NORTHERN CALIFORNIA INDEPENDENT BOOKSELLERS ASSOCIATION

HOLT UNCENSORED #38
by Pat Holt

Friday, February 19, 1998

GLITCH CITY APOLOGY
THE TIDE, SHE IS TURNING: CAPITOLA VS. BORDERS
LOVEBIRDS UNTIL THE (CASH) COW COMES HOME: IMUS & B&N
EARNING THE TRUST: "WISDOM CIRCLES"
LETTER

GLITCH CITY APOLOGY

The theme for this week's column was going to be "customer trust," but then the list-service provider of Holt Uncensored developed a cybercanker sore and missed distributing #37 on 2/12. Perhaps some subscribers are still receiving that one (which somehow got mislabeled 2/19). With the Tuesday column now rewritten and coming to you Friday 2/19 and Remainders of the Day cancelled for this week, the question of customer trust hit home. Please accept our apology for the confusion: There's nothing more important than reliability on the Internet, we always say here at Holt Uncensored, and one day we hope to prove it to you.

THE TIDE, SHE IS TURNING: CAPITOLA VS. BORDERS

How much do readers know or care about "the bookstore wars" and how personally do they take the plight of independent booksellers?

A whopper of an answer emerged during two stirring and suspenseful public hearings in Capitola, California, in which customers voiced their concern about the loss of independent bookstores if approval is granted to a new 25,000-square-foot Borders store.

Working into the wee hours of early yesterday morning (1:15 a.m.), the City Council of Capitola heard testimony from many dozens of speakers who revealed a surprisingly sophisticated knowledge of everything from Shared Parking Methodology to ancillary-vs.-freestanding cafes, loss of riparian vegetation, monopoly business practices, "impacted" traffic patterns and of course the effect of "big-box bookstores" on independent booksellers, on the publishing industry and on the reading choices of consumers.

At issue was a proposed shopping development near Highway One on a densely populated street leading to the charming downtown of Capitola-by-the-Sea, which was promptly renamed San-Jose-by-the-Sea or Milpitas-by-the-Sea or Generica-by-the-Sea by those opposed to chain stores in general and "megabookstores" such as Borders in particular.

Hundreds of people attending the packed City Council meetings (and earlier Planning Commission hearings) were almost universally against the Borders store. Mentioned frequently were the independent bookstores that have made the Capitola-Santa Cruz area legendary, ranging from the famous Capitola Book Cafe and Bookshop Santa Cruz to niche stores such as Kaleidoscope Teachers Store, Seeds of Change Children's Store, Mockingbird, Bookworks of Aptos and at least 15 other bookstores in a surrounding area of only about 100,000 people (Capitola's population is about 10,000).

"It’s heartbreaking," said one speaker, "when Borders or Barnes & Noble comes into a community where there are pre-existing community stores, and pretty soon those stores begin to fold. [Borders' representatives] say they have our community’s interest at heart, but if so, why don’t we hear them say, ‘We are newcomers here. We want to be good neighbors. We want everybody to survive. There ought to be a way for all of us to share what’s here for those of you who have worked to develop and nurture this book market.' But you don’t hear anybody say that. … If the existence of these chain stores requires the systematic sacrifice of our network of independent bookstores, it’s just too great a price to pay."

The diversity of speakers in itself was dramatic. A brain surgeon likened the "rampant growth" of megastores like Borders to "a tumor, with more and more cells growing" until all "we're not going to have any more Amy Tans or Barbara Kingsolvers - authors who would never make it if these types of corporate bookstores determine what gets published in this society."

A former soldier said he spent 10 years "in various third-world toilet bowls you never heard of fighting American money wars. . . . Supposedly we were going to defend things like democracy, and constituency, and community and neighborhoods . . . . I can't help but think that's what I'm trying to defend now. No one wants to see [Borders] happen. Ladies and gentlemen, this is your tax base . . . begging you not to let this happen."

The depth of concern and the committment of so many to investigate the matter individually was astonishing. One woman walked up to the podium with her husband and dumped a big bag of garbage in front of shocked Council members. "We'll clean this up, but Borders won't," she said, having collected the garbage from the parking lot of the nearest Borders store in Sand City, about 10 miles away. Another woman used her own tape measure to check square feet in the proposed development and discovered flaws in the original reports.

