The final chapter of BookSmart may soon be written.
Citing mounting debt following a move from downtown Morgan Hill to East Dunne Avenue, BookSmart owners Brad Jones and Cinda Meister face the imminent closure of their Morgan Hill mainstay.
“It’s heartbreaking,” Meister said. “This is our passion, to be part of the community and to support literacy and the arts. It’s a safe place for the community to gather. It’s much more than a bookstore.”
Friday afternoon, the day after Jones and Meister announced the news of their store closing via email, aggrieved longtime customers came forward to pay their condolences.
“A lot of our regulars have come forward asking what they can do,” Jones said.
In its 22 years as Morgan Hill’s independent bookstore, BookSmart has cultivated a loyal core of supporters. Last Friday, March 23 those customers were shocked to read an email sent by Jones and Meister announcing their decision to close.
“It is with heavy hearts we must announce our closing,” the message read. “The move to our Dunne location was very costly—financed with high interest and short-term loans. Our effort to refinance this debt has been unsuccessful and therefore we are unable to pay our bills. Starting today, we are liquidating our merchandise to pay our vendors and taxes.”
The store’s owners estimate BookSmart will be closed within a month or month-and-a-half, unless they receive a sudden infusion of financing from a surprise source.
To finance their move in 2016 from downtown Morgan Hill to their current location at 1295 E. Dunne Ave., Jones and Meister ran up what would become a mountain of debt—$250,000 worth.
The move, which took almost five months, left a vacuum of revenue. It also broke up the spending habits of former customers who went elsewhere, said the owners. Along with the cost of prepping the new location, the ongoing expenses cut deeper and deeper into the store’s economic vitality. Eventually, it became too much to bear, and Jones and Meister said they were forced to bow to the economic reality.
BookSmart was also plagued by the cost of rent, which for them is about $7,500 a month. They said they are now five months behind on the rent.
MORE THAN A BOOKSTORE
BookSmart started as a small bookshop in downtown Morgan Hill. Jones and Meister branched out when they soon after added a toy store and a coffee shop to their book retail business. When the opportunity came to move to a larger location, they decided to put all three ideas together into one place at the downtown shopping center known as Depot Center, on East Second Street.
“We bought an option to eventually own the property ourselves,” Jones said. “We paid more money up front so we could buy it later. Then, the economy changed and all the opportunities we had to purchase the property evaporated. We brought in some financial partners, but the city eventually bought the option on the property.”
Specifically, the city’s Redevelopment Agency purchased BookSmart’s option on their former downtown site in 2010 for $1.7 million. Even though the state shut down the RDA in 2011, state regulators allowed the City of Morgan Hill to keep the option, and later sell it to developer City Ventures in order to complete the RDA’s former vision of modern mixed-use, residential/commercial development on the former Depot Center property and sites throughout the downtown.
The old 25,000-square-foot Depot Center building, which had been a number of things in the past—including an egg plant—was also the home of several other local businesses, most of which also relocated out of the downtown neighborhood in 2016 before City Ventures demolished the structure. BookSmart moved to its current, and likely final location in a newer commercial shopping center in east Morgan Hill, near the intersection of East Dunne Avenue and Condit Road.
According to Jones, BookSmart received no help during the move.
“The city helped the other tenants to move, but in the contract, we signed when we purchased the option to buy the building, we also waived our rights for future relocation,” Jones said.
After the move outside the downtown in 2016, BookSmart remained steadfast in its efforts to support community arts and culture. Jones and Meister formed the nonprofit BookSmart Community Advantage program, which has offered fun and educational workshops, art lessons, music classes and more, primarily geared toward children. Without a center of operation, the future of Community Advantage is uncertain and the foundation’s board are exploring other options.
As downtown Morgan Hill continues to ride a wave of redevelopment and renewal, BookSmart owners feel they have been left high and dry.
“I was the president of the downtown association for years, and we really wanted the downtown to be something special, and right on the verge of that happening, we were out,” Jones said.
As the crisis loomed, Jones and Meister launched a Gofundme campaign in July which eventually raised $20,000. The also sought financial relief by applying for a loan from the Grow Morgan Hill Fund. Despite support from the city council, their application was rejected since they’ve been operating at a financial loss for the last two years.
“It would take someone to help us refinance the loan. That would mean, $250,000 over 10 years so we could make the monthly payments,” Jones said. “Every payment we make now goes to service the debt and nothing more.”
Today, the old home of BookSmart is long gone. The corner of Second Street and Depot Street is now a construction zone, where City Ventures is building its project, consisting of commercial units on the ground floors and a number of “live-work” residences upstairs.
And, while Morgan Hill leaps into the future, Jones and Meister will make a similar leap into the unknown.
“We don’t know what we’re going to do; we need to find jobs,” said Jones, who was scheduled for a hip replacement surgery at the hospital this week. “We put every penny we had in this, and we put other people’s money into it too. We need to pay them back.”