NORTHERN CALIFORNIA INDEPENDENT BOOKSELLERS ASSOCIATION

HOLT UNCENSORED #89
by Pat Holt

Tuesday, September 7, 1999:

BORDERS' BELLIGERENCE

LETTERS
BORDERS' BELLIGERENCE

Well, they're reeling with disbelief in Santa Cruz, Calif., and who can blame them: If you want to see an example of chain bookstore belligerence, this one is a pip.

The seaside city of Santa Cruz has been retrofitting itself back together ever since California's 1989 earthquake, which erupted from a fault the size of a massive trampoline almost directly underneath, and reduced much of the downtown area to rubble. The town's main bookstore, Bookshop Santa Cruz, which had been a literary linchpin in the community for 16 years, suffered huge losses when its building crumpled like a wad of Kleenex. Refusing to close, the store found itself operating out of a tent for three years.

Publishers and other booksellers rallied to support the Bookshop, and after much hard work and personal investment by owners Neal and Candy Coonerty, the store relocated to a 14,000-square-foot building on Pacific Avenue - happily right in the center of town.

Neal is vice president of the American Booksellers Association and will become president next year. He is the former mayor of Santa Cruz who led much of the downtown recovery in the early 1990s. His voice and presence in regional politics continue to have deep and long-lasting impact on residents of the area. When his wife, Candy, died suddenly only a month ago, the community went into shock along with him.

So it was significant last February, when Borders tried to bring a 25,000-square-foot store into the nearby town of Capitola, that Neal Coonerty presented one of the most eloquent and powerful arguments against the project.

Because Borders and its developer, Redtree Properties, had to apply to the city of Capitola for a use permit, public hearings were held by the Planning Commission and City Council deep into the wee hours of many nights. Protestors packed these meetings, and the result - thanks in part to Coonerty's strong position - was a rejection of Borders' huge store. The city did offer to accept a retail outlet half that size, but Borders declined to build it.

That's when rumors began that Redtree was going to bring Borders to Santa Cruz instead and put it in a huge building under construction in the downtown area just a block away from Bookshop Santa Cruz. Although the new building was approved for multiple storefronts on Pacific Avenue, the design could easily be modified for a giant ground-floor-plus-mezzanine Borders Store.

Thus the great irony at the time: The Santa Cruz bookseller who had the most to lose if Borders didn't succeed in Capitola was Neal Coonerty, the very protester whose voice against it was the most authoritative and convincing.

Still, no one thought that Redtree Properties would bring Borders to the Santa Cruz building because Redtree's chief operating officer, John Tremoulis, had spoken against chain stores in the Santa Cruz Sentinel. "Great local retailers in the Santa Cruz area," he said, "should be downtown. "They'll make downtown stronger. I don't want to see a bunch of national chains downtown."

All right, John! people thought, because his views were right in line with Santa Cruz's Downtown Recovery Plan. Created after the 1989 earthquake, the DRP called for "strong local merchants" to restore the "unique retailing personality" of the downtown area.

This is not to say that big-box chain stores were ever kept out of Santa Cruz. Megastores thrive in a shopping center built for their use far enough away from downtown and close enough to the freeway to accommodate shoppers who want easy access to a mall environment.

Nor did it mean that chains were banished from Santa Cruz's downtown. The Gap, Starbuck's, Wherehouse, Jamba Juice and Taco Bell all fill the city's vision of "a reasonable mixture" of chains and local merchants. These stores coexist because they're small enough to contribute to the diversity of what is called a "traditional 'Main Street' downtown."

But now let's switch gears and take a look at Nuz (pronounced "News"), a column in the weekly newspaper, Metro Santa Cruz, which refers to rumors that Redtree Properties "in a fit of pique . . . would get even with Bookshop Santa Cruz owner Neal Coonerty for his opposition to the Capitola project by bringing Borders to downtown Santa Cruz.

"No way, we said.

"Surely Redtree was not that vindictive, we said.

"Surely it would not risk the negative publicity, we said.

"Way.

"It is.

"It did."

Could a developer really be that "vindictive"? Well, Redtree's timing "could hardly be worse," added Nuz: Plans for a Border's in the Redtree building were announced only 10 ten days after the tragic and unexpected death of Neal's wife, Candy. It was as if Coonerty, blindsided by the loss, would not recover in time to fight Borders a second time. "The developer blamed me for masterminding the Capitola protest," says Coonerty. "So yes, I think the timing was deliberate."

