This October, Sole Patch founder Ron Mayer could have been gearing up to celebrate his company’s 10th anniversary at Corinth Square in Prairie Village. Instead, he’ll be working on packing up the company’s boxes for a consolidating move.
Citing a sharp hike in rental rates and increases in communal area maintenance fees, Mayer said he decided a few weeks ago not to renew his lease at Corinth. Instead, he’ll focus on making the company’s second location at the Northwood Shopping Center on 47th Street the new hub of all its operations.
Mayer started having concerns about the situation at Corinth shortly after First Washington Realty purchased the center from an investment group led by the Consentino family in 2014. Mayer said the amount Sole Patch had been asked to contribute in communal maintenance fees — monies each tenant at a center pays for items like landscaping and sidewalk cleaning — had jumped by more than 50 percent.
“We noticed a couple of years ago discrepancy in CAM numbers from the landlord that we could not reconcile,” he said. “And as we approached the landlord to give us information, we felt that they were not forthcoming in why prices had increased so much.”
Coupled with a proposed new lease rate that Mayer said would have been more than 60 percent higher than what the company is currently paying, Corinth was no longer an attractive option for Sole Patch, despite the fact that it had enjoyed success at the center for nearly a decade.
“That price increase was so dramatic that we knew we had to consider a plan B,” he said.
Mayer isn’t the only tenant of the Village Shops and Corinth Square to raise concerns about the CAM fee increases since First Washington took over — though most of the tenants aren’t willing to discuss the matter on the record. Tiffany Town owner Bob Harsh, however, did publicly cite the increased CAM fees as a key factor in his decision earlier this year to shutter his card and gift shop after more than half a century in business.
First Washington Realty, via its public relations firm, declined to comment on Sole Patch’s decision to leave Corinth.
Mayer wasn’t shy about suggesting that the sale of the centers — which both have community improvement district sales taxes attached to them that generate revenue for the property owners — contributed to the situation tenants are facing now. The Consentino-led group walked away with $47 million in profit from the transaction. But the high price First Washington paid for the centers appears to have put pressure on the company to steeply increase revenue from the centers.
“When a developer gets tax financing, they should absolutely be handcuffed for how much they can sell the center for and how much profit they can take,” Mayer said.
The final day of operations at the Corinth location will be in late October. November 4 would have marked the company’s tenth anniversary at the center. The Northwood location, which opened in spring 2016, will become the home of all Sole Patch’s stylists and the company will begin communicating the move to its existing clients in the coming weeks. The change at Corinth also prompted Mayer to make a change in the ownership structure of the company.
Mayer will be selling his ownership stake in the company to a group of employees as well as an outside investor. He anticipates having the sale finalized by the end of the year, but will continue to consult with the new owners through 2018.
“I’m an entrepreneur at heart,” he said. “This experiment has reached its goal of being super successful. I’m ready to look at a way to expand the concept.”