San Antonio officials looking to maintain balance on the River Walk have found a number to help them meet their goal -- nine.
Under a proposal drafted by the city attorney, restaurants with nine or more identical establishments would be banned from the famed tourist destination, with a few exceptions. The ordinance would make San Antonio the second of the country's 10 largest cities to enact such a restriction.
But it wouldn't necessarily keep companies such as Landry's Restaurants Inc. -- the Houston company city officials say spurred the proposal's creation -- off the river.
"We can't make it owner-driven," City Attorney Michael Bernard said, explaining that banning a specific company would violate laws governing interstate commerce.
In other words, the city isn't trying to keep away specific corporations, but chain restaurants owned by those corporations.
The city plans to keep chains in check by limiting what it calls formula restaurants -- those that share characteristics such as names, menus, staff uniforms and signs with at least nine others. San Antonio settled on nine for its definition because of a California court case upholding similar legislation, Bernard said, adding that the number could change before the measure comes up for a vote.
Formula restaurants would be banned from the densely populated horseshoe section of the river unless they are replacing other chain restaurants closed in the previous year. They also would be prohibited from occupying more than 4,000 square feet of dining space on a single level and be required to locate at least 500 feet away from the nearest chain restaurant. The rules would not apply to restaurants already on the river.
Landry's, which has three restaurants -- Joe's Crab Shack, Landry's Seafood House and Rainforest Café -- on the River Walk, is against the city's proposal.
"While we strongly support the effort to ensure that the River Walk remains distinctive and authentic, we believe that effectively discriminating against certain potential business tenants will end up impeding, not encouraging, this cause," Landry's Chief Executive Tilman Fertitta said in a written statement.
But as long as the Saltgrass Steakhouse his company is planning for the River Walk's historic Casino Club is operating before the city approves the changes, it would be allowed.
The company also could open new restaurants on the river as long as they had fewer than nine similar locations. For example, Landry's high-end Vic & Anthony's steakhouse, which has only two other locations, could open anywhere on the river.
Parker Scott, president of the Paseo del Rio Association, a nonprofit group dedicated to promoting and preserving the River Walk, isn't sure San Antonio needs the restrictions.
"There hasn't been this explosion of formula restaurants on the river," he said, saying a net two new formula restaurants had joined the River Walk since 2000. "A lot of us kind of wonder in the back of our mind if somebody's not just pointing the gun at Landry's."
There are other potential problems. The measure might discourage investors or punish successful restaurateurs, including those that are locally based. "Look at Grady's Bar-B-Q," Scott said, "They're local, but if they had one or two more stores they couldn't locate on the river."
San Antonio's proposed ordinance, a draft of which is online at www.sanantonio.gov, is based on rules in place in other cities, mostly on the East and West coasts.
San Francisco, the only other major metropolitan area with similar legislation, prohibits formula retailers with 11 or more locations from one neighborhood and forces them to be part of a neighborhood review process in others.
San Antonio native and local restaurateur Lisa Wong thinks similar restrictions will help the River Walk maintain a unique ambience. "There's a cultural feel you can only get along the River Walk," she said. "This is an issue worth fighting for."
Leisa Stilley, a Missouri resident here for a convention, just wants to be able to visit both chains and independents the next time she's in San Antonio. "You need at least a couple of chains for people to feel comfortable," she said. "You want to venture out and try something new, but sometimes you just want a good, old cheeseburger."
Among the restaurants she visited during her week on the River Walk -- Chili's.
Tuesday, June 19, 2012
City to take another crack at Riverwalk vending dispute
For 17 years, Hal McCloskey has sold roses along the River Walk, taking only the occasional day off for a Rolling Stones concert.
"I love what I'm doing," he said. "This is one of the better jobs I've had in my life, and I've had plenty of jobs."
McCloskey sells hundreds of roses along the River Walk each week, but downtown leaders say the popular tourist attraction just isn't the place for vendors like him.
Next month the City Council is scheduled to consider a proposal aimed at giving vendors a legal shot at tourism dollars while quieting concerns that vending is turning the city's crown jewel into a carnival. The measure would be at least the third ordinance attempting to limit vending along the River Walk.
"You have to exercise reasonable controls on the river or ultimately you'll lose the beauty and uniqueness of it," Mayor Phil Hardberger said. "When all is said and done, it's probably best not to have vendors on the river."
In a years-long battle, downtown leaders have maintained that vendors -- who sell items including blinking devil horns, incandescent swords, roses, caricatures and live mariachi performances -- detract from the River Walk's natural charm. Vendors insist they are part of that charm.
"People enjoy what I do. It adds to the River Walk," said Robert Martinez, a caricature artist who has worked on the river for more than a decade.
Martinez said the fight over vending is really about one thing: store operators' fear of competitors with less overhead.
