Everything must go: But not without a City permit

"Going out of business! Everything must go! Clearance!" We've all seen the signs plastered on the windows of struggling stores, but one local businessman is learning that going out of business is tricky business, and if you do it wrong, you could wind up in jail.

Jeff Spinello, owner of the Main Street Gallery on the Downtown Mall, says that after 9/11, he watched his sales plummet.

"I held on as long as I could," he explains, but in a shrinking economy, he says, demand for prints by Thomas Kinkade, painter of light, dimmed.

Rather than go deeply into debt, Spinello made the difficult decision last month to fold his business. He began advertising his going-out-of-business sale and thought he could close that chapter.

Not so.

A letter with an official city letterhead arrived at Spinello's store last week, shaking the gallery owner to the core.

"We noted that you have advertised 'Going Out of Business' sign," the letter read, "and at this time, we are unable to locate a valid permit for this activity."

The letter instructed Spinello to obtain a $15 permit for the sale and to provide a list of his inventory. Failure to do so, he learned, is a Class 1 misdemeanor, punishable by up to $2,500 and a year in the pen.

"As if it's not bad enough to see your business tank," Spinello rages, "you get a letter like this."

Spinello is no stranger to business success. With his older brother Jim, he won Young Entrepreneur of the Year in 1997 from the San Francisco Business Times for their video games and vending business, JMS Video Games. At just 30 years old, Spinello says, he was ready to retire, and chose Charlottesville as the destination to spend his golden years.

Five-and-a-half years later, he says doing business in Charlottesville is not what he'd imagined. Here, he needs a license to fail.

But Lee Richards, the city's commissioner of the revenue, says the city has no choice in sending out such a letter.

"This is not a 'gotcha' situation," Richards says. "It's set up to protect the consumer," and is a state law that the city must enforce.

Richards says that several such letters are sent out each year, but the city has never had to levy a penalty to enforce the ordinance. And he understands why business owners may not be aware of the law: The Charlottesville business license says nothing about it.

"When someone starts out in business," Richards says, "the first thing that they don't want to have pointed out to them is that they may fail."

Mason Purcell, owner of The Purcell Company, a furniture, home d├ęcor, and oriental rug store on the Downtown Mall, got the same letter Spinello received last year when she was closing down her rug business.

"I didn't know," Purcell says of the ordinance. But once she received the letter about her closing Purcell Oriental Rug Company, she says the city treated her fairly.

"They couldn't have been nicer," she insists. "They didn't charge me with anything."

And though her new business may operate in the same spot and may look an awful lot like the old business, Purcell insists they are entirely different. "This is a retail store," she explains. "That was wholesale."

For the most part, others in the rug business decline comment on Purcell. But Saul Barodofsky, owner of Sun Bow Trading Company, offers, "I was absolutely amazed to hear that she's back. I wish her well."

Purcell says there was nothing deceptive about her sale, despite the fact that the wholesale business didn't actually close, but moved to Richmond and is now open only to rug dealers.

"I was extremely clear with customers about what I was doing," she says.

Spinello also resents the intimation that he would pull a fast one on his patrons, and he thinks the city has fallen short of fostering a healthy business environment.

"Maybe they should focus on helping businesses make it," Spinello says. "If we all fail, the city gets nothing."