What Happened At Reflections?

Reflections, at the corner of Wickenden and Governor for the last 8 or so years, has closed.  It initially appeared to be a temporary thing, but is now looking like it’s permanent.  A real loss for Fox Point.

Their website, which is insane, has a blurb up that gets at some of it.  But any extra details out there, hopefully salacious in nature?  And any news on a potential re-opening elsewhere?

9 thoughts on “What Happened At Reflections?”

  1. Unhelpful anecdote:
    Last week I met a high school friend’s new boyfriend in New York, as soon as I mentioned Providence he starts waxing nostalgic about his summer working at Reflections and painting houses. In my opinion, there can never be too many warm places to sit when you’ve got New England winters.

    mangeek thanks for the breakdown on mortgage/rent/taxes. Hopefully this next season at the General Assembly we can see something sensible come through with taxes and municipal aid so to stop the slow, painful death from the property tax front.

  2. Karen McAninch

    Also, if you click on “Home”, there is a little more detail.

  3. Karen McAninch

    It is weird, but if you scroll down on that explanation on the Reflections website, the rest of it is hidden but will show up.

  4. Digressingly, might I suggest not using “gulag” to describe the mildly uncomfortable seating arrangements of a popular coffee shop in a comfy bohemian neighborhood in a cozy, quirky city in a prosperous nation where there is scant real danger of being cast into years of semi-human misery in a real GULag. Just out of respect to those who were. Sorry to get all heavy ‘n’ stuff.

  5. Meh, never had any problem with them. Give me the comfy chairs of Reflections to the cramped, gulag like conditions of coffee exchange any day.

  6. Evan, while there is certainly no shortage of avaricious landlords, the situation isn’t as one-sided as you think, and the reasons are similar to the ones causing boarded-up foreclosure houses all over.

    Imagine that you bought that commercial building a while ago. You probably want (or need) some return-on-investment, people don’t become landlords out of the goodness of their hearts, they do it to make money.

    So you buy a $500K building back in 1995, and find that it’s worth $1M in 2007, and you only owe $200K on it… The stock market is doing well, and your wife wants to take a vacation, or the building needs a new roof, or the kids got into Brown, or whatever. You take out a second mortgage against the value of the building to pay for your investments, or Cancun, or the roof, etc.. Now you have two payments, one for the sale price of the building, and one against the accrued value. If you’re good at using a calculator, you balance the rent and the costs so you can still make money on your property, and life is good.

    Now, in 2009, the value of your building (and home, and that other building you rent) plummets 30-50%, and you’re upside-down. You owe $700K (and falling) on a building worth $600K, but the city has jacked the taxes so you’re paying the same taxes on your $600K building as you were when it was $1M. All of the sudden, your handy calculator work last year isn’t so pretty. You’re losing money on your ‘investment’ property.

    You can’t ask the city to politely lower your taxes.

    You can’t make your building worth $1M again.

    You don’t have cash available to pull-off some sort of crazy deal with the bank to put all your assets under one loan. Banks don’t want to talk to you, since now you’re losing money (who wants to make a loan to a sinking ship?).

    All you can do is raise the rent. Or raise it dramatically and ‘include’ utilities at a steep premium.

    And what we’re seeing in Rhode Island right now is that it’s almost the same to have an empty property as it is to rent at a loss. Renting is work, at least a few hours every week, it might not be worth the hassle if the difference is ‘losing $2K/month’ and ‘losing $3K/month’, especially if you can write-off the losses against your personal income to better save your own (likely upside-down) home. The ‘company’ takes a hit, but your personal income can actually be boosted, assuming the ‘company’ has some assets handy to feed the loss.

    This was going on -before- the crunch, just on account of Providence’s sky-high property tax rate, the meltdown in 2008 only exacerbated it. I’m no teabagger, but it’s clear that high property taxes are destroying our competitiveness, leading to closed shops, which leads to higher unemployment costs, which leads to cuts to state aid to towns, which leads to higher taxes.

  7. Except for the fact that the coffee was dreadful and the decor made me want to die and the service was always unfriendly and there are multiple other, better coffee places within a couple of blocks… Yeah, sad loss.

    Also, why does the explanation on their website end halfway through a sentence? Or is that just some weird glitch?

  8. That’s really sad. That place had the best wi-fi, atmosphere and tea selection.
    It also had small brother syndrome from coffee exchange, which is where everyone seemed to go.

  9. I heard it like dozens of businesses, their landlord got greedy and wanted to up their rent and have them pay more than their fair share on utilities.

    WTF is it with RI landlords where they are sooo stupid they RAISE rents when good tenants are hard to find?

    Is there some tax payoff that is making them screw over the RI economy ?

    I have heard this story with at least 25 businesses since the recession started.

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