Jan. 25, 2011

Borders and Noon Hookah close doors

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Borders on East 53rd Street and South Hyde Park Avenue and Noon Hookah Lounge on East 55th Street and South Lake Park Avenue are closing their doors, the stores announced this week. The two closures make it a bittersweet week for Hyde Park retail, which hopes to get a boost from the anticipated opening of the Five Guys burger joint on 53rd and Harper Avenue.

Noon Hookah Lounge closed to customers last Saturday, after a rent increase caused owner Kal Muhammad to decline to renew the business’s five-year lease with MAC Property Management. MAC signed the lease with Muhammad about a year after they bought the property in 2005.

A new tenant has already signed a lease for the property, said Director of Community Development for MAC Property Management Peter Cassel. According to Muhammad, a nail salon will be opened in its place.

Cassel would neither confirm nor deny the signing of the lease for a nail salon.

Muhammad said business had been good, but that MAC’s proposed increase wasn’t economically feasible for the lounge. “We didn’t have any problems with customers. We have a great customer base, a lot of loyal customers that we appreciate, that were very upset with us closing. But it kind of wasn’t by choice,” he said.

Instead, Muhammad said, there had been issues renegotiating a lease with MAC. Cassel declined to comment on the lease, citing business policy.

According to Muhammad, MAC had raised the rental prices and then ignored his attempts to renegotiate.

“It was the lease process, renegotiating the lease, that’s all it was. Basically it was a miscommunication from the landlord’s part with us and lack of opportunity to renew the lease at a reasonable rate,” he said.

“I had sent them my offer to renew the lease. And their response: they kind of ignored me for a while. Which I came to find out later it was because they were negotiating a lease with someone else. They finally returned my call letting me know that somebody else has already signed the lease for the space and that they did not want to renew my lease,” he said.

Cassel said retail in Hyde Park is healthy and on an upward trajectory, citing turnover among stores as evidence.

“I would say that in the last year we’ve had two new businesses open—that would be Phli and Tamer Hair Salon—and then we grab this third lease that signed [at the current Noon Hookah Lounge location]. And if you look back two years, five of the existing businesses [on 55th Street] renewed their leases. So we have a pattern of renewal, growth, and new businesses,” he said.

The decision to close the Borders store was announced last Friday, according to a manager who declined to be named because he was not authorized to discuss the closing. The bookstore, which is currently offering large discounts on both its inventory and furnishings, will close on March 4.

“This came literally out of nowhere,” said another employee.

Other Borders stores around the country have already closed, including the flagship store at 830 North Michigan Avenue—the largest Borders store nationwide.

According to Borders spokesperson Mary Davis, the decisions to close the stores were independent of each other.

“We regularly evaluate our portfolio of stores to make sure that each and every one within the chain is meeting our business objectives. And we make decisions on a case-by-case basis to close stores that don’t meet those objectives. The stores that we’ve closed in the Chicago area and others we’ve closed nationwide have not met our business needs,” she said.

According to Davis, the future is uncertain for the Borders employees at the 53rd Street location. Some will be offered positions at other stores, while others will be laid off. “Typically, when we go to close a store we take a look at the staff to see where we can place them at other area stores, when it makes sense for them and it makes sense for the company,” said Davis.

With over a month before doors close permanently, not all the details have yet been worked out for the current employees, Davis said. “It’s still very early in the process, they were just told, just in the last couple of days,” she said.