"Some of the bigger businesses want to have control on the River Walk," he said. "They feel that if a smaller business like mine comes in, it's taking away from their business."
Opponents of River Walk vending insist that isn't the case.
"It's not about the small guy vs. the big guy," said Greg Gallaspy, executive director of the Paseo del Rio Association. "It's that there's a place for vending, hawking and peddling, but it's just not on the River Walk."
Still, tourist Kailash Agrawal, who moved to Austin from India three years ago, doesn't think vendors take anything away from the River Walk experience. "As long as they're just sitting on the side, I don't mind them at all," he said.
Vendors have been working on the river for as long as anyone can remember. As early as the 1950s, the city made it illegal to vend on the river, but the restriction was never enforced.
"At the time, there weren't a whole lot of restaurants and businesses down here, so the city did allow some vendors in some locations," said Parker Scott, president of Paseo del Rio and director of operations for two River Walk restaurants.
The city most recently amended its vending ordinance in 2004. The measure required the Paseo del Rio Association to issue permits for vending along the river, but it wasn't enforced because of a lawsuit filed by the Downtown Vendors Association.
Vendors argued the ordinance wasn't legal because Paseo del Rio, an agency opposed to vending and not affiliated with city government, would have been charged with overseeing the permitting process. And they said the city didn't follow proper procedures in implementing the measure.
A court decided Paseo del Rio could legally issue permits, but none was issued after the ruling. Gallaspy said lawyers for both the association and the city advised against issuing permits because of the litigation.
"What the vendors would like is a legal avenue to sell their goods and services," said Paul Fletcher, an attorney representing the vendors group. "They want a workable set of regulations that allows them to stay in the tourism market."
The proposal the council is to hear next week would let vendors work on private property with an operator's permission or get a permit to lease one of several designated River Walk locations. It's not clear what permits would cost or how the process would work, but an $8,000 annual licensing fee has been discussed.
McCloskey said it's a proposal he can live with, but for Martinez it's another story:"I'd have to think of finding another city where I'm more welcomed," he said.
"I love what I'm doing," he said. "This is one of the better jobs I've had in my life, and I've had plenty of jobs."
McCloskey sells hundreds of roses along the River Walk each week, but downtown leaders say the popular tourist attraction just isn't the place for vendors like him.
Next month the City Council is scheduled to consider a proposal aimed at giving vendors a legal shot at tourism dollars while quieting concerns that vending is turning the city's crown jewel into a carnival. The measure would be at least the third ordinance attempting to limit vending along the River Walk.
"You have to exercise reasonable controls on the river or ultimately you'll lose the beauty and uniqueness of it," Mayor Phil Hardberger said. "When all is said and done, it's probably best not to have vendors on the river."
In a years-long battle, downtown leaders have maintained that vendors -- who sell items including blinking devil horns, incandescent swords, roses, caricatures and live mariachi performances -- detract from the River Walk's natural charm. Vendors insist they are part of that charm.
"People enjoy what I do. It adds to the River Walk," said Robert Martinez, a caricature artist who has worked on the river for more than a decade.
Martinez said the fight over vending is really about one thing: store operators' fear of competitors with less overhead.
"Some of the bigger businesses want to have control on the River Walk," he said. "They feel that if a smaller business like mine comes in, it's taking away from their business."
Opponents of River Walk vending insist that isn't the case.
"It's not about the small guy vs. the big guy," said Greg Gallaspy, executive director of the Paseo del Rio Association. "It's that there's a place for vending, hawking and peddling, but it's just not on the River Walk."
Still, tourist Kailash Agrawal, who moved to Austin from India three years ago, doesn't think vendors take anything away from the River Walk experience. "As long as they're just sitting on the side, I don't mind them at all," he said.
Vendors have been working on the river for as long as anyone can remember. As early as the 1950s, the city made it illegal to vend on the river, but the restriction was never enforced.
"At the time, there weren't a whole lot of restaurants and businesses down here, so the city did allow some vendors in some locations," said Parker Scott, president of Paseo del Rio and director of operations for two River Walk restaurants.
The city most recently amended its vending ordinance in 2004. The measure required the Paseo del Rio Association to issue permits for vending along the river, but it wasn't enforced because of a lawsuit filed by the Downtown Vendors Association.
Vendors argued the ordinance wasn't legal because Paseo del Rio, an agency opposed to vending and not affiliated with city government, would have been charged with overseeing the permitting process. And they said the city didn't follow proper procedures in implementing the measure.
A court decided Paseo del Rio could legally issue permits, but none was issued after the ruling. Gallaspy said lawyers for both the association and the city advised against issuing permits because of the litigation.