An independent traffic consultant counted cars and interviewed groups of customers going into the Sand City Borders. He reported that parking needs for the new Borders had been grossly underestimated (a dozen of others agreed, many with their own reports). The audience gasped when it was revealed the city's traffic engineer had used traffic studies that were15 years old, published "long before megabox bookstores like Borders were around." A master's degree candidate explained that none of the books required by her classes could be found at any Borders stores in adjacent areas - but all had been stocked by stores in the Capitola-Santa Cruz area.

One expects a love fest in a small town like this, and these residents did not disappoint. At the same time it was amazing to witness the depth of their research, the eloquence and passion of their remarks, the respect they brought to this forum and the lanugage they used in it.

"I am here tonight simply because of my deep affection for Capitola," said one person. "[But] I fear there is no end to the takeover of the corporate commercial landscape . . . When monopolistic business practices move into town, we lose jobs. When a corporate entity sets up shop in our former neighborhood commercial area, the money that leaves our pockets is not reinvested in the community; it goes back to fill the coffers at the corporate headquarters."

"Borders is not the innocent venture it appears," said one speaker. "It has been documented that these megabook chains . . . are determining what is to be printed and available," said another. "I believe it is a form of censorship when they tell authors what to write . . . Please, let's not cheat ourselves . . . by making this decision in favor of a Big Brother in our lives."

"Borders will always come with false promises," said another. " 'Oh, we have 200,000 titles,' they say, but after a few months, the inventory shrinks. 'Oh, we gear one-quarter, or one-third, or one-half the books to regional interests.' That is not true - this is a chain store that makes its money from a formula order in Ann Arbor, Michigan. Local managers are given very little leeway. 'Oh, we give money to local charities,' they say. Well, a few thousand dollars per store maybe, but that's far less than contributions made even by Seeds of Change children's store across the street."

"The site is inadequate." "The traffic lanes are unsafe." "There's only one ingress and egress for the parking garage." "Loading docks are a hazard." "Trucks have to back up across the main pedestrian walkway.'' Complaints flew across the hall all night. Surprisingly, only one Borders representative had planned to attend but pleaded a family emergency and sent a letter instea

d.

Most of all, the sheer size of this 25,000-square-foot Borders seemed to outrage all in attendance. For this small seaside village, a Titanic-sized bookstore was certain to dominate the site and, when celebrity authors appeared, the store would, many believed, fill up the parking area so fast that cars would back right out into the street and up the exit lanes of the freeway, turning Highway One into a gigantic parking lot.

Such arguments took the heat off the colossal dilemma facing City Council members: Certainly Capitola was as larded with chain megastores as any other, and with other bookstores. How could a government body, however sympathetic to the emotions of book-loving citizens, deny free enterprise by denying yet another chain, and this one a bookstore, no less? Wouldn't the Council be guilty of "stifling competition"?

Perhaps questions were valid during the post-World War II period, one speaker commented, when chain stores weren't gobbling up the competiton as fast and furious as they are now. Today, citizens look to City Councils to recognize the density of retail and traffic growth, the "malling of America" by chain stores and the domination of "megabigbox stores" like Borders - and say, finally, NO: Since existing independent bookstores already serve the community very well, and were here first, and have contributed to the character of the communty and all that makes Capitola distinctive, there simply isn't room for another huge chain store like Borders.

The City Council bought the argument, but with its own twist: Voting 3 to 2, members tentatively granted the approval to Borders but stipulated that the store could only be 12,500 square feet and that the cafe would have to be responsible for more parking spaces (previously it was considered "ancillary" to the bookstores and no parking spaces were assigned to it). Since it was announced that Borders has never built anything less than a 20-23,000-square-foot store inside the continental United States (Borders stores in Hawaii are smaller), the conclusion drawn by most people at the meeting was that Borders management would give up on the Capitola proposal and back out.

Perhaps the hero of the evening, then, was Neal Coonerty of Bookshop Santa Cruz, who spoke forcefully and magnificently against the Borders store in Capitola, knowing that the next location Borders may pursue is a 30,000-square-foot building a block away from his own store in downtown Santa Cruz.

Nothing will be decided officially in Capitola until the next City Council meeting on March 11. But if nothing changes, it appears that Borders for the second time in a few months (San Francisco was the first) has been turned down - first, because a backlash against big fat fascist chain stores of all kinds is underway; second, because customers do "get it" about "the bookstore wars" and are siding with independents; and third, because government bodies are listening to the people who elect them, embracing the idea of protecting community integrity and character, and knowing they do have the power to draw a line against corporate pressure they never thought possible before.

