Princeton businesses resilient during downturn

In contrast to the widespread decline of small business in other regions of New Jersey, however, “Princeton has been pretty consistent in its small business growth,” said Peter Crowley, CEO and president of the Princeton Regional Chamber of Commerce.

The township’s many locally owned boutiques and shops continue to be popular with the community and the University’s staff, faculty, and students.

Palmer Square Management LLC has leased spaces to businesses in Palmer Square for the past 15 years and is operating near full capacity. Anita Fresolone, the group’s marketing director, said she has not observed a decline in the number of small businesses housed in Palmer Square and noted that two small women’s clothing stores and an independent cheese shop will soon be moving in.

“When it comes to leasing, we don’t want to be just like the mall,” Fresolone said, explaining that the group puts much thought into which types of businesses it leases spaces to.

“The older part of the square has the small retail units, which can’t accommodate the national retail stores,” Terry Jaeber, also of Palmer Square Management LLC added. She explained that Palmer Square’s organization necessitates that small businesses be included and that she has seen an increase in the number of small, independent office tenants in recent years.

“If you work hard you’ll be a success,” Jaeber said regarding small-business owners.

Others believe that hard work alone cannot improve the growth of small business in Princeton.

“The challenge is the expense of operating here,” said Andrew Mangone, co-owner and manager of Hinkson’s, an office supply store. With the high cost of state and local taxes, smaller businesses must “turn a decent number just to survive,” Mangone added.

High rent costs also pose a problem to independent business. Hinkson’s recently moved from its 3,300 square foot store on Nassau Street to a 1,100 square foot space on Spring Street because paying the rent became too difficult.

“We just couldn’t do it,” Mangone said.

Gabrielle Carbone, co-owner of The Bent Spoon, a popular ice cream store, also cited Princeton’s rents as a hurdle for small businesses.

“Rents are very high,” she said, adding that every year they “go up and up and up.”

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Small business owners also noted that the cost of employee health care can significantly contribute to a small business’ fight for survival.

Hinkson’s inability to pay the rent for their larger space, as well as the business’ efforts to scale down their workforce, stemmed largely from its expenditures on employee medical insurance plans.

Mangone explained that the minimum insurance a business must pay for each employee family’s insurance is about $1,200 and that this cost can become burdensome when a small business must support the families of multiple employees. Larger businesses, he added, have a great advantage in this respect because they are able to buy health care plans at the group rate, resulting in lower health care costs for each employee.

Mitch Forest, owner of Forest Jewelers, a small 28-year-old jewelry shop on Nassau Street that employs around eight people, identified another obstacle to small business in Princeton.

“Consistently the difficulty of doing business in Princeton has been [getting] the governing body of Princeton to understand they need to be encouraging and enabling,” he said. He added that “what they don’t seem to grasp is that we pay taxes as businesses in the community, the same as residents do, and we don’t get the same kind of services as residents do.”

Forest used last week’s snowstorm as an example of the disparity between the services provided to businesses and residents. Though the Princeton Borough plows many residential streets in Princeton, it does not plow Nassau Street because it is a state road. His store remained closed for several days that week because the volume of the snow made parking and meter access extremely difficult.

Carbone agreed that local circumstances such as the cost and availability of parking can have an impact on the income of a small business. Speaking from the consumer’s point of view, she noted that “if you don’t pay [for parking], you don’t want to park in Princeton ... and you don’t want to shop in Princeton.”

She explained that action by the Borough on the parking issue would help and that small business owners of the town must consider the question of what businesses can do to make Princeton a place where people want to shop.

Like all businesses, small businesses were affected by the economic recession.

Carbone explained that “the effects of the economy hit every sector,” and added that small businesses have suffered as a result of the recent economic downturn. Beginning in 2007, “if you were a small business, you were hurt because your customers weren’t going out as much,” Carbone said.

Crowley, who agrees with the Small Business and Entrepreneurship Council’s assessment of New Jersey’s business climate, said he believes that the large shopping complexes on Route 1 have drawn some business away from small shops in Princeton. He noted that they have an advantage because they are better able to weather economic hardship as a result of their larger amounts of capital.

In addition to nearby malls, the emergence of chain stores in Princeton has also been a cause for concern for small businesses. Mangone explained that he has seen many family-owned businesses, such as restaurants, shut down in the past because of competition from new national chains.

Princeton students are well-acquainted with the convenience of chain stores.

“I bring most of my stuff from home, so I buy it from chain stores ... because it’s cheaper for me,” Yuan Chen ’13 said, adding that he does not buy much from local small businesses “unless it’s an emergency.”

Daniel Wu ’13, who is from Beijing, China, explained that if there is a small retail store near his home, he wants to support them, but chain stores usually offer the same products.

“I really like independent restaurants,” Mike Showak ’13 said. However he noted that “for basic sodas and things, I usually go to chains.”

In the end, however, Crowley said that the largest challenge comes from the Internet.

To compete with web-based retailers, “small businesses have to figure out how to more effectively use the Internet,” Crowley explained, adding that shoppers must realize that “shopping in a downtown and local environment can be very convenient.”

Staff Writer Sohee Kim contributed reporting.