"What the vendors would like is a legal avenue to sell their goods and services," said Paul Fletcher, an attorney representing the vendors group. "They want a workable set of regulations that allows them to stay in the tourism market."
The proposal the council is to hear next week would let vendors work on private property with an operator's permission or get a permit to lease one of several designated River Walk locations. It's not clear what permits would cost or how the process would work, but an $8,000 annual licensing fee has been discussed.
McCloskey said it's a proposal he can live with, but for Martinez it's another story:"I'd have to think of finding another city where I'm more welcomed," he said.
Thursday, October 14, 2010
Gift Card Graveyard
San Antonio Express-News
Dec. 6, 2007
By Meena Thiruvengadam
Gift cards are a gift of choice again this holiday season, but you might want to regift last year's cards before you rush out to shop for new ones.
Despite spending an estimated $80 billion on gift cards in 2006, consumers have yet to cash in $8 billion in cards they received, according to TowerGroup, a Massachusetts-based research firm.
Of the gift cards bought this year, TowerGroup estimates that $7.8 billion will go unspent.
Sifting through her beige leather wallet, University of Texas at San Antonio graduate Kim Palmer was able to unearth at least two unspent gifts of choice: one to Pier 1 Imports and another to Linens 'n Things. Both were birthday gifts received in June.
"I'm one of those people who likes to shop around a lot before I make a purchase, so I usually hang on to them for a while," Palmer said.
The Pier One card hasn't yet been enough to lure her into the retailer's store and can't be redeemed online. After spending part of the Linens 'n Things card, Palmer slid it between several credit cards in her overstuffed wallet.
"I keep forgetting it's in my wallet when I go there," she said.
An October survey by the Consumer Reports National Research Center found that 27 percent of last holiday season's gift card recipients still have at least one unused card sitting around. The figure is surprising because gift cards increasingly have been replacing ugly sweaters, useless trinkets and fruitcakes under Christmas trees across the country.
Spending on gift cards during the holiday season -- one of the busiest for gift card purchases -- has climbed from $17.2 billion in 2003 to nearly $25 billion last year, according to the National Retail Federation. The federation estimates that consumers will spend a record $26.3 billion on gift cards this holiday season.
Nearly 57 percent of shoppers plan to buy them, and 53 percent of people hope to receive them, making gift cards one of the most popular items on this year's Christmas wish lists, according to the federation's data.
"Many consumers have held off on making purchases solely for themselves this year, so they're looking at gift cards as a way to purchase that something they've been looking at all year long" said Kathy Grannis, a federation spokeswoman.
But if everyone loves gift cards so much, why aren't they spending them?
Ashley Sumners, a former teacher in Texarkana, still has a $100 Tuesday Morning gift card she received as a wedding gift in 2005.
"I have gone in several different stores in different cities to try to find something but just haven't found anything I want," the 26-year-old Fort Worth native said. "I feel bad about not spending it, but that's not exactly a store that 20-somethings shop at." Like Sumners, 35 percent of consumers surveyed by Consumer Reports said they didn't spend gift cards because they couldn't find anything to buy. Nearly 60 percent of survey respondents said they didn't have enough time to shop. More than 33 percent said they either lost or forgot about the cards or that they expired.
So what happens with the money attached to all those unspent cards?
When a retailer sells a gift card, they account for it as a debt owed to the card's holder. That debt morphs into sales revenue when the card is used or expires.
For retailers such as Barnes & Noble and Best Buy, whose gift cards never expire, the scenario becomes more complicated.
The companies legally must keep unspent gift cards on their books as a liability until they are spent or are deemed very unlikely to ever be redeemed.
"It's a little bit of an accounting headache because it's sitting out there," said Tom Burke, executive vice president of e-commerce at barnesandnoble.com. "But we want customers to be able to wait however long they want to wait to make a purchase." At any given time, an estimated 10 percent of Barnes and Noble gift card dollars are out there waiting to be spent, Burke said.
Dec. 6, 2007
By Meena Thiruvengadam
Gift cards are a gift of choice again this holiday season, but you might want to regift last year's cards before you rush out to shop for new ones.
Despite spending an estimated $80 billion on gift cards in 2006, consumers have yet to cash in $8 billion in cards they received, according to TowerGroup, a Massachusetts-based research firm.
Of the gift cards bought this year, TowerGroup estimates that $7.8 billion will go unspent.
Sifting through her beige leather wallet, University of Texas at San Antonio graduate Kim Palmer was able to unearth at least two unspent gifts of choice: one to Pier 1 Imports and another to Linens 'n Things. Both were birthday gifts received in June.
"I'm one of those people who likes to shop around a lot before I make a purchase, so I usually hang on to them for a while," Palmer said.
