After decades of supporting musicians, this coda is being performed at the Santa Monica Music Center. The historic music store run by interim Mayor Lana Negrete and his family will not continue in its current form, but it is still unclear how it will change or whether it will close.
At best, the store will close its current location on Santa Monica Boulevard and move a smaller store elsewhere. In the worst-case scenario, the Santa Monica-based family-owned business would leave the city and its Culver City location entirely.
In any case, this predicament is a direct result of losses suffered by businesses due to theft and weak or non-existent safety nets for small businesses.
The store was founded by Mr. Negrete's father, Chico Fernandez, who had a dream of opening a practice space and photography studio where local musicians could jam, record, take lessons, shoot album covers, and share their music with the community. was founded 50 years ago by
The Music Center has been around for many years, from Chico's brother Victor introducing the now-essential retail store to Chico's daughter Lana founding a non-profit organization based on Chico's community values and a shared love of music. It has evolved over the years. The store also moved from its original location on Lincoln Boulevard to a larger space at 1901 Santa Monica Boulevard.
While all stores are dealing with petty theft, the Music Center has been hit by a crime wave, with four robberies in three years.
Negrete said the store had little or no theft for most of its history. The original location is on Lincoln Boulevard. A heavy gate was installed to prevent easy access, and although the store was suddenly robbed one day in its early days, the repeated and costly thefts were not something the company had prepared for in advance. Not to mention the unintended consequences of losses.
The first of the recent wave of thefts was actually outright looting during the 2020 riots that spread from downtown. Then, in 2021, the store was robbed, with thieves breaking a window and stealing several guitars. The instruments were actually part of Negrete's non-profit music charity operating at the same location, and although they were replaced through community donations, the location was invaded a second time just a few months later. As a result, replacements were also stolen along with many instruments. Other inventory. A thief broke into the store in May this year.
“Insurance companies will pay a portion of your loss if you can prove it, but they won't cover everything, including business losses, certain structural damages, and consignment replacements because they haven't assessed the value of used equipment. “That was the whole problem for us. So we lost that money,” she said.
Like all other retail stores, the business was severely affected by the extended closures during the coronavirus era, depleting much of its savings to survive during the lockdown and experiencing a high number of thefts.
The financial loss alone is difficult for small, family-owned businesses. Due to various deductibles and insurance policy loopholes, the music center had to pay approximately $90,000 out of pocket to repair the property. But it's not the one-time loss that threatens your business, but the growing loss over time.
Customers were unable to find the items they were looking for in the store because a large amount of inventory was stolen. These individuals initially used up about $250,000 in cash flow needed to actually restock their products by taking their business to the Internet and big box stores.
“Even with the pandemic, we could have opened up a little bit if all our equipment hadn’t been stolen, computers smashed and interiors destroyed. So we had to rebuild our physical space. So we weren't open for those two months. And that hurt a lot, like, while I was paying my employees, I wasn't paying myself. People were… Because even though people signed up and tried to support us by buying guitars and keyboards, it didn't last long. And then people started shopping on Amazon again.”
Inventory issues were further exacerbated by various supply chain issues that occurred in the years following the pandemic.
“The production of musical instruments has been severely affected as much of it comes from China,” she said. “Currently, due to shipping issues, schools that have purchased products from us have unfortunately been delayed so much that they traditionally would not have been able to do so. Because we can't buy as many products as they do, we didn't have everything we needed in stock, so we lost about $147,000 in revenue, which hurt us. .Normally, schools would buy things from us that we couldn't get.”
The store is in a downward spiral as it loses sales due to inventory shortages and is unable to fully restock its inventory. Meanwhile, a potential customer is always following big-box retail trends, and while he might visit a store to browse or ask questions, he ultimately doesn't like Amazon or other big-box retailers. Choose to purchase from the company website.
The business cycle of stores is cyclical due to the lack of payments to institutions during the summer, and this problem is now a crisis.
Desperate to find a way to bridge the emerging gap, Negrete has discovered that much of the government's supposed support for small businesses is more mirage than funding for businesses like hers. said.
She said county officials sent her links to inappropriate aid programs, such as grants to minority-owned food businesses, or that no funds were available even after going through several county processes, or that the population There may be no additional qualifications related to dynamics or it is more important to provide advice than funding.
“I just went through the process, and at the end, after I entered all my business and financial information, I was told that they would evaluate my application, including neighborhood characteristics, such as unemployment and poverty rates. So Santa Monica's poverty rate And unless the unemployment rate is high, I would be excluded.”
She said the way many programs are run actually segregates minority businesses. In her case, if she closed her Santa Monica store and relocated to another area of Los Angeles with a lower median income, her business would likely survive and she would have access to more resources.
“This is just an unintended consequence of us trying to create more opportunities in underserved communities and misdefining communities. Communities and census tracts are different things. ” she said. “If you are trying to help people who share an unequal situation in life, you are completely missing the point… You are trying to create a program, We're trying to help people and you're not helping us,' because based on where the physical business is located, not in terms of who is running the business. Because I'm looking at the community.
That means we are literally liquidating small, minority-owned businesses at a loss, pushing the issue of generational wealth even further away. Actually doing business in cities like Santa Monica by ensuring that minorities have to do business indoors, which may not be profitable for businesses, to gain access to these programs. It becomes more difficult. We want to diversify the local business community. ”
Even if conventional loans were available, the high interest rates would only delay the fiscal strain, he said.
“I worked hard to become a good businessman and accelerated all my debt, and I knew I was doing the right thing. We are a triple-A rated company.” During the pandemic, We paid rent, people received free rent, but I continued to pay my employees during the closure and sacrificed my own payments as owners often do.
“Women of color in small businesses may be eligible for loans that charge exorbitant amounts and fees, putting them in an even deeper hole. If you are a wealthy person who has folded a business and a lawsuit filed against you is still pending, you can still get other relief and loans from your bank. No problem. They make millions of dollars, no questions asked.”
As a City Council member, she knows what programs Santa Monica offers and, in her capacity, doesn't receive any subsidies from the city, but she believes any local programs are too small to be of any real use. Told. To actually help struggling businesses. To be honest, if I could spend less time on the podium and more time working, things would probably be a little different now, but no matter what happens with the store in the near future, I'm sure I'll be able to work. She said she wants to continue. Her actions on council reflect the struggles small business owners face.
“There's no doubt that my job as a city councilor is part of what happened, because I could have done more if I had focused more on my business. “We want to make sure that the policies we have are at least able to help someone else, otherwise avoid this,” she said. “I also feel that people who don't have to do payroll shouldn't be making policy on economic recovery or small business programs.”
editor@smdp.com