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By Sean Howell

When the Menlo Park stationery store Paper Chase closed in October 2008, longtime downtown shoppers lamented the exit of a valued shop, one that had been open for 28 years.

But Jim Gothers, who had just bought The Runners High next door, saw an opportunity. His company's previous owners had long mulled the idea of expanding from the narrow space, to allow them to carry more inventory, and provide more room for customers to maneuver.

"It was a great opportunity for us to expand the space," Mr. Gothers said.

The Runners High is currently operating out of the former Paper Chase storefront, while it renovates its former shop. He expects the full store to open in late August, under a new name -- "Fleet Feet," a franchise retailer Mr. Gothers partnered with to help finance the expansion.

The downturn in the economy also helped push the expansion along. The building's landlord agreed to help pay some of the construction expenses, and met Runners High "part way" on a new lease.

"In booming times, that might not have been the case," Mr. Gothers said. "Given the economic times, I don't think anyone was jumping at (the opportunity to move into the space). We snatched it up before it went on the market."

Mr. Gothers isn't the only local business owner who is finding that the recession is creating opportunities that would not ordinarily be available. While the recession has spelled shutters for an unusually high number of local retailers and restaurants, it has also opened the door to a number of new businesses.

The state of the economy "is allowing some smaller, local, independent businesses an opportunity to go into business now," said Alex Andrade, the city's business development specialist, citing a host of retail stores and restaurants that have moved to the city in recent months. Strong businesses like The Runners High have a chance to expand, and ones that are struggling may be able to renegotiate their leases -- though getting property owners on board can be a hard sell.

"Some are amenable," Mr. Andrade said. "Others aren't playing ball."


New businesses

Over the past few months, several new businesses have opened in downtown Menlo Park, and along the city's stretch of El Camino Real, including four women's clothing boutiques and five restaurants. Several others plan to open soon.

Menlo Park resident Farnad Fakoor said that lowered rents helped her make the plunge and open a boutique and clothes design studio, Farnad Couture, on University Drive, near Oak Grove Avenue. Ms. Fakoor designs and manufactures clothing, specializing in evening gowns; she had previously operated out of an atelier in San Francisco's Union Square, where she met clients one-on-one.

But with the dip in the economy, she saw an opportunity to expand to sell pre-designed couture that she can modify and tailor, as well as "made-to-measure" clothing.

"This is a big opportunity to get started. It can't get any better than this," she said, referring to the low rent.

A year ago, the rates for retail space on Santa Cruz Avenue ranged from $4 to $5 per square foot, according to Mr. Andrade. Today, it's more like $3 to $3.25, he said.

A block away from Ms. Fakoor's new operation, Felicia Jose recently opened her own women's clothing boutique, josef Boutique, at 883 Santa Cruz Ave. Ms. Jose, who left a career in the high-tech industry to "do something creative," said she found rent in downtown Menlo Park to be a "very good value," compared to her former San Mateo space.

"This has been a long-time dream, I've always been interested in fashion," said Ms. Jose, a Menlo School alum. "It's been a real joy" to run the business.

Another women's clothing boutique, Milana C., opened on Chestnut Street in June.

And Calla, a women's clothing boutique that closed temporarily after a major fire in March, plans to re-open on Chestnut Street in the fall under a new name: Alys Grace.


Adapting to economy

The recession may have opened the doors to new businesses. But once they're in they've got to figure out how to stay and compete with existing businesses that are also fighting to stay afloat.

"There's definitely a Darwinian aspect to today's economy," Mr. Andrade said. "The companies that have a strong foundation and the staff to keep them productive, the ones that are creative, are going to be the ones that can restructure successfully, and move forward."

Mark Adams, co-owner of the recently opened Marqs in Menlo restaurant, said that while he's trying to create a soothing, big-city vibe, he's also trying to make customers feel they're getting their money's worth.

"I'm not just a restaurant," he said. "What people need now is a little more bang for their buck." There's no cover charge to hear the musicians, and customers can simply have a drink at the bar or a few appetizers, instead of ordering a full entree.

"It's all about giving them their money's worth," he said, adding that he's been able to line up better musicians than he could have wrangled a year ago.

There has been much more turnover than usual among downtown businesses, Mr. Andrade says. He added that the city is working to fill vacancies, and that among other types of retail, he's heard interest from high-end nail salons, yogurt and cupcake shops, fitness centers, travel agencies, restaurants, furniture designers -- and, of course, women's clothing boutiques.

The city's new businesses "are all local, independent businesses that take pride at being in Menlo Park, and really care about the community," Mr. Andrade said. "We're pleased with the new opportunities that are being created."

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