The Ben Franklin Crafts store in the Old Orchard Shopping Center announced last week it would be closing its doors. Ben Franklin owner Gary Hampel said an increase in rent from Webster University, the property owner, was a major component in the decision to close.
“The rent was a factor,” Hampel said. “But it wasn’t the sole factor; we’ve also suffered in this economy. We’ve had a definite decline in sales in the last two years or so, so that is also a big factor.”
Greg Gunderson, Webster University vice president and chief financial officer, said the decision to raise the rent on Ben Franklin was based on market values for the property.
“The rate being paid by Ben Franklin was about 40 percent below market value,” Gunderson said. “They are our largest tenant, so obviously that is a concern. We attempted, unsuccessfully, to renegotiate their rent.”
Gunderson said the university authorized Solon Gerschman — a commercial real estate company acting on Webster’s behalf — to conduct negotiations with Hampel. Hampel said he never met with a single representative from the university during the negotiations. According to Hampel and Gunderson, there were multiple negotiations between the parties, but no agreement was reached.
“Our records indicate they (Solon Gerschman) met with him twice and engaged in sustained negotiations,” Gunderson said. “After he declined our higher rate, we offered him a second rate which would have reduced his square footage by about half, but allowed him to keep a rate under market value. The idea being that we could then lease the other half of his space at market value.”
Ben Franklin has renegotiated its rent rate once since Webster University purchased the Old Orchard Shopping Center in 2008, Hampel said. He also said the negotiations were “amicable.”
“When we talked this time, though, it was more than I could afford,” Hampel said.
Though he wouldn’t provide precise figures, he called the increase “substantial, tens of thousands of dollars.”
The last meeting between Solon Gerschman and Ben Franklin took place Aug. 29, according to Gunderson. It was at that time the decision to close was made final, Gunderson said.
Ben Franklin had only three locations in St. Louis: Webster Groves, Tesson Ferry and Eureka. The Tesson Ferry location closed more than one year ago — mostly due to declining sales — though Hampel is not involved in that store’s management.
“This store is mine — this is the one I’ve run since I graduated college,” Hampel said. “It’ll be almost 30 years to the day, doors opening and doors closing.”
The craft store has been a staple in the community, and some residents are speaking out against the store’s closing.
“Whatever happened to giving a dedicated, hard-working man a chance and treating people fairly with compassion?” said Dave Buck, a Webster Groves resident who spoke at the past five city council meetings regarding Webster expansion. “Greg (Gunderson’s) actions suggest he only cares about the cold, almighty dollar. I hope this is not the case.”
Though some residents are concerned about the closure, Hampel emphasized that he was not angry with Webster University for renegotiating Ben Franklin’s rent.
“That’s just the nature of the beast,” Hampel said. “(Webster University) owns the property. They are in the community. Occasionally, they are going to affect it.”
No tenant has been selected for the space. Webster University will be seeking to replace Ben Franklin with a retail business, according to a statement provided by Susan Kerth, Webster University media relations specialist.
“Beginning in 2008, Webster University has invested over $5 million in the Old Orchard Shopping Center,” Kerth said. “This investment in our community reflects the value we place in improving the quality of our community.”
KSDK Channel 5 covered this story during its 10 p.m. newscast on Sept. 12. Click here for KSDK’s coverage.
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