This night in Capitola, for all its complexities and compromises and legalese and delays, was a big one.

(An excellent article about Borders and independent bookstores in Capitola was written by John Yewell of Metro Santa Cruz - click on http://www.metcruz.com and search for issue dated January 21, 1999. Yewell is at jyewell@metcruz.com.)

LOVEBIRDS UNTIL THE (CASH) COW COMES HOME: DON IMUS AND BARNES & NOBLE

Don't you love the fact that Barnes & Nobles is supporting the new book awards dreamed up by radio talk show host Don Imus? Why, those two lovebirds couldn't be more perfect for each other if they were George and Gracie at the Palace.

With the announcement of the Imus winners this week, the cash awards alone of $200,000 seem designed to - why, to dazzle us into taking Imus and his little munchkin B&N seriously!

So let's see what we have: First, here's Barnes & Noble, the chain that wants to kill every independent bookstore on Earth, play the hero against Amazon and sell out to Bertelsmann at the same time.

Second, here's radio bad boy Imus, whose in-the-gutter tastes rival those of "shock jock" Howard Stern. And gosh, how those two like to outdo each other! As we learn from the "Super Imus Links Page" on the Internet, "Imus said that if Stern ever beat Imus in ratings, Imus would eat a dead dog's penis."

Readers can expect the same level of dignity and enlightenment from Imus when he doles out his American Book Awards. What a man of the people he is! Or perhaps we should say, what a fisherman of the people, because this stuff is bait to him.

Imus casts an idea like this into his Sea of Self-Serving Hypocrites and bingo, the biggest bite of all comes from Barnes & Noble, that great bastion of good reading, that cash-ready, value-starved, bottom-feeding Me! Me! Me! chain that seems always ready to chomp before it thinks.

And about that obscene $200,000 (one grand woulda been enough!). Is it big enough of a roll, do you think, for the pinky-ringed B&N to buy its way into social acceptance? Not with Don Imus on its arm. Who wants to mention either the nominees or winners - they're all good writers but not worth naming, simply because of the Imus award stigma.

One hopes, though, the winners will take the money and run to an independent bookstore, where knowledgeable people without need for braggadocio or false self-images can be found to suggest some great books to read.

EARNING THE TRUST: "WISDOM CIRCLES"

Let's venture out to the hills of Oakland, Calif., where Charlie Garfield and Cindy Spring have a big old rambling house they sometimes use to hold a phenomenon called "Wisdom Circles." You can read about this unique forum in the book of the same name they wrote (with psychologist Sedonia Cahill) that's just out in paperback (Hyperion; 259 pages; $12.95).

Perhaps the best way to describe the book is to start with a Wisdom Circle at the couple's home four years ago, when they invited 18 of the most experienced caregivers in the out-of-control AIDS epidemic to attend a radically different kind of meeting.

Charlie is a clinical professor in psychiatry at the University of California and the founder of Shanti Project, one of the first community-based organizations in the country to care for terminally ill people with AIDS. To say that the volunteers and caregivers he and Cindy invited to the house were "burned out" would be understatement. These people had been engulfed in wave upon wave of death, and needed to respond on a soul level.

"These were people who had essentially been in the front lines of a war for years, but with precious little opportunity to decompress. The Wisdom Circle was a chance to give them a chance to talk about what they felt was happening to them - their reactions to it and what they needed to continue."

So the 18 veterans who sat in a circle at Charlie and Cindy's house had to know from the start that they could speak with complete candor. Ritual was involved to formalize and separate the circle from the "real" world. A question was asked: "What have you never shared with anybody about your experience during the AIDS crisis that would be wonderful to tell us right now?" A "talking stick" was used so that each person holding it could speak at length without being interrupted. All the participants - so attuned to the needs of the dying, so sympathetic as listeners with clients and with family members - learned how to listen anew.

The circle, Charlie says, "becomes something akin to a compassionate community, where people don't have to worry about being contradicted or undercut. They don't have to remember that their boss is in the room, or that there might be consequences if they say something controversial. Only then can they speak from the heart, or listen from the heart."

Cindy, coordinator for Earth Day 2000 in Northern California, has brought Wisdom Circles to homeless shelters, environmental activists, women's groups and corporations. Charlie, too, has been active as an unusual consultant in business. "You'd think existing hierarchies would prohibit the egalitarianism, mutual respect and deep truth-telling that Wisdom Circles inspire," says Charlie, "and you would be right.

