Mobile retailers, the newest breed of 21st century startups, are challenging the City of San Antonio to accommodate and support their emerging business model.
The City is on board, but as is the case with most novel concepts, both business owners and City officials will have to overcome some hurdles along the way.
Three retailers hit a speed bump in mid-February, when field officers from the City’s Development Service Department, accompanied by one SAPD officer, issued “violations of ordinance” for failing to produce permits for their businesses.
However, designated permits for that type of business do not currently exist in San Antonio’s City Code.
Bexar Goods Co., Traveler Barbershop, and Grey Moon Vintage, the three businesses cited, all operate on the same plot of land at the intersection of Broadway and Appler streets, alongside Richter Goods, Mila Coffee, and Tapa Tapa.
Of the six businesses, textile and fashion retailer Richter Goods is the only brick-and-mortar operation; Mila Coffee and Tapa Tapa are mobile food and beverage trucks; Grey Moon is a vintage clothing store that, at the time of the citation, was housed in a shipping container; Bexar Goods is a purveyor of rugged leather and outdoor goods made in Texas but inspired by global travels; and Traveler Barbershop provides haircuts, shaves, waxes, and color services. The latter two businesses operate out of mobile Airstream trailers.
“Prior to us opening, we contacted the City to see what it was we needed to be compliant with City ordinances,” said Falcon Craft-Rubio, co-owner and co-founder of Bexar Goods. Queries about certificates of occupancy and retail permits all turned out the same answer: “They told us that none of these things applied to us,” he said.
The business collaborative, led by Richter Goods and property owner Mario Guajardo, represents a new way for startups to conduct commerce in San Antonio. Mobile business owners can test out their concept, build a following, and operate cost-effectively, but they also can pick up and move to another location at any given time.
As a consumer, you can drink coffee or grab a bite to eat, buy a locally made shirt, vintage dress, or leather wallet, get a haircut, and meet local entrepreneurs – all in one place.
“We got called out to the site [in February because] a complaint came in regarding new activity,” Michael Shannon, interim director of the City’s Development Services Department, told the Rivard Report. “It was really more of a question of what’s going on there, so when we went in with our staff we noticed there were some things that didn’t fit our code. So that really started the process. There are codes that apply, although it is a relatively new business model.”
Bexar Goods, Traveler, and Grey Moon were forced to cease operations for several hours. Craft-Rubio contacted Councilman Alan Warrick (D2), whose district is home to the business collaborative. Warrick spoke with leaders in Development Services and enabled the businesses to reopen later that day.
The container that Grey Moon Vintage operated out of was the biggest issue, Shannon said. The plot on which the mobile retailers operate is zoned as a general commercial district, or C-3, which explicitly prohibits outside storage. Although the pod served as a storefront rather than as storage, it had to go.
“The precedent has not been set with selling out of a shipping container,” said Grey Moon Vintage co-owner Colin Bass, who had been operating out of the pod since December 2016. “It was unfortunate in the moment, but we are approaching the summer heat and I need something with A/C anyway.”
Bass has since removed the container from the premises and is currently enjoying his honeymoon in Iceland. Upon his return, he, too, will operate out of an Airstream.
There was initial talk of peddler’s permits and flea market zoning, but neither applied to their business model, Craft-Rubio said. Shannon agreed and issued Guajardo a temporary use permit, which has to periodically be renewed, in late March. Rezoning the property to accommodate the businesses’ needs is another option, Shannon said, but determining whether that is needed or feasible will require more research.
Bexar Goods and Traveler Barbershop received clearance to operate as well as temporary certificates of occupancy, which are generally reserved for buildings. Code enforcement agents inspected both businesses for fire safety, electricity, plumbing, mechanical, structural, and other safety measures, and passed them after they made minor adjustments.
While these certificates allow them to operate legally, it also ties them to their address on the Richter Goods plot – which defeats the purpose of being a mobile operation.
“Our goal isn’t to shut anyone down,” Shannon said. “This seems like a pretty interesting business model, and we want to encourage small business growth in our city. But there are some rules and regulations for [the vendors’] safety and the community’s safety that we are working through to get them compliant and legal on a more permanent basis. I’m confident we will get there.”
