Tuesday, April 20, 2010

My Life With Comic Books: Part # 82

Cast of Characters:
Paul: age 37
Mal: my wife
Brian: a customer, friend, and artist


While my friend Brian and I were working on creating a new project of a set of trading cards, I was contacted by a real estate agent who was trying to get me to buy a piece of commercial property so I could expand my comic book and collectible store in Worcester, Massachusetts. Real estate prices had fallen a little bit during the recession of the early 1990’s but the asking prices of commercial property still seemed too high to me. The realtor took me to a building that was quite interesting. It was an old three-story brick building that was used as a manufacturing facility. Each floor had about 2000 square feet of floor space. The first floor was already set up as a potential retail area and it was in nice condition. The upper two floors were unusable for retail without a lot of renovation because they had very old, oil soaked, beat-up floors. I was intrigued with this building though, because there was a nice parking lot, a loading dock, an elevator, and a nice office already constructed on the second floor. Almost all of the windows (and there were over seventy windows!) would need to be replaced. This would cost thousands of dollars so I considered this to be a big “negative.” There were some great “positives” though. This building was located on the very same major road as my current store but it was in a great area that would be much safer for my customers. The store I was using at that time was in a tough section of the city and I was eager to move out of there. This building was also located directly across the street from a very prosperous bookstore called “The Tatnuck Bookseller” and I knew they’d attract some of the same type of customers to the area that may be exposed to my store for the first time.

The owner of this building was asking $350,000 for it and I offered them $275,000. I thought that this would be a fair offer because of the amount of expensive renovations that would have to be done to make this building usable for me. Thankfully, they declined my offer.

The real estate agent called me a week or so later to tell me about another building. This one, a brick building built in the 1940’s and used as a car dealership for most of its history, was located on Park Avenue, the third busiest street in Worcester. It had almost 20,000 square feet of space including a small second level. The first level was divided exactly in half by a cement-block wall to create two almost identical commercial spaces. A small parking area would hold nearly ten cars. My current store had on-street parking for two cars so this new location would be a small improvement.

The building was being used as a “light manufacturing” facility for disabled people to assemble things for outside companies and state projects. This privately owned business was very successful until the governor of Massachusetts cut the funding for many state-sponsored programs in order to fix the huge deficit left by the former governor, Michael Dukakis. At one time, an interested buyer had approached the owner of this building, and offered $750,000 for the building. The owner didn’t want to sell it at the time because they were making a good profit using the building. They certainly didn’t foresee the huge state cuts coming. Once it did happen, the owners went back and offered the building to the potential buyer but he had already bought another property. They decided to put it on the market for $700,000. This property had been on the market for a couple of months by the time my real estate agent told me about it and they had only received one very low offer.

I was excited by the possibilities of this large space but I thought I’d never be able to fill it all up with merchandise. I was currently using about 2000 square feet for retail space and I did need more, but this was huge! I wanted this building but since I wasn’t in a desperate position I made a pretty low offer of $200,000. To my surprise, the seller accepted it.

I didn’t have much cash in the bank at that time so I needed to get a mortgage to purchase this property. I was still making monthly payments on the apartment building next to my store in Worcester and most banks were reluctant to loan me more money because I was now losing money each month on it. Although all of the apartments were rented, the commercial restaurant was still way behind on their rent and I wasn’t collecting enough to pay the mortgage and taxes each month. I finally found a bank that was willing to loan me the money to purchase this building but because it was a commercial loan, it would take almost six weeks for them to do a commercial appraisal of the property.

I met with the manager of the bank in my hometown and she suggested that I could refinance my home to get the cash needed to buy this building. My home was valued at about $350,000 and I had paid off the loan many years earlier so the bank was willing to give me a loan against the value of it. They gave me the money within a week and I hired a civil engineer to inspect the building before I bought it. He found some minor problems but I bought it anyway.

I hired my buddy, Jim Stoll, to quickly demolish many of the office partitions on the first floor of my new building. Jim, along with his wife Patty, worked long hours over a few weeks to clean this building out and they built a large, raised platform so we would be able to see the entire store from one spot. It was my intention to open in this new location in early 1992

Next chapter: The crazy, big move.

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