The Pier One card hasn't yet been enough to lure her into the retailer's store and can't be redeemed online. After spending part of the Linens 'n Things card, Palmer slid it between several credit cards in her overstuffed wallet.
"I keep forgetting it's in my wallet when I go there," she said.
An October survey by the Consumer Reports National Research Center found that 27 percent of last holiday season's gift card recipients still have at least one unused card sitting around. The figure is surprising because gift cards increasingly have been replacing ugly sweaters, useless trinkets and fruitcakes under Christmas trees across the country.
Spending on gift cards during the holiday season -- one of the busiest for gift card purchases -- has climbed from $17.2 billion in 2003 to nearly $25 billion last year, according to the National Retail Federation. The federation estimates that consumers will spend a record $26.3 billion on gift cards this holiday season.
Nearly 57 percent of shoppers plan to buy them, and 53 percent of people hope to receive them, making gift cards one of the most popular items on this year's Christmas wish lists, according to the federation's data.
"Many consumers have held off on making purchases solely for themselves this year, so they're looking at gift cards as a way to purchase that something they've been looking at all year long" said Kathy Grannis, a federation spokeswoman.
But if everyone loves gift cards so much, why aren't they spending them?
Ashley Sumners, a former teacher in Texarkana, still has a $100 Tuesday Morning gift card she received as a wedding gift in 2005.
"I have gone in several different stores in different cities to try to find something but just haven't found anything I want," the 26-year-old Fort Worth native said. "I feel bad about not spending it, but that's not exactly a store that 20-somethings shop at." Like Sumners, 35 percent of consumers surveyed by Consumer Reports said they didn't spend gift cards because they couldn't find anything to buy. Nearly 60 percent of survey respondents said they didn't have enough time to shop. More than 33 percent said they either lost or forgot about the cards or that they expired.
So what happens with the money attached to all those unspent cards?
When a retailer sells a gift card, they account for it as a debt owed to the card's holder. That debt morphs into sales revenue when the card is used or expires.
For retailers such as Barnes & Noble and Best Buy, whose gift cards never expire, the scenario becomes more complicated.
The companies legally must keep unspent gift cards on their books as a liability until they are spent or are deemed very unlikely to ever be redeemed.
"It's a little bit of an accounting headache because it's sitting out there," said Tom Burke, executive vice president of e-commerce at barnesandnoble.com. "But we want customers to be able to wait however long they want to wait to make a purchase." At any given time, an estimated 10 percent of Barnes and Noble gift card dollars are out there waiting to be spent, Burke said.
Gift Cards: Perfect presents?
San Antonio Express-News
Nov. 24, 2005
Meena Thiruvengadam
At almost any Walgreens in the city, shoppers nowadays can pick up gifts of Starbucks, hotel rooms, makeovers, massages, movie tickets and even race car driving lessons.
The retailer is among the thousands of drug and convenience stores nationwide clamoring to get a bigger piece of the country's nearly $20 billion-a-year gift-card market.
Once considered impersonal and unthoughtful, gift cards have gotten a new image as the perfect presents for picky family members and friends who seem to have everything.
"The stigma of gift cards being the lazy man's gift is gone," said Scott Krugman, a spokesman for the National Retail Federation. "It's really become a gift of choice."
Last year, shoppers spent $17.3 billion -- about 8 percent of all retail sales -- on gift cards, according to the federation. This year, spending is expected to climb to nearly $18.5 billion.
"In a way, giving a gift card is like giving the gift recipient a little freedom," Krugman said. "They're perfect for when you don't know what to get a person, but whatever you get them you don't want them to have to return or exchange it."
Gift cards are expected to be among the most-requested gifts this year, and in the past five years they've become easier than ever to get.
"One of the things that's proliferated in the last few years is what's called gift-card malls," said Bob Skiba, executive vice president and general manager of Stored Value Systems, an electronic gift card provider.
The malls are essentially kiosks in third-party stores that are stocked with gift cards from some of the country's top retailers, including Pottery Barn, Nordstrom and the Gap.
Walgreens, Tower Records, Build-A-Bear and Toys R Us are among the 19 retailers whose gift cards are prominently displayed at checkout lines. Walgreens also carries cards redeemable for Best Western hotel rooms, massages and even "experiences of a lifetime" -- lessons at a Las Vegas race car driving school for $2,300 or a flight on a MiG jet for $1,900.
"This is another one of our tools for making the shopping experience in our store a more convenient one, especially around the busy holiday season," company spokeswoman Tiffany Bruce said.
CVS Pharmacy carries cards from retailers including Barnes & Noble, Radio Shack, Sears, and Bed Bath & Beyond. Exxon stations carry cards from Linens 'N Things, Home Depot and Target.
"In just a few years, gift card malls have gone from 1,500 locations to over 75,000 locations," Skiba said. "The reason why this has spread so rapidly is because it's another way to attract customers into your building."