Coonerty nevertheless moved quickly: In a letter to the City Planner of Santa Cruz he contended that The Redtree building, designed for multiple storefronts and entrances, would have to undergo such extraordinary redesign for a single tenant (Border's) that new approval would be required by the City Council. This, Neal knew, would mean public hearings - surely packed with an even angrier and more vociferous crowd than those at Capitola - and a Council committed to the Downtown Recovery Plan.

Meanwhile, members of the City Council themselves are seeking adoption of special use permits for buildings over 10,000 square feet because Borders at 25,000 square feet is out of scale and character for the rebuilt downtown. Without such permits, other large buildings could find it too easy to lease to single-tenant superstores and effectively dismantle the Downtown Recovery Plan in a very short time.

The big question, as always, is when should the government step in, and when should the marketplace be left alone. So let's switch gears again to see the kind of argument that's often posed in such debates, this one an editorial in the daily newspaper of the region, the Santa Cruz Sentinel:

"Is there really anything so wrong about a BUSINESS wanting to locate in the city's main BUSINESS district?" it asked about Borders' attempt to move into the Redtree building in downtown Santa Cruz.

"Competition is a good thing. It leads to better services and better prices for the people buying goods, and it allows people to have a choice about where they are spending their dollars. That might not be the Capitola and Santa Cruz way, but it is the model for our economic system.

"If someone doesn't think Borders should move into the county, then they shouldn't shop there. If enough people feel that way, then Borders might close its doors. If people want to support independent bookstores, then they should shop there, and those stores will thrive and not feel like competition is a bad thing that must be driven away at any cost."

Well, this is the argument, many publishing observers believe, that's going to decide who will survive "the bookstore wars." It's what every American thinks about when an independent bookstore in their neighborhood goes under, and it's certainly what every City Council member or Planning Commissioner hears running through the mind whenever people want to stop chain bookstores from coming into their community.

The chains may be killing local stores, according to this argument, but that's the way American business goes sometimes. If the government were to step in to stop or alter free enterprise, that would be favoritism. "Let consumers have the final say," the Sentinel editorial states. "Let the market decide. People deserve a choice, and government has no right to keep that away from them."

But to see what kind of choice consumers can be given in the future, Coonerty and others are saying, we need to go back a decade and see what kind of choices Santa Cruz faced in the past. "When the [1989] earthquake hit," Neal recalls, "the major chain stores in town closed up and left. The people who spent three years working to hold onto what was destroyed downtown were local merchants. They built it back up up.

"Now that the 10th anniversary of the earthquake is approaching, the chains are saying, 'Thanks for getting through the tough times - now we'll come in.' Well, fine, but come in by the same rules that govern everybody else. When I reopened Bookshop Santa Cruz downtown, I had to obey every Planning Department dictate. Borders now seeks major modification of its Design Permit, so let them get City Council approval.

"When we talk about an 'economic model,' it's important to remember that the political values of a community are as valuable as its economic marketplace. Every city government constantly makes decisions about conflicting values and community needs. All you need is a level playing field where everybody can compete equally - that's really the 'economic model' that insures competition for the consumer.

"We do have competition in Santa Cruz, certainly among booksellers," Coonerty adds. "There are four other strong independent bookstores downtown plus the Capitola Book Cafe nearby that all contribute to a vital, vibrant marketplace of books that serves consumers well. Bringing Borders in is like deliberately dropping a bomb to wipe out competition, not to foster it, because Borders does not compete on a level playing field."

Coonerty is not the only independent bookseller to contend that Borders is subsidized by illegal deals and unfair business practices that give it the deep pockets to afford huge discounts that drive the competition under. But as the American Booksellers Association's upcoming president, he is perhaps more knowledgeable about the ABA's lawsuit against the chains for just such allegations.

And increasingly Neal and other independents are being joined by consumers, as in the Capitola protests, who understand how chain bookstores distort and exploit "the model for our economic system" for their own benefit. As award-winning poet Adrienne Rich (who lives nearby) wrote in response to The Sentinel's editorial:

"Chain mega-stores do not foster competition: they abolish it. What calls itself 'competition' is actually a ruthless centralization. With financial resources and discounting far beyond what independent merchants can access, the chains can afford to lose money for years in one location, while small businesses are driven under and the 'competition' is wiped out."