"I once consulted with a Fortune 100 company that was in trouble legally and ethically - it had betrayed its customers and lied to its own people. Now it wanted to launch a new initiative. I said, 'Your people are grieving. They don't trust you. Unless you can create a space where they can talk openly about what happened, you're not going to be able to launch anything.

"Of course whenever there's a bad news in a corporation, the first thought is, 'Let's move on! Water under the bridge! I hurt you, I stole everything you own, and I'm sorry - it was a bad day.' "

That's the kind of "top-down" thinking that had to change at this company, Charlie says. "Instead of coming in with 'my plan' for the workplace, the person at the top has to understand that most real change happens from the bottom up, not top down. It's the welling up from the 'lower' ranks, that makes Wisdom Circles so successful. People start saying, 'Why can't we relate this way all the time?' They want to speak to each other with the same authenticity, the same premium on truth, the same way of listening and speaking from the heart in daily life, not just in a protected environment called a Wisdom Circle."

Which brings us to this question of "customer trust," especially in bookselling. At a time when independents have been blindsided from every direction, there is hope and active resolution in the kind of loyalty and trust that comes from concerned customers.

As reported a few months ago, when GAIA Bookstore in Berkeley faced colossal losses from chain store and Amazon.com competition, Cindy conducted two Wisdom Circles with the store's founders, who learned that GAIA would have to reinvent itself as a community center-with-books rather than as a bookstore trying to act as a community center. But everyone who participated in the Wisdom Circles received a kind of gift in the meantime - the knowledge that there is a way to communicate one's deepest truths, protected by the "safe container" of the circle and sustained by a feeling of shared equality.

Can any independent bookstore - any group for that matter - abandon old hierarchies for the grace and intimacy of a Wisdom Circle? Charlie and Cindy believe so. "To have an opportunity to move beyond a very restricted notion of your identity can be an enormous relief for an individual and a gift for an organization," says Charlie, "not just because of the basic humanity of it but because of the wisdom you possess that is now allowable in the context of the circle."

LETTER

Dear Pat Holt and Harold Augenbraum,

I am a lawyer who specializes in the law of nonprofit organizations. I was intrigued by Mr. Augenbraum's suggestion in your latest newsletter to the effect that an independent bookseller could save real estate and corporate income taxes by becoming a nonprofit organization. Unfortunately, the law is in the way of what otherwise might be a great idea.

Aside from the tax bite that the owner would probably face under Internal Revenue Code Section 337 (the intricacies of which are too great for explication here), there are problems with qualifying as a nonprofit in the first place. In most states and cities, only charitable nonprofits -- organizations that can qualify under Internal Revenue Code Section 501(c)(3) -- can get any relief from property taxes.

To qualify as a charity, a bookstore would have to show, among other things, that it is organized and operated for charitable, educational, scientific, religious, or similar purposes and that no part of its income or assets benefited any insider improperly. It would need a board of directors with enough independent participants to outvote the former owner (sorry, employees don't realistically count as independent) so as to avoid conflicts of interest when it comes to compensation, contracts, etc.

The bookstore would have to be able to show the IRS, as part of its application, how it is different from a commercial bookstore of similar size -- in practice, how its operations as a nonprofit are different from its former operations as a commercial enterprise. That's certainly possible, but it won't be easy.

Finally, there's the question of ownership. A business can be owned. A charity can't be. Independent booksellers (at least the ones I know) are passionate about their stores. Giving up ownership and control often turns out to be much more difficult than people realize.

And after all that, suppose the bookstore qualifies as a charity -- and STILL doesn't make it. What then? Since it's a charity, all of its remaining assets (after debts have been paid) have to be distributed to other charities. The assets can't go back to donors, to former owners, or anywhere except other charities with similar purposes.

Having said all this, it's still possible that an independent bookstore might reconstitute itself as a nonprofit educational community center that offers programs, seminars, etc. as well as selling books. It would be an uphill battle, but I certainly wouldn't rule it out. So don't give up the idea.

Just look at it with skeptical eyes. Find a lawyer or accountant who's familiar with the laws of nonprofit organizations, brainstorm with them, and ask lots of questions -- and don't do anything irrevocable until you're sure you can live with all of the consequences.

Betsy Buchalter Adler
Silk, Adler & Colvin
San Francisco bba@silklaw.com