The mobile business model as well as the collaborative cohort have proven successful, Guajardo said. Richter Goods has been open for more than two years, and last year Guajardo began renting out the parking lot space to mobile tenants. This has resulted in “rotating marketing” by a collaborative community of startups who cross-promote, create bridges among local consumers, collectively add a social element, and support one another.
A testament to their success and growing popularity, Richter Goods, Bexar Goods, and Mila were recently featured in publications such as Texas Monthly and San Antonio magazines and boast sizable social media followings.
“The amount of capital it takes to start a business is so high,” said Geekdom CEO Lorenzo Gomez, who was getting a haircut at Traveler Barbershop when I spoke to Holdridge. “[With a mobile business] you can test your product and idea without having to borrow half a million dollars.”
Rise Up Acai Café, one of Guajardo’s earlier tenants, was so successful that it transitioned from its mobile food truck to a permanent location in Alamo Heights in just eight months.
“This is the future right here,” Warrick said. “Because of the cost of brick-and-mortar stores, it doesn’t make sense for a lot of these companies. We need to give them the opportunity for cost-effective and novel solutions.”
Guajardo sees this way of doing business as organic and progressive, as it allows for constant re-imagination and evaluation.
“At the end of the day we are shaping something more unique. We need to take more of a risk and think bigger,” but businesses can only comply with ordinances if they are in place, he said. “We are in a time of transition … We are a technology city, and technology is screaming for new code on just about everything.”
“That’s definitely where we will be going,” Shannon said. “Finding a permanent solution under the guidelines we have or adding some new ones – if City Council wants to write some new ones, then we can work that way as well.”
The growing pains these mobile retailers experienced are similar to those the food truck and rideshare industries once grappled with, simply because they were new business models to which the City Code didn’t apply. Although the processes included legal action and lengthy negotiations in City Council chambers, both industries were eventually able to resolve some of their issues and become compliant with City Code.
“If this becomes more prevalent, and [if] one Council member or all of them ask us to do the research, [we would] come up with a proposed set of rules or a new section of our code,” Shannon said.
Craft-Rubio and Warrick suggested looking at what cities like Austin, where mobile retailers have already begun growing into the community’s commercial landscape, are doing to accommodate this new business approach.
“I think we can find a common sense solution that works for everybody,” Warrick said.
“We just want to be able to operate legally,” Craft-Rubio said. “Currently, we are, but there are still a lot of moving parts and gray areas. The permit we currently have does not apply to what we are, but it’s what we fit into” in the existing code.
The business cohort also has been good for the area, according to Guajardo. “This place was a crack house – literally,” he said of the state of his own store before he moved in.
With businesses such as J&G Liquor and Carmelita’s next door, the string of local businesses occupy city blocks that were previously vacant and now provide a bridge between the Mahncke Park area and the Pearl.
Foot traffic, arguably, is something certain areas of San Antonio – especially those perceived as dangerous – see relatively little of.
“I now see people walking to and from the Pearl all day long,” Guajardo said. “I think we need to be conscious and understanding of how this landscape is changing – it’s changing drastically, especially with Alamo Colleges coming in.”
The new Alamo Colleges headquarters is one of several developments in the area. In addition, the New Witte a few blocks north reopened in early March, two new Pearl office towers received HDRC approval in late December 2016, and renderings of a reimagined Broadway have sparked discussion about what the $43 million reserved for improvements on a three-mile stretch of the major corridor in the $850 municipal bond could bring.
But Guajardo’s vision is far from completed: he recently added one of local architect Peter French’s Rising Barn structures to the plot and plans to host local and national retail pop-ups in the future. This structure, too, will have to go through the process of coming into compliance with City Code, Shannon said.
The mobile retailers’ permits are temporary, but the City appears eager to work toward a permanent solution in order to foster small business growth and success. The benefits so far have outweighed the downfalls, and what has worked for the Richter Goods cohort could work in other areas of town as well.
“We are using spots that otherwise would be unused,” Craft-Rubio agreed. “This spot may not last forever, but the business concept could if the City supports it.”