businesses, a vast majority of which have not been replaced. The parking foundation, which nets approximately $120,000, has suffered from a lack of participation in its program and the loss of several lots. The BID with its dedicated revenue source has remained stable but only draws $180,000 from the assessment-based fees.

It may seem like a lot of money for a fairly healthy business corridor, but with each organization operating independently none has the clout or budget to accomplish more, and in this economy business owners are finding that standing still is akin to sinking slowly.

“Individually there is little we can do,” Welsh said. “I’ve been here 14 years, and trying to get everyone on the same page is like herding stray cats.”

What the proponents of this merger believe is that with a CEO at the helm, someone who has a vision for where the Avenue should be in five years, there is better likelihood of getting somewhere.

“If we just do more of the same, rearrange the deck chairs, we are not going to get where we need to be,” Greer said.

The business association member’s have requested more specific information about the goals of the merger and the financial forecast. Welsh said he hopes to have a vote on moving forward at the next business association meeting in a few weeks. If all goes as expected, Welsh said the next step would be to determine the structure of the new board.


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