A recent survey of more than 1,000 Americans found that 27 percent of last year's gift card buyers made their purchases at stores selling gift cards from multiple merchants.
"Part of it is the high price of gasoline," Skiba said. "Instead of driving to the mall and several other locations, you can go to a grocery store and do all of your gift card shopping while you're doing your grocery shopping."
When buying gift cards from third-party retailers, consumers pay face value for the cards. Retailers collect fees from the businesses whose cards they're selling and sometimes attract new shoppers to their stores.
"It gives the retailer another channel through which to reach customers without having to put up any brick and mortar," Skiba said.
The concept started as an experiment in California but quickly took off, thanks in part to its popularity among busy women shoppers.
"Because we're a time-strapped society," the National Retail Federation's Krugman said, "this really works."
Nov. 24, 2005
Meena Thiruvengadam
At almost any Walgreens in the city, shoppers nowadays can pick up gifts of Starbucks, hotel rooms, makeovers, massages, movie tickets and even race car driving lessons.
The retailer is among the thousands of drug and convenience stores nationwide clamoring to get a bigger piece of the country's nearly $20 billion-a-year gift-card market.
Once considered impersonal and unthoughtful, gift cards have gotten a new image as the perfect presents for picky family members and friends who seem to have everything.
"The stigma of gift cards being the lazy man's gift is gone," said Scott Krugman, a spokesman for the National Retail Federation. "It's really become a gift of choice."
Last year, shoppers spent $17.3 billion -- about 8 percent of all retail sales -- on gift cards, according to the federation. This year, spending is expected to climb to nearly $18.5 billion.
"In a way, giving a gift card is like giving the gift recipient a little freedom," Krugman said. "They're perfect for when you don't know what to get a person, but whatever you get them you don't want them to have to return or exchange it."
Gift cards are expected to be among the most-requested gifts this year, and in the past five years they've become easier than ever to get.
"One of the things that's proliferated in the last few years is what's called gift-card malls," said Bob Skiba, executive vice president and general manager of Stored Value Systems, an electronic gift card provider.
The malls are essentially kiosks in third-party stores that are stocked with gift cards from some of the country's top retailers, including Pottery Barn, Nordstrom and the Gap.
Walgreens, Tower Records, Build-A-Bear and Toys R Us are among the 19 retailers whose gift cards are prominently displayed at checkout lines. Walgreens also carries cards redeemable for Best Western hotel rooms, massages and even "experiences of a lifetime" -- lessons at a Las Vegas race car driving school for $2,300 or a flight on a MiG jet for $1,900.
"This is another one of our tools for making the shopping experience in our store a more convenient one, especially around the busy holiday season," company spokeswoman Tiffany Bruce said.
CVS Pharmacy carries cards from retailers including Barnes & Noble, Radio Shack, Sears, and Bed Bath & Beyond. Exxon stations carry cards from Linens 'N Things, Home Depot and Target.
"In just a few years, gift card malls have gone from 1,500 locations to over 75,000 locations," Skiba said. "The reason why this has spread so rapidly is because it's another way to attract customers into your building."
A recent survey of more than 1,000 Americans found that 27 percent of last year's gift card buyers made their purchases at stores selling gift cards from multiple merchants.
"Part of it is the high price of gasoline," Skiba said. "Instead of driving to the mall and several other locations, you can go to a grocery store and do all of your gift card shopping while you're doing your grocery shopping."
When buying gift cards from third-party retailers, consumers pay face value for the cards. Retailers collect fees from the businesses whose cards they're selling and sometimes attract new shoppers to their stores.
"It gives the retailer another channel through which to reach customers without having to put up any brick and mortar," Skiba said.
The concept started as an experiment in California but quickly took off, thanks in part to its popularity among busy women shoppers.
"Because we're a time-strapped society," the National Retail Federation's Krugman said, "this really works."
Downtown Starbucks Finds A New Groove
San Antonio Express-News
Dec. 20, 2005
Meena Thiruvengadam
Starbucks, the company that has made $3 coffee the norm, is out to revolutionize San Antonio's retail music landscape.
The Seattle-based coffee chain Monday opened a Starbucks Hear Music Coffeehouse on the River Walk. The two-story, 5,100-square-foot space on Crockett Street boasts thousands of CDs and 35 media bars at which shoppers can burn custom music mixes in the time it takes to make a latte.
"We created this store so that people in San Antonio could come in and discover an incredible artist they've never heard of before," said Don MacKinnon, Starbucks' vice president for music and entertainment.
The San Antonio location, which replaces the old Starbucks on Crockett, is the company's second retail music store.
The first Starbucks Hear Music opened in Santa Monica, Calif., in 2004. A third location is scheduled to open next year in South Miami Beach, Fla.
