In the mid-1990s, Terry Shulman’s was a successful drug store in the Gulf Gate Mall in Sarasota, Florida. Located in the back side of the mall, it couldn’t be seen from either of the two major arterial roads. However, it paid $3,500 for a freestanding pole sign. Its retail sales had increased 10-18% since it had relocated to the mall, and they peaked at $5 million.
The mall changed ownership. A new tenant, T.G.I.Friday’s, came, and its corporate policy demanded a pole sign. Without Shulman’s knowledge or consent, its freestanding was replaced with a T.G.I.Friday’s sign. Over the next four years, Shulman’s sales dropped by approximately $250,000 annually.
Analysts examined several possible factors. New competition, local economic indicators, physical indicators (ie, mall accessibility) and internal mall indicators were summarily dismissed as possible causes for the decline. Analysts then queried shoppers and discovered 90% of all mall visitors shopped at Shulman’s.
Shulman’s went out of business. Its 20,000-sq.-ft. space remained vacant.
Six months later, a research team revisited the mall. Food-court sales were down at least 30%. Six stores that offered female-oriented goods had closed. Here are some other results:
- A certified appraisal calculated the value of the sign at $250,000 annually.
- The mall’s annual income dropped by $1 million.
- Two dozen employees lost their jobs.
- Sarasota lost $18,000 in sales-tax revenue.
Elsewhere in Florida, in Lake City, during the approximately same time period, a Rodeway Inn had a pole sign visible from I-75. The motel had 86% occupancy, gross sales of more than $600,000, and a profit of $128,000. The state route on which it was located was widened, and the Florida DOT took away the sign. The FDOT appraiser valued the sign at $7,000, based solely on its structure. The next year, motel occupancy fell to 42%; gross income dropped to $350,000, and profit plummeted 69% to $40,000. FDOT was faced with paying more than $400,000 for the taking, or paying $90,000 for a replacement sign. It chose the latter.