But maybe even the cherished concept of competition is a kind of mythology when it comes to the way people really do business in the United States today. Maybe "the model for our economic system" that most independent booksellers and merchants apply in towns and cities across the country is a mixture of cooperation and competition.

"There used to be a place called the United Cigar Store that had a huge selection of magazines," Neal recalls. "Until the owner retired, the Bookshop didn't carry a magazine section because we wanted him to have it. Now magazines are a big part of our business. The same goes for a sprituality bookstore, a used book store and other independents - we do events together; we refer customers to each other. We cooperate.

"That's a big difference from this chain store that sold records and tapes down the way that wouldn't budge when Herland, a feminist bookstore of less than 1000 square feet, wanted to rent space in the same building. Because Herland sold a few CD's the chain refused to cooperate - it didn't want the competition."

What's going on in Santa Cruz is "a vital debate," says Adrienne Rich, "for the country at large," Adrienne Rich wrote in her letter to The Sentinel. During the "tent city" years following the earthquake, she said, "holding the downtown together was a heroic achievement of cooperation . . . If 'competition' requires that we scrap independent enterprise, loyalty, social continuity, local individuality and pride, what kind of bargain is that?"

Why accuse Borders of belligerence? Because even if the chain perceives the routine clobbering of independent bookstores as business as usual, surely Santa Cruz is a different story. It doesn't want Borders; it doesn't need Borders; it has brought a spirit of cooperation to the "economic model" of competition, and it's serving readers, as Coonerty attests, very well indeed.

Probably all independent booksellers rely on each other with this kind of enlightened interdependence, but Santa Cruz is still "a community rebuilding out of ruins," as Rich says. Why a corporation has to force itself on a community that doesn't want it is beyond belligerence. But then, if the Borders folks act like the last generation of chain stores in the area, one more earthquake could rout 'em out for good.

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LETTERS

Dear Holt Uncensored,

This is in response to a letter in Holt Uncensored #88, taking ABA to task for initiating an effort enabling bookstore members to generate -- if they choose to -- support for sales tax. A great many booksellers have requested help on this issue. ABA has not chosen simply to initiate action itself. The emphasis of our effort is upon recommending and demonstrating to our core members -- independent, bricks and mortar bookstores -- an effective outline for taking action in their respective communities; really, to give them a way to let themselves and their INDIVIDUAL CUSTOMERS, all of whom are citizens of those communities, express themselves to government representatives. What they want are the following:

a. A level and competitive playing field in the book industry. b. Existing book companies that presently, by law, should be charging and collecting sales tax, to do so. Neither barnesandnoble.com nor borders.com, as I understand it, charge or collect sales tax, in spite of the fact that their dotcom enterprises, while separate coporate structures from their physical-store operations (perhaps designed to evade the collection of tax), create nexus all over the place -- advertising their physical and virtual businesses together; creating in-store kiosks from which customers may order from their web sites; accepting returns in their physical stores for books purchased from virtual sites, etc. These giant corporations whine that collecting sales tax is "too complicated."

Many ABA stores have web sites and many have a great deal of mail-order business, as I do in my own store. I will not mind, nor do I believe other independent bookstores will mind, including booksense.com (actually, a bargain for ABA stores) participants, collecting tax for this business AS LONG AS COMPETITORS ARE REQUIRED TO DO THE SAME.

c. Basic civic responsibility. Our members are businesses which for the most part have a high level of interaction in their communities. They are involved in civic and public matters and strive to develop and support in their communities programs, services and institutions that promote the public good -- schools, libraries, arts programs, health care, and on and on. These things are supported by tax dollars, significant amounts of which are derived from sales tax revenue.

Virtual book businesses often brag about their ability to create "community." I understand what they're talking about, but - please - let's not call it community. I wonder where the author of this letter is from. Judging from the signature, it looks like the community of anonymity.

Richard Howorth
President, ABA

Dear Holt Uncensored:

Years ago, I shared Alice's dismay at the ripping off of covers and destruction of paperback books. However, it's only fair to tell the whole story.

These were not the trade paperbacks so common today. They were the mass paperbacks, often sold retail for less than one dollar. And the point of ripping off the cover was to send it back to the publisher for return - for money. It was deemed cheaper - and was, dollarwise - to destroy these masses of cheaply made books, rather than spend the postage and work hours to return them.