"Music has really been part of our Starbucks culture from the very beginning, so this extension into the retail music business has really been a very natural thing for us," said Ken Lombard, president of Starbucks Entertainment.
Starbucks began selling CD compilations in 1995. Last year, the company co-released a Grammy award-winning album, and a 2005 album has been nominated for two Grammys.
"We're still a coffee company at heart, but we're also more than a coffee shop," Lombard said.
The Starbucks Hear Music concept was born out of the company's 1999 acquisition of a small retail music chain in Northern California.
"It's an attempt to get people into the store during non-peak hours," said Linda Bannister, a Missouri-based equity analyst with Edward Jones. "The whole strategy in the end is about driving same-store sales."
The strategy has gotten the company on the bad side of some music retailers, though. Earlier this year, retailers complained when Starbucks snagged a deal to be the first retailer to sell an acoustic version of Alanis Morisette's hit album "Jagged Little Pill."
Bannister said it's too soon to gauge the impact the Starbucks Hear Music concept will have on the company's bottom line or how investors feel about the concept.
"At this point it is really too small to move the needle and contribute to Starbucks' growth, but it is another reason for people to visit a Starbucks," she said.
Starbucks Hear Music on the River Walk carries about 10,000 CDs and more than 1 million digital music tracks. For $8.99, customers can burn a seven-song CD complete with album art and a matching label. Additional songs are 99 cents, the same price as an Apple iTunes download.
It's a bargain, said Sebastian Schoerpf, a 17-year-old foreign exchange student from Austria. The Alamo Heights High School student spent Monday looking at the River Walk and listening to Johnny Cash tunes.
"It's pretty cool to have a place where you can go drink coffee and listen to music," he said.
For others, like Ann Cooper-Akeia, the store is a place to get acquainted with the idea of making your own CDs.
"I don't know anything about downloading music or any of that, and when I think of burning music, I think of lighting a 45 on fire with a match," said the Hurricane Katrina evacuee, 56. "Here, all you have to do is push a button to make a CD. That I can do."
Dec. 20, 2005
Meena Thiruvengadam
Starbucks, the company that has made $3 coffee the norm, is out to revolutionize San Antonio's retail music landscape.
The Seattle-based coffee chain Monday opened a Starbucks Hear Music Coffeehouse on the River Walk. The two-story, 5,100-square-foot space on Crockett Street boasts thousands of CDs and 35 media bars at which shoppers can burn custom music mixes in the time it takes to make a latte.
"We created this store so that people in San Antonio could come in and discover an incredible artist they've never heard of before," said Don MacKinnon, Starbucks' vice president for music and entertainment.
The San Antonio location, which replaces the old Starbucks on Crockett, is the company's second retail music store.
The first Starbucks Hear Music opened in Santa Monica, Calif., in 2004. A third location is scheduled to open next year in South Miami Beach, Fla.
"Music has really been part of our Starbucks culture from the very beginning, so this extension into the retail music business has really been a very natural thing for us," said Ken Lombard, president of Starbucks Entertainment.
Starbucks began selling CD compilations in 1995. Last year, the company co-released a Grammy award-winning album, and a 2005 album has been nominated for two Grammys.
"We're still a coffee company at heart, but we're also more than a coffee shop," Lombard said.
The Starbucks Hear Music concept was born out of the company's 1999 acquisition of a small retail music chain in Northern California.
"It's an attempt to get people into the store during non-peak hours," said Linda Bannister, a Missouri-based equity analyst with Edward Jones. "The whole strategy in the end is about driving same-store sales."
The strategy has gotten the company on the bad side of some music retailers, though. Earlier this year, retailers complained when Starbucks snagged a deal to be the first retailer to sell an acoustic version of Alanis Morisette's hit album "Jagged Little Pill."
Bannister said it's too soon to gauge the impact the Starbucks Hear Music concept will have on the company's bottom line or how investors feel about the concept.
"At this point it is really too small to move the needle and contribute to Starbucks' growth, but it is another reason for people to visit a Starbucks," she said.
Starbucks Hear Music on the River Walk carries about 10,000 CDs and more than 1 million digital music tracks. For $8.99, customers can burn a seven-song CD complete with album art and a matching label. Additional songs are 99 cents, the same price as an Apple iTunes download.
It's a bargain, said Sebastian Schoerpf, a 17-year-old foreign exchange student from Austria. The Alamo Heights High School student spent Monday looking at the River Walk and listening to Johnny Cash tunes.
"It's pretty cool to have a place where you can go drink coffee and listen to music," he said.
For others, like Ann Cooper-Akeia, the store is a place to get acquainted with the idea of making your own CDs.
