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Friday, Mar 29, 2024

MONTROSE—Dot-Com Leaves Montrose After Neighbors Complain

Bigger isn’t necessarily better when it comes to doing business in Montrose. And while there may be a perfectly utopianesque explanation for it, don’t try to explain it to Joe McClure, co-owner of Air4Less.com. McClure, also co-owner of Montrose Travel a fixture on quaint Honolulu Avenue in northern Glendale since 1956 recently moved the dot-com out of state following a contentious battle with local merchants and the Glendale City Council. Montrose business owners and city officials complained that Air4Less.com was growing too big, too fast for Montrose, threatening to alter their vision of what the shopping district should look like. “The issue was that we were single-handedly going to change the face and the character of the last little Mayberry left in Los Angeles County,” said McClure. “So (Glendale Mayor Dave Weaver) and the Montrose Shopping Association got on the bandwagon to do their best and move us out of town.” McClure established the brick-and-mortar version of the company, Air For Less, in 1995 and ran it from inside Montrose Travel headquarters before taking it on line and changing the name. By late 1999 it was clear the company was outgrowing the location, so McClure paid $1.2 million for a 14,000-square-foot building, also on Honolulu, that served as the former home of clothing retailer Fay’s of Montrose. With little or no fanfare, McClure obtained the necessary use and occupancy permits. But when he announced plans to hire an additional 150 employees to accommodate growth, the mood in Montrose turned ugly. According to Weaver, both local merchants and city officials grew concerned that 150 more people in town each day would suck up public parking spaces, already in short supply. He added that merchants and residents “don’t want to walk by storefronts and see people working on computers.” “All of those 150 people, I believe, would have been using public parking, which just isn’t there,” said Weaver. “Montrose is a walking area, people walk from one store to the next. So when you pass the windows (of Air4Less) you’re just going to see a bunch of people on computers, and the more (businesses) you put in like it, it’s just going to destroy the feeling of the community.” Lindsay Ostrom, owner of The Paper Rabbit, a scrapbook accessory and gift shop on Honolulu, said she and fellow merchants have worked hard to maintain Montrose’s small-town feel and agrees Air4Less.com threatened to alter that image. “That’s what’s built my business here for 20 years,” she said. “Who knows, all those people may have been shopping in our stores, but it’s always been our opinion that this area should be mostly mom-and-pop shops.” In June of 2000, just 72 hours after McClure received the use permits he needed for the new building, the Glendale City Council passed an ordinance that essentially prohibits what the city calls “high intensity” business on the ground floor of any building in Montrose. The ordinance says a business cannot have more than one employee per 300 square feet, and it must have a retail component. “What happened with Montrose Travel is that they have been a very successful travel agency, no question about it,” said Jim Glaser, assistant director of planning for Glendale. “But the question that was brought to the city’s attention was whether there was going to be high-intensity office use involved.” Glaser said, because McClure purchased the building before the ordinance went into effect, Air4Less.com is actually exempt from the new restrictions. But the headaches, said McClure, were just too much to bear. He said he wracked up $20,000 in legal fees during nearly six months of negotiations over the expansion plans with city council members and local merchants before deciding he’d finally had enough. In January, McClure completed a merger with Phoenix-based A Better Air Fare, an off-line travel business. He hired about 170 people and moved Air4less.com to offices in Phoenix and Newport News, Va., where A Better Air Fair’s call centers were already up and running. The company now has roughly 375 employees. “The way we look at it is we needed to be a long-term, viable business, and we needed to do it fast and we needed to add about 150 more people,” said McClure. “But I was just tired of the fights with Dave Weaver and the merchants. (The city) would have made us jump through hoop after hoop after hoop, so we had the opportunity to move it and move it profitably and make a lot more money.” The merger, said McClure, represents roughly $150 million in gross sales. Meanwhile, the 14,000-square-foot building in the heart of the Montrose shopping district sits vacant. And, although A Better Air Fare agreed in merger negotiations to cover the rent on the building for the next two years, McClure said it’s a shame nonetheless to see it empty. He is currently talking with two possible tenants. “We bought a building in a beautiful town and we got all the required permits and they gave us nothing but headaches and grief,” McClure said. McClure declined to say who his potential tenants are, but added that one was retail and one was not. But at $14,000 a month for rent (retail space in Montrose goes for about $1 a foot, according to McClure) and the ordinance restrictions that would apply, there are likely to be many roadblocks along the way retailer or not. In addition, the town’s “Mayberry” mentality could actually be affecting business, according to McClure. With a softening economy clearly on the horizon, Montrose merchants could be headed for tough times if there is no strong “anchor” tenant to bring in substantial foot traffic outside of the traditional holiday shopping season. “More and more businesses are already moving out of Montrose because they can’t make enough money,” said McClure. “In the world of retailers, I think 70 to 75 percent of their entire business is Christmas time and there just isn’t enough business the rest of the year.” Because she also happens to be a tenant of McClure’s (he owns four buildings in town) and because she was instrumental in getting the ordinance passed, Montrose Shopping Park Association President Myrna Grijalva, owner of Joselito’s Mexican Restaurant, declined to comment on how businesses were doing there, or her role in pushing for the ordinance. Philip Lanzafame, Glendale’s assistant director of development services, said the city does not track how many businesses in Montrose have come and gone over the last few years. He said a few had closed up shop in the last year or so, but not enough to indicate a growing trend. Regardless, said McClure, a strong anchor tenant would bring more people through town, ultimately affecting everyone’s bottom line. And if the two possibilities he’s negotiating with now don’t pan out, he’s got another potential tenant on the back burner: Montrose Travel. McClure said Montrose Travel is likely to outgrow its current location in about six months. And, he is considering buying one of the three competing travel agencies in town AMT Travel Centers, Village Travel and Archer Travel which could mean hiring an additional 100 people.

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