I have to say that occasionally I did see stacks of coverless mass paperbacks for sale - in small, independent, used bookstores, where clearly the author was being cheated of her royalties as well as the publisher, where the bookstore owner had collected for "returns" then collected again in selling. Or maybe someone who was supposed to have destroyed books had made a bit of change by selling them cheap to this used book seller.

Rather than blaming the chains (on which we have much else to blame, granted), we have to blame the psychology of waste within our whole society. I'm not sure how widely this practice continues. My impression is that as paper and manufacturing costs have risen, there are more trade paperbacks, higher prices, and fewer books tossed out en masse and shredded. Is that correct?

Dorothy Bryant

Dear Holt Uncensored:

It seems as if letter writer "Alice" was not only naive, but continues to be smug and sanctimonious.

I find it astonishing that someone could be an employee of Waldenbooks and be unaware they were owned by KMart. I'm willing to attribute that to her youth. But her attitude about so-called "bodice rippers" is pervasive among many independent booksellers, especially here in San Francisco.

She writes: "Women were always calling to find out when they would arrive and when they would be unpacked. On the day of arrival, they came in droves, dragging in crowds of small, whiny, sticky children. I remember thinking that they looked like junkies waiting for a fix."

A number of independent booksellers continue to blithely ignore the fact that romance constitutes more than 50% of the mass market fiction market. Other than Stacey's, I'm unaware of a single San Francisco independent bookstore that stocks romance--though all of them seem to think that other genre fiction (thrillers, fantasy, science fiction) meet their standards.

So I take my business [not just romance] elsewhere--to Barnes and Noble, Borders, Waldenbooks, Amazon, et al. Romance readers are as diverse as any other cohort, yet booksellers ignore us. Or worse, insult us.

Joy Rothke

Dear Holt Uncensored:

Alice's story reminded me of something a long time ago. My friends and I were at a shopping mall and we went to a bookstore there. We saw the clerks putting unsold books into a box and tearing off the covers. They were going to be thrown away. Someone asked them if the bookstore would be willing to donate these books to local schools? They said Sure! And these books were donated to the schools. Because of Prop.13, the funds for books dwindled down so the schools were more than happy to get these books. I remember this bookstore was not Waldenbooks. Thought you would like to know this. I think it was an independent bookstore.

Diana

Holt responds: It's a dicey situation because when schools start getting castoffs from stores (or book review editors) the pressure to keep and lobby for acquisition budgets is alleviated just enough to make a difference, so I worry about the implications and I think any publisher would, too. As a book review editor I tried to make sure we gave away unreviewed copies to places that didn't have acquisition budgets and wouldn't resell the books - the local jail, veterans' hospital, convalescent homes, shelters, community centers, etc. It's a constant battle whenever a crippler like Proposition 13 enters the picture because schools and libraries are simply abandoned, yet if the bookselling/book reviewing community rallies to help them with unsold/unreviewed books, the result could be devasting to a distribution system of books that is so vulnerable, even delicate.

Dear Holt Uncensored:

Don't knock Fatbrain, Pat. Maybe you can publish "Remainders of the Day" this way.

Wayne

Dear Holt Uncensored:

Amazom.com, Barnes and Nobel and Borders draw a considerable amount of flack from Holt Uncensored, the majority of which I would have to say is justified. Each of these companies serve to perpetuate the great many appalling practices employed within the publishing industry. This is consistent with the fact that book publishing and book selling is “Big Business.” Why is the book business “Big Business?” Because people are buying books. People are acquiring books new, used and otherwise. This simply means that people are reading. Whether it be Shakespeare or Steele, people are buying and reading books printed on paper. They are turning pages not scrolling “e-pages” burned to a CD ROM. Regardless of where or how they buy books, people are reading. I like the idea of a growing level of literacy or at least a well established level of literacy maintained. It's easy to criticize the books people read or to criticize people for where they buy their books. It's easy to recommend and pass along good books. It's easy to make someone aware of the evils of the mega-stores and the mega.coms and introduce them to the Independent around the corner. But in doing so no one should ever be discouraged from reading or denied access to books. That, of course, is not the intention of this forum. But I would hate to see someone relying upon Amazon.com for their reading material discouraged from buying books and reading because of habitual criticism of non-independent booksellers. While this is highly unlikely to occur, it would be nice to see a little positive reinforcement for readers of all sorts thrown into the mix.

David W. Sumner
San Francisco