"I don't know anything about downloading music or any of that, and when I think of burning music, I think of lighting a 45 on fire with a match," said the Hurricane Katrina evacuee, 56. "Here, all you have to do is push a button to make a CD. That I can do."
Wednesday, July 7, 2010
A Bailed-Out Bank Now Tests Treasury's Willingness to Step In
By Meena Thiruvengadam
The Wall Street Journal
By missing a sixth quarterly dividend payment due to the U.S. in May, a Southern California bank is poised to test just how far the government will extend its reach into the smaller corners of the private sector.
Saigon National Bank, a Westminster, Calif., bank focused on making loans to the area's Vietnamese business community, hasn't paid any dividends since obtaining $1.55 million in taxpayer funds in December 2008.
"We can't pay a dividend without OCC approval, and they haven't approved payment of the dividend," Saigon's Chief Financial Officer Roy Painter said, referring to the Office of the Comptroller of the Currency, which regulates the bank.
Saigon National is so far the only government-aid recipient to have missed six dividend payments, which triggers the Treasury's right to appoint two directors to a bank's board. A dozen others are close, but it isn't clear whether the Treasury will exercise its right to appoint directors at the institutions.
The Treasury still is considering its options, David Miller, chief investment officer for the Treasury's Office of Financial Stability, told lawmakers last month. But as the U.S. considers just how involved it will get with the mostly small banks that are behind on payments, missed payments are stacking up.
The number of banks missing dividends has been rising each quarter, with 74 missing a February due date -- some because of regulatory restrictions. By February, a dozen banks were behind by at least four payments. At least one of them, Kansas-based Bank of Blue Valley, missed a fifth payment in May.
"We have the cash to pay the dividends, but our primary regulator is saying preserve your capital right now," said Mark Fortino, Bank of Blue Valley's chief financial officer. "Things are much better than they were, but we're still not making the millions that we used to make."
If the experience of Ally Financial is any example, Bank of Blue Valley, Saigon National and several other institutions may see the Treasury appoint members to their boards. The Treasury last month exercised its right to appoint a member to the board of Ally, the lender formerly known as GMAC Financial Services. The Treasury in December boosted its support to the lender, taking a 56% equity ownership stake and getting the right to appoint four directors.
Should the Treasury decide to appoint board members at banks, however, it could face a challenge. Many banks have suspended payments to directors and the positions themselves have lost prestige as public sentiment toward the financial sector has soured.
"Trying to find good directors for community banks right now is rather difficult," said Rob Klingler, an attorney with Bryan Cave LLP in Atlanta. He noted, however, that banks don't seem worried about having the government select board members.
"If they want to send someone to our board meetings, we have no issues with that," Mr. Fortino said. "Frankly we want their input."
Saigon's Mr. Painter took a similar stance. "I would expect someone that the Treasury would submit would be quite qualified and probably would provide us with good input for running the bank," he said.
The Wall Street Journal
By missing a sixth quarterly dividend payment due to the U.S. in May, a Southern California bank is poised to test just how far the government will extend its reach into the smaller corners of the private sector.
Saigon National Bank, a Westminster, Calif., bank focused on making loans to the area's Vietnamese business community, hasn't paid any dividends since obtaining $1.55 million in taxpayer funds in December 2008.
"We can't pay a dividend without OCC approval, and they haven't approved payment of the dividend," Saigon's Chief Financial Officer Roy Painter said, referring to the Office of the Comptroller of the Currency, which regulates the bank.
Saigon National is so far the only government-aid recipient to have missed six dividend payments, which triggers the Treasury's right to appoint two directors to a bank's board. A dozen others are close, but it isn't clear whether the Treasury will exercise its right to appoint directors at the institutions.
The Treasury still is considering its options, David Miller, chief investment officer for the Treasury's Office of Financial Stability, told lawmakers last month. But as the U.S. considers just how involved it will get with the mostly small banks that are behind on payments, missed payments are stacking up.
The number of banks missing dividends has been rising each quarter, with 74 missing a February due date -- some because of regulatory restrictions. By February, a dozen banks were behind by at least four payments. At least one of them, Kansas-based Bank of Blue Valley, missed a fifth payment in May.
"We have the cash to pay the dividends, but our primary regulator is saying preserve your capital right now," said Mark Fortino, Bank of Blue Valley's chief financial officer. "Things are much better than they were, but we're still not making the millions that we used to make."
If the experience of Ally Financial is any example, Bank of Blue Valley, Saigon National and several other institutions may see the Treasury appoint members to their boards. The Treasury last month exercised its right to appoint a member to the board of Ally, the lender formerly known as GMAC Financial Services. The Treasury in December boosted its support to the lender, taking a 56% equity ownership stake and getting the right to appoint four directors.
