Four years ago, Kaleidoscope Toys owner Steve Hutchison couldn't afford to buy the shop that houses his store around the corner from the Windsor Town Green.
That turned out to be a good thing. The 2008 price for the Windsor Road storefront was nearly double what Hutchison and his wife Miquelle paid for the property this summer.
"I'm just glad we didn't have the money at that time, because we would have bought it," Steve Hutchison said last week before pausing to wrap a gift for a young girl purchasing a birthday present for a friend.
When the sale is complete in about two weeks, Hutchison will see a sharp drop in the cost of operating his small store, stacked high with brightly colored games, gadgets and toys. The monthly expense to house the operation will be about a third smaller than the lease payment he now writes to the landlord.
The Hutchisons belong to a small group of Windsor business owners who this year bought downtown storefronts from five banks that took the properties back in bankruptcy or foreclosure proceedings.
This spring and summer, business owners in the Town Green Village have bought 17 shop spaces. Investors purchased an additional 23, according to two commercial agents who brokered the deals. At least two spaces remain for sale.
The sales prices typically were half the value of five years earlier.
Some business owners purchased their existing spaces. Others bought nearby storefronts. And some buyers from other parts of Windsor or Sonoma County are planning to move their businesses downtown.
Local leaders, commercial real estate agents and merchants say the sales will mean a healthier downtown.
"If there's any silver lining to the foreclosure crisis downtown, it's that people who couldn't afford to buy their storefronts originally can buy them now," said Windsor Mayor Debora Fudge.
As owners, the merchants have locked in a key cost of doing business, and they don't have to worry about a landlord ever asking them to leave.
"They're in control of their future now," Fudge said.
Town Green Village has been cited by the Sierra Club and others for transforming a long-blighted section of western Windsor.
Dedicated in 2001, the development's center is a grassy, oak-studded park that remains a popular venue for free concerts and other gatherings. The surrounding buildings feature Victorian- and European-themed designs that house shops and restaurants on the ground floor with townhomes overhead.
But during the Great Recession, the downtown suffered the double whammy of sluggish consumer spending and a real estate implosion.
Five years ago one owner put 24 commercial properties — nearly a third of the downtown — up for sale. And last year the downtown's chief developer, Orrin Thiessen, filed bankruptcy.
This winter Thiessen agreed to surrender the last of his local real estate holdings, which once totaled $22 million. The vast majority of the recent sales in Town Green Village involved his properties.
When real estate values began to plummet, many merchants remained reluctant to buy fearing prices would continue to drop.
Tom Khamvongsa, who owns Tomi Thai Restaurant with his wife Chotiya and two adult children, said Thiessen offered to sell him the 1,000-square-foot restaurant for $276,000 two and a half years ago. Khamvongsa, who declined the offer, was able to purchase the same space this spring for $165,000.
Owning the restaurant will save the family several hundred dollars a month over leasing, he said. But the bigger benefit is knowing a landlord can't ever tell him to move.
"I feel relieved," Khamvongsa said. "Now I can enjoy it with my kids."
Around the corner, Health First Pharmacy owners Mark and Terri Burger purchased two storefronts across the street from their Windsor Road business. They plan to eventually move into the new space. The mortgage payment for 2,350 square feet will be a third of what they now pay to lease 1,330 square feet, said Mark Burger.
Burger, Fudge and others said even those downtown merchants who lease space will benefit over time because commercial rents are likely to drop, a reflection of the decline in property values.
"I see this making a big difference in the success of businesses," Burger said.
Nearby on Johnson Street, network data provider Empire Communications was able to purchase not only its current space but an adjoining storefront for future expansion. The company plans in the near term to rent out that space.
General Manger Kenneth Cushnir said "there's some good deals to be had" now for businesses and investors who displayed "conservative values" when real estate prices were skyrocketing.
Rhonda Deringer, a senior real estate agent with Keegan & Coppin in Santa Rosa, said she and colleagues represented four banks who sold downtown properties: Rabobank, Westamerica, North Valley and Summit State.
The sales prices were well below replacement costs, she said.
"It's been a great opportunity for investors and local businesses," Deringer said.
The entire downtown will benefit from the merchants becoming owners of their storefronts, said Preston Smith, senior vice president with Cornish and Carey Commercial Newmark Knight Frank in Santa Rosa, who represented Wells Fargo Bank.
"There's nothing like ownership to have somebody invested in their community," he said.
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