Should the Treasury decide to appoint board members at banks, however, it could face a challenge. Many banks have suspended payments to directors and the positions themselves have lost prestige as public sentiment toward the financial sector has soured.
"Trying to find good directors for community banks right now is rather difficult," said Rob Klingler, an attorney with Bryan Cave LLP in Atlanta. He noted, however, that banks don't seem worried about having the government select board members.
"If they want to send someone to our board meetings, we have no issues with that," Mr. Fortino said. "Frankly we want their input."
Saigon's Mr. Painter took a similar stance. "I would expect someone that the Treasury would submit would be quite qualified and probably would provide us with good input for running the bank," he said.
Wednesday, September 9, 2009
US Treasury May Lose On Auto Deals Despite Tough Terms
By Meena Thiruvengadam
The Wall Street Journal
WASHINGTON -- The U.S. Treasury Department drove a hard bargain but likely won't recoup taxpayers' entire investments in General Motors (GM) and Chrysler (C.XX), according to a new report from a congressional panel overseeing government bailouts of the banking and auto sectors.
The panel, though, commended the Treasury's efforts to function as a tough "negotiator" when it came to structuring deals to save the ailing automakers. "They may have driven the best bargain they could, but it may not be enough," said Elizabeth Warren, a Harvard University law professor and the panel's chair.
"Treasury has indicated they don't think its going to be enough," she said, referring to recent remarks by Obama administration manufacturing advisor Ron Bloom, who previously headed the Treasury's auto rescue efforts. The report cited Bloom as indicating last month "that it was possible but unlikely that taxpayers would recover all of the money they had invested in Chrysler and General Motors."
Overall, the Treasury has disbursed nearly $80 billion in aid to the U.S. auto sector, including money for suppliers and funds to cover consumer warranty costs. While some money, like $1.5 billion loaned to Chrysler Financial, has been repaid, officials are doubtful all loans made to Chrysler and General Motors will be fully repaid. Warren believes it is unlikely, however, she didn't venture a guess as to just how much taxpayers could lose.
Despite her compliments of the Treasury's negotiating skill, Warren continued to chide the department for a lack of transparency in its operations and for failing to provide a legal argument for its decision to step in and rescue the auto sector. The panel recommended Treasury to "use its role as a significant shareholder in Chrysler and GM to ensure that these companies fully disclose their financial status and that the compensation of their executives is aligned to clear measures of long-term success."
It also suggested Treasury consider putting government holdings of the auto companies' shares in a trust to insulate them from "political pressure and government interference."
Rep. Jeb Hensarling, R-Texas, rejected the panel's report, saying instead: "With the economic suffering the American taxpayers have endured during the past two years one wonders why Chrysler and GM merited such generosity to the exclusion of other taxpayers. The government clearly picked winners and losers."
The Wall Street Journal
WASHINGTON -- The U.S. Treasury Department drove a hard bargain but likely won't recoup taxpayers' entire investments in General Motors (GM) and Chrysler (C.XX), according to a new report from a congressional panel overseeing government bailouts of the banking and auto sectors.
The panel, though, commended the Treasury's efforts to function as a tough "negotiator" when it came to structuring deals to save the ailing automakers. "They may have driven the best bargain they could, but it may not be enough," said Elizabeth Warren, a Harvard University law professor and the panel's chair.
"Treasury has indicated they don't think its going to be enough," she said, referring to recent remarks by Obama administration manufacturing advisor Ron Bloom, who previously headed the Treasury's auto rescue efforts. The report cited Bloom as indicating last month "that it was possible but unlikely that taxpayers would recover all of the money they had invested in Chrysler and General Motors."
Overall, the Treasury has disbursed nearly $80 billion in aid to the U.S. auto sector, including money for suppliers and funds to cover consumer warranty costs. While some money, like $1.5 billion loaned to Chrysler Financial, has been repaid, officials are doubtful all loans made to Chrysler and General Motors will be fully repaid. Warren believes it is unlikely, however, she didn't venture a guess as to just how much taxpayers could lose.
Despite her compliments of the Treasury's negotiating skill, Warren continued to chide the department for a lack of transparency in its operations and for failing to provide a legal argument for its decision to step in and rescue the auto sector. The panel recommended Treasury to "use its role as a significant shareholder in Chrysler and GM to ensure that these companies fully disclose their financial status and that the compensation of their executives is aligned to clear measures of long-term success."
It also suggested Treasury consider putting government holdings of the auto companies' shares in a trust to insulate them from "political pressure and government interference."
Rep. Jeb Hensarling, R-Texas, rejected the panel's report, saying instead: "With the economic suffering the American taxpayers have endured during the past two years one wonders why Chrysler and GM merited such generosity to the exclusion of other taxpayers. The government clearly